Is clearing your electricity bills with a credit card, a smart move?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Managing finances effectively is critical for financial well-being, and using a credit card to pay your electricity bills is a wise approach in this direction. Integrating this handy payment solution into your financial strategy allows you to make timely bill payments, take advantage of reward programs, and improve your overall money management. Explore the key benefits of using a credit card to pay electricity bills..

Advantages of utilizing a credit card for electricity bill payments

1. Convenience

Using a credit card to pay your electricity bill unlocks comfort and convenience as you can do so in just a few clicks, without stepping out of your house. This saves considerable time as well as effort, allowing you to focus on more pressing tasks. Moreover, most credit card providers offer the service of mobile apps and online portals, which makes it simpler and easier to manage and trace your credit card payments.

2. Reward points

The main advantage of paying electricity bills with a credit card is that you earn reward points. Many credit cards offer reward points for every rupee you spend on utility bills, including electricity bills. These points can be used for a variety of rewards, including gift cards, cashback, booking flights, and more, ultimately saving you money. For instance, the IDFC FIRST Millennia Credit Card earns 1X reward points on utility bill payments, such as electricity bills. You can accumulate reward points on this credit card over time and redeem them on in-store or online purchases, for substantial savings.

3. Enhanced savings

In certain situations or for certain expenditure categories, credit cards may offer additional reward points or payback, resulting in higher savings. For example, some cards provide more rewards for online purchases or when total monthly spending surpasses a threshold. By smartly utilising your credit card, you can optimise your savings not only on electricity bills but also on other expenditures. This allows you to maximise the benefits of your credit card’s rewards program while also saving money.

4. Better cash flow management

When you pay your electricity bills with a credit card, you have the option of repaying your dues up to 48 days later without incurring interest charges. This allows you to manage your cash flow better as you get more time to make your payments. This flexibility is particularly advantageous for those with fluctuating earnings or unanticipated needs, as it can act as a cushion to help you manage your funds more effectively.

5. Additional incentives

Certain spending categories are eligible for additional benefits on credit cards, which increases their use. With the FIRST Millennia Credit Card, for instance, you can earn 3X reward points on online purchases up to ₹20,000 per month. In addition, you earn 10X reward points on incremental spends above ₹20,000. The premiums of your insurance policy may also earn you 1X reward points. In this way, you can maximize the use of your credit card and save money by selecting one that meets your needs and lifestyle.

6. Savings on bill payments

Using a credit card to pay your electricity bills is a wise move as it simplifies the payment process while also providing a variety of financial benefits. You can manage your electricity bill payments, save money, and earn rewards if you carefully pick and use a credit card that suits your spending habits.

Note: This is a partnered post.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow