Paying utility bills is a necessary part of adult life. While seemingly mundane, these recurring expenses present a valuable opportunity to earn rewards and optimize your spending. Choosing the right credit card for utility payments can translate into significant savings and benefits over time, making it worthwhile to explore the best options available. This guide will help you navigate the landscape and select a card that maximizes your rewards.
Credit Card Comparison Table for Utility Payments
| Credit Card | Rewards Structure | Key Benefits & Considerations |
|---|---|---|
| Chase Freedom Unlimited® | 1.5% cash back on all purchases, including utility bills. | Pros: Simple, flat-rate rewards. Good for those who don't want to track bonus categories. Intro APR offer available. Cons: No bonus categories specifically for utilities. |
| Discover it® Cash Back | 5% cash back on rotating quarterly categories (activation required), which sometimes include utilities. 1% on everything else. | Pros: High potential rewards if utilities fall into a quarterly category. Cons: Requires activation each quarter. Unpredictable category rotation. 1% base reward is lower than some other cards. |
| Citi Double Cash® Card | 2% cash back on all purchases: 1% when you buy and 1% when you pay. | Pros: Simple, flat-rate rewards. High cash back percentage for a flat-rate card. Cons: No bonus categories specifically for utilities. Requires paying your balance on time to earn the full 2%. |
| Blue Cash Preferred® Card from American Express | 6% cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%), 6% on select U.S. streaming subscriptions, 3% at U.S. gas stations and at transit, 1% on other purchases. | Pros: Excellent for those who spend heavily on groceries, streaming, gas, and transit. Cons: No bonus category for utilities. Annual fee. Benefits primarily geared towards specific spending habits. |
| U.S. Bank Cash+® Visa Signature® Card | 5% cash back on two categories of your choice each quarter (up to $2,000 in combined purchases each quarter), 2% on one everyday category, and 1% on all other eligible purchases. | Pros: Ability to choose your 5% categories, potentially including utilities. Cons: Requires category selection each quarter. Spending cap on 5% categories. Can be complex to manage. |
| Wells Fargo Active Cash® Card | 2% cash back on purchases, including utility bills. | Pros: Simple, flat-rate rewards. Straightforward earning structure. Intro APR offer available. Cons: No bonus categories specifically for utilities. |
| Amazon Prime Rewards Visa Signature Card | 5% back at Amazon.com and Whole Foods Market with an eligible Prime membership; 2% back at restaurants and gas stations; and 1% back on all other purchases. | Pros: High rewards on Amazon and Whole Foods. Cons: Requires an Amazon Prime membership. No bonus category for utilities. |
| Capital One Quicksilver Cash Rewards Credit Card | 1.5% cash back on every purchase, every day | Pros: Simple, flat-rate rewards. Good for those who want a straightforward rewards program. Cons: No bonus categories specifically for utilities. |
| Chase Sapphire Preferred® Card | 5x points on travel purchased through Chase Ultimate Rewards, 3x on dining and online grocery purchases (excluding Target, Walmart and wholesale clubs), 3x on select streaming services, 2x on all other travel purchases, 1x on all other purchases. | Pros: High rewards on travel and dining. Points can be redeemed for travel or cash back. Cons: No bonus category for utilities. Annual Fee. Requires careful redemption strategy to maximize value. |
| Chase Ink Business Cash® Credit Card | 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable and phone services each account anniversary year; 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year; 1% cash back on all other purchases. | Pros: 5% back on internet, cable and phone services (often bundled utilities). Cons: Requires a business. Spending cap applies. Annual Fee. |
Detailed Explanations
Chase Freedom Unlimited®: This card offers a simple and straightforward reward structure, providing a flat 1.5% cash back on all purchases, including utility bills. This makes it a good option for those who prefer not to track rotating categories or complex bonus structures. The intro APR offer can also be beneficial for managing large expenses.
Discover it® Cash Back: This card features rotating quarterly categories that earn 5% cash back (on up to a certain limit, usually $1,500), requiring activation each quarter. While utilities might occasionally be included in these categories, it's not guaranteed, and the base reward rate of 1% on other purchases is lower than some alternatives.
Citi Double Cash® Card: This card stands out with its 2% cash back on all purchases – 1% when you buy and another 1% when you pay your bill. This simple structure, coupled with a high cash back percentage, makes it a compelling choice for utility payments. However, you need to pay your bill on time to receive the full 2%.
Blue Cash Preferred® Card from American Express: While not directly rewarding utility payments, this card offers 6% cash back at U.S. supermarkets (on up to $6,000 per year), 6% on select U.S. streaming subscriptions, 3% at U.S. gas stations and at transit. If you have significant spending in these categories, the overall rewards can offset the lack of a utility-specific bonus. It comes with an annual fee.
U.S. Bank Cash+® Visa Signature® Card: This card allows you to choose two 5% cash back categories each quarter (up to $2,000 in combined purchases). If utilities are offered as a category, you can maximize your rewards on those bills. The 2% category and 1% base rate offer a little something extra for other purchases. Requires category selection each quarter.
Wells Fargo Active Cash® Card: Similar to the Citi Double Cash®, this card offers a flat 2% cash back on all purchases, including utility bills. Its straightforward earning structure and potential intro APR offer make it an attractive option for those seeking simplicity.
Amazon Prime Rewards Visa Signature Card: This card is best for those who are frequent Amazon and Whole Foods shoppers. The 5% back on those purchases is substantial. However, it doesn't offer any bonus categories for utility payments directly. Requires an Amazon Prime membership to take advantage of the 5% rewards.
Capital One Quicksilver Cash Rewards Credit Card: This card provides a straightforward 1.5% cash back on every purchase, making it a solid choice for those who prefer simplicity and a flat reward rate.
Chase Sapphire Preferred® Card: This card focuses on travel and dining rewards. While it doesn't offer bonus categories for utilities, the points earned can be redeemed for travel or cash back, and the travel benefits can be valuable. However, it comes with an annual fee and requires a strategic redemption plan to maximize value.
Chase Ink Business Cash® Credit Card: This card, designed for businesses, offers 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable, and phone services each account anniversary year. The inclusion of internet, cable, and phone services makes it a strong contender for utility payments, especially if you bundle these services. However, it requires having a business to qualify.
Frequently Asked Questions
Can I really earn rewards by paying my utility bills with a credit card? Yes, many credit cards offer rewards on all purchases, including utility bills. Some even offer bonus rewards for specific categories that might include utilities.
Are there any fees associated with paying utilities with a credit card? Some utility companies may charge a fee for credit card payments. Check with your utility provider to confirm their payment policies.
What if my utility company doesn't accept credit cards? Consider using a payment service like Plastiq, which allows you to pay bills with a credit card even if the recipient doesn't accept them directly (fees may apply).
Is it safe to pay my utility bills online with a credit card? Yes, as long as you're using a secure website or payment portal provided by your utility company or credit card issuer.
Will paying my utility bills with a credit card help build my credit score? Yes, as long as you make your credit card payments on time and keep your credit utilization low.
Which card is best if I want a simple, no-fuss option? The Chase Freedom Unlimited®, Citi Double Cash® Card, or Wells Fargo Active Cash® Card are good choices for their flat-rate cash back rewards.
What if I already have a credit card? Evaluate your existing card's rewards structure and compare it to the options listed above to see if switching or adding a new card would be more beneficial.
How do I choose the best card for my utility payments? Consider your spending habits, reward preferences, and whether you're willing to track rotating categories or pay an annual fee.
Should I consider the APR when choosing a credit card for utility payments? While rewards are important, the APR is crucial if you plan to carry a balance. Aim to pay your balance in full each month to avoid interest charges.
What if I have bad credit? Consider secured credit cards or cards designed for building credit, though they may not offer the best rewards.
Conclusion
Choosing the best credit card for utility payments depends on your individual spending habits and reward preferences. By carefully considering the reward structures, fees, and benefits of different cards, you can optimize your spending and earn valuable rewards on your recurring utility bills. Consider your personal financial situation and spending habits to make an informed decision.