Utility bills can take up a large chunk of your monthly expenses, yet they are often overlooked when it comes to earning rewards on credit cards. Many cards either offer low or no returns on these payments, but there are a few exceptions that provide great value on bills like electricity, gas, and phone recharges. Choosing the right credit card for utility bill payments can lead to savings and other financial benefits. Let’s dive into how such cards can work in your favor.
Earn Rewards and Save on Utility Payments
One of the biggest perks of using a credit card for utility bill payments is the ability to earn cashback or rewards. Compared to other payment methods, you could save significantly by paying your bills through a credit card that offers such benefits.
Certain cards are co-branded with payment platforms like Google Pay or Airtel, while others offer general cashback or rewards on any utility payments. The key here is to align your card choice with your payment preferences. For example, if you frequently use the Airtel Thanks app, the Airtel Axis card offers up to 10% cashback on utility bill payments through the app. However, it doesn’t provide the same benefits if you pay through other platforms. So, choosing the right card can help you maximize your savings.
If you’re considering applying for a credit card to save on utility payments, here are some top options:
| Credit Card | Annual Fee | Key Features |
|---|---|---|
| Amazon Pay ICICI Credit Card | ₹0 | 2% cashback on mobile, broadband & DTH recharges and utility payments on Amazon |
| Airtel Axis Bank Credit Card | ₹500 | 10% cashback on utility bill payments via Airtel Thanks app |
| Axis Ace Credit Card | ₹499 | 5% cashback on bills and recharges via Google Pay |
| Standard Chartered Super Value Titanium Card | ₹750 | 5% cashback on telephone and utility bill payments |
| HDFC Regalia Gold Credit Card | ₹2,500 | 4 reward points per ₹150 spent on utilities, insurance, etc. |
Never Miss a Payment Again
Utility bills are a regular part of your financial routine, so automating these payments can help you stay on track and avoid late fees. Many credit cards allow you to set up automatic payments, ensuring that your bills are paid on time every month.
This not only helps in avoiding penalties but also keeps your card active, which can positively impact your credit score over time. Maintaining a good payment history and keeping your card in use are important factors that contribute to a strong credit score.
Save Beyond Utility Payments
Using a credit card for utilities can offer additional benefits beyond just bill payments. For example, the Axis Ace card gives 5% cashback on bill payments via Google Pay, but it also offers 1.5% cashback on all other online and offline purchases. Some cards even offer extra perks like complimentary lounge access, fuel surcharge waivers, and discounts with partner brands. These rewards can add up, helping you save even more across other spending categories.
A Safety Net for Financial Emergencies
Credit cards can also be a lifeline in case of unexpected expenses. Whether it’s medical bills or urgent repairs, having a credit card gives you the flexibility to cover these costs. Plus, for larger expenses, many credit cards allow you to convert purchases into EMIs, which can ease the immediate financial pressure.
What to Consider When Choosing a Credit Card for Utility Bill Payments
- Read the Fine Print: Be sure to go through the terms and conditions of your credit card. Check for any monthly caps on rewards, minimum or maximum transaction limits, or restrictions on the frequency of bill payments.
- Watch Out for Fees: Some credit cards may charge transaction fees for utility bill payments. If that’s the case, weigh whether the cashback or rewards you earn offset these fees.
- Responsible Usage is Key: While credit cards can offer great rewards, they are only beneficial when used responsibly. Always aim to pay off your balance in full by the due date to avoid interest charges or late fees.
Final Thoughts
Deciding whether to use a credit card for utility bill payments depends on your personal preferences and financial situation. If you own a card that offers substantial rewards on these payments, it can be a smart way to save. However, if the rewards are limited or if there are high fees involved, you might be better off using another payment method. Weigh the pros and cons to determine the best option for you, and if you find the right card, you could turn your monthly utility bills into a source of savings.
