Paying the Bills: Why Some Utilities Don’t Accept Credit Cards

Nicolas Cesare  | 

In the past we’ve talked about paying your bills with a credit card. This can be a good way to build your credit over time while taking care of regular expenses. Some of you may have followed our advice and tried to practice this yourselves, paying some of your utilities with a credit card, only to find that your utility company won’t accept credit cards.

Credit cards are everywhere these days. Every major store, restaurant, and even farmer’s market is likely to accept your credit cards, so it’s jarring when you encounter a service that won’t. So why don’t utility companies accept your credit card, and what you can do about it? We’ll answer that in this article.

Why You Should Pay Most Bills With a Credit Card

Before we talk about utilities companies themselves, let’s recap on why paying your routine expenses with a credit card is a good idea in the first place.

Your credit score is like a snapshot of your ability to pay back debt. Lenders will look at your credit score before giving you a loan in order to decide how much interest to charge you or if it’s even safe to give you a loan. For these reasons, you want your credit score to be as good as it can get. This will make it easier for you to get personal loans or buy a house later on down the road.

However, many younger people don’t have the credit history necessary to really boost their credit score. This makes them a bit of a wildcard for lenders, who like to err on the side of caution. The good news is that you don’t need to buy a house or a boat to build some credit history; you can build credit history with something as simple as a credit card. By using your credit card regularly and paying your bill on time month over month, you can easily start to develop a strong credit history and boost your score.

This is where recurring expenses come in. It’s not always easy to use your credit card regularly, but by putting some of your monthly spending on a credit card you can make sure that it’s getting used. Groceries, utilities, and other cyclical bills represent a modest amount of money that you should definitely be able to pay at the end of the month, and they occur every month without fail. By paying bills with a credit card, you are telling lenders that you know how to handle debt responsibly.

Why Utilities Won’t Accept Credit Cards

Paying bills with your credit card can be great for you and your credit score, but utilities companies don’t always see it the same way. If you’ve tried this yourself, you may have found that not every utilities company will accept your credit card. Let’s talk about why that is.

The reason why retailers accept credit cards no matter what they’re selling or where they are is simple: accepting credit cards is a great way to turn more people into potential customers. By making it incredibly convenient to pay for their goods, retailers are enticing more browsers to become paying customers.

Competition also drives credit card acceptance. If one coffee shop in your area starts to accept credit cards, then others must follow their lead or be left behind — more customers will choose the coffee shop where it’s more convenient to pay.

Utilities companies, on the other hand, don’t have to compete for your business in the same way. Many utilities operate under a government-sanctioned monopoly. This means that the government has created a market in which that company is the only company selling their particular service, whether it be electricity, water, or trash collection. There are political and practical reasons to do this, but it means that utilities companies don’t have to work as hard to win you over as a customer.

Credit card companies will always ask for fees from retailers. It’s part of how they make their money. Utilities companies don’t need to take on these extra fees to earn your business, so oftentimes they simple don’t and choose not to accept your credit cards.

Alternatives to Paying Utilities Bills With a Credit Card

If your utilities company won’t accept your credit card, not all is lost. You can use your credit card to pay for regular expenses like groceries or gas and then pay off your credit card bill at the end of the month to build your credit. Just remember to watch your spending and keep a budget so that you don’t end up with a credit card bill too large for you to pay.

Meanwhile, most utilities will still accept convenient forms of payment like direct debit or electronic checks. Better yet, the growth of Big Data analytics in the credit reporting and scoring industry means that just by paying your bills on time every month, you may still be able to help boost your credit score regardless of what payment method you use. All it takes is your utility company opting to report payment and billing information to one of the three major credit bureaus.

Using your credit card to pay bills is a safe and reliable way to build credit. However, utilities companies aren’t always willing to accept your credit card. Oftentimes they do not have to fight hard to earn your business, making them less eager to pay credit card fees. See what options are available in your area, and do what you can to make sure your routine spending benefits your credit history as well as covering your essentials.


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Nick Cesare is a writer from Boise, ID. In his free time he enjoys rock climbing and making avocado toast.

This post was updated August 21, 2017. It was originally published August 23, 2017.