Ask an Expert: Do Any Cards Offer Bonus Cash Back on Utilities?

Photo (cc) by d00d

This post comes from Jason Bushey, who writes about credit cards daily on Creditnet.com.

I recently received this question from a Money Talks News reader:

I like to put my monthly utility bills on my credit cards. Do any credit cards offer bonus cash back for utility expenses? — Juan R.

My response

First, let me say that Juan is a smart guy for putting his monthly utility bills on his credit card. I always recommend using credit cards for monthly purchases you plan on making anyway, rather than expenses that would otherwise be considered outside of your monthly budget if it weren’t for your credit card.

No purchases are considered more “monthly” than your utility bills. Gas, electric and water are the monthly necessities that (usually) offer automatic bill pay so that you never forget to pay, and the bill often comes on the same day of every month.

Paying those bills with your credit card thus offers an opportunity to build a good credit history. As FICO explains on its website, 35 percent of your credit score is based on your payment history. Setting up automatic bill pay with your card ensures that you’re using your card and gives you the opportunity to make an on-time credit card payment each month. Another plus: You’re consolidating the number of bills you need to remember to pay off each month.

Even better than organizing and consolidating your monthly bills is earning cash back on those utility expenses. Many cards offer 1 percent cash back on all purchases, which is nice enough but won’t amount to much cash back solely earned by utility expenses. Other rewards cards, however, offer 2 percent or more depending on the utility bill.

For instance, the Barclaycard Rewards MasterCard offers two points per dollar spent on utilities, gas and groceries. This offer is available for both the excellent-credit and average-credit card offers.

Depending on whether you consider your phone a utility purchase (you would be hard-pressed to say it’s not a necessity at the very least), the SimplyCash Business Credit Card from American Express offers a full 5 percent cash back on wireless telephone services purchased directly from a U.S. service provider, up to $12,000 per year.

One catch

Before consumers set up autopay with one of their cash-back or bonus cash-back cards, it’s important to find out whether the service provider in question charges a convenience fee for credit card payments.

Obviously, a convenience fee of 1 percent or more will negate the cash back earned using a credit card. You might consider this a worthwhile trade-off because using your card for utility purchases will help you build a good credit score if you pay your credit card bill on time every month. But if it costs more to use your credit card for utility purchases even after the rewards, it’s probably not worth it.

In conclusion

There aren’t very many cash-back cards that provide extra rewards when you use it for utility payments, which is too bad because utility bills must be paid each and every month. That said, using any rewards card to pay your monthly bills can help you in more ways than one, provided there are no convenience fees.

Even setting up autopay on utility bills with a 1 percent cash-back card can help you accrue a little bit of cash back, build credit and perhaps even better organize your monthly spending.

Note: While we attempt to be completely objective when reporting on credit cards, this site may be compensated by issuers when a reader applies for a credit card through the links within credit card stories or on our credit card search page. Also note that any terms, rates or other features described in this article can change without notice. Always double-check everything with the issuer before applying for any credit card.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
2-Minute Money Strategy: How Should I Invest My Retirement Savings?

If retirement is on the horizon, you can’t afford to take too much risk, but you also need to make as much as possible. Here are your options.

4 Ways the Social Security System Will Change in 2020

These adjustments will impact both workers and retirees in the new year.

15 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

9 Purchases That Will Make You More Productive

These Amazon products can give you an extra edge at work and other parts of your life.

3 Big Medicare Costs Just Got Bigger

Some Medicare premiums and deductibles for 2020 will take a bigger bite out of Social Security payments.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
11 Things Retirees Should Always Buy at Costco

This leader in bulk shopping is a great place to find discounts in the fixed-income years.

Over 50? The CDC Says You Need These 4 Vaccines

Fall is the time to schedule vaccines that can keep you healthy — and even save your life.

9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

11 Senior Discounts for Anyone Age 55 or Older

There is no need to wait until you’re 65 to take advantage of so-called “senior” discounts.

8 Things You Can Get for Free at Pharmacies

In this age of higher-priced drugs and complex health care systems, a trip to the pharmacy can spark worry. Freebies sure do help.

These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

The 10 Most Commonly Stolen Vehicles in America

A new model parks atop the list of vehicles that thieves love to pilfer.

7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

11 Household Items That Go Bad — or Become Dangerous

When you get the impulse to stockpile these everyday items, pay close attention to their expiration dates.

19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

10 Reasons Why You Should Actually Retire at 62

If you can, here are several good reasons to retire earlier than we’re told to.

3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

14 Things That Are ‘Free’ With Medicare

These services could save you money and help prevent costly health problems.

5 Keys to Making Your Car Last for 200,000 Miles

Pushing your car to 200,000 miles — and beyond — can save you piles of cash. Here’s how to get there.

26 States That Do Not Tax Social Security Income

These states won’t tax any of your Social Security income — and in some cases, other types of retirement income.

5 Things That Make Life More Meaningful for Retirees

Retirees agree: These are the things that give them purpose and fulfillment in their golden years.

10 Things You Should Never Do With Bleach

Does the pandemic have you reaching for bleach more than ever before? Learn the ins and outs of using this powerful disinfectant.

11 Things You Should Never Buy Without a Coupon

With just a little planning, you can save money on numerous everyday purchases.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.