Your options for paying a bill with your credit card depend on the type of bill, the payment choices you're given and even your credit card provider. In most cases, there will be a way to pay by credit card but there could be restrictions around earning points or using BPAY.
You might also pay extra for using your card thanks to fees and interest. Let's take a look at the key details you need to know before deciding whether to pay your bills on plastic.
BPAY payments with a credit card
BPAY gives you a way to make bill payments from your chosen bank account or credit card account (although credit cards aren't always accepted). It's a common payment option for many billers and is processed through the BPAY network.
How to make a BPAY payment with a credit card
The steps to make a BPAY payment can vary depending on your provider and whether you're on a mobile or Internet banking platform, but usually they follow this path:
- Log in to your credit card account.
- Choose the bill payment option, then select BPAY.
- Enter the biller code, reference number and account. You'll find these in the payment section of your bill.
- Follow the prompts to confirm the payment.
What are the key factors to consider when using a credit card to make BPAY payments?
- BPAY credit card restrictions. Not all credit cards give you a way to make BPAY payments. When that's the case, you won't see a BPAY option for your credit card account – even if it's there for any other accounts you have with the same bank. If you want to check, all your bank or credit card provider to see if it's possible to make a BPAY payment to another biller.
- BPAY credit card acceptance. Not all BPAY billers accept credit card payments. If that's the case, your BPAY credit card payment won't go through. But you can make a BPAY payment from regular transaction accounts and many savings accounts.
- Cash advance transactions. Many credit card providers put BPAY payments into the same category as cash advance transactions, which attract a cash advance free and cash advance interest charges.
- Reward points. Usually, you won't earn points for making BPAY payments with a credit card, especially if they are processed as cash advance transactions. You can check the reward program terms and conditions to see if BPAY payments are eligible to earn points, or contact your credit card company.
Ways to make a BPAY payment and earn points
If your credit card rewards program doesn't offer points per $1 for BPAY payments, you could still be able to earn points by making the payment through another platform. Here are some key options to consider:
Designed for small business owners, this service gives you a way to pay billers and earn points for using your credit card. You just need to enter the biller's details, and the payment will be made through an EFT (electronic funds transfer) or BPAY.
BPAY card processing fees cost 1.2% for standard Mastercard and Visa cards, 1.55% for premium or corporate Mastercard and Visa cards. Just keep in mind that you need an ABN to use B2BPay as it's meant for businesses.
If you have a Citi credit card, you can pay bills and earn points through Citi PayAll. This service offers one-off or recurring payments and can be used for most bills or even your rent. It earns 1 point per $1 for cards enrolled in the Citi Rewards program and 0.5 points per $1 for cards that earn Emirates Skywards Miles or Qantas Points.
There is a standard 0.95% fee for Citi PayAll payments.
This is free mobile app that gives you a way to make payments from any credit card or debit card to any BPAY biller. It has its own payment platform to process the payments and is an authorised BPAY Payer Institution Member (PIM), which means your payments are processed as purchases and you can earn points per $1 spent.
It charges a 1.5% fee for paying with an Australian credit card (Amex, Mastercard or Visa) and a 3% fee for international credit cards. (There's no fee if you use a debit card instead).
As well as these platforms, you may be able to pay some bills directly through BPAY if your biller is set up to accept credit card payments. Whether or not you'll earn points depends on the reward program terms and conditions, though.
Alternatively, you can see if there are other ways to pay the bill that could earn points, such as an only card payment portal or PayPal.
One-off bill payments with a credit card
As well as BPAY, there are other types of one-off payments that let you pay as you go. For example, you might choose to use your credit card to make a one-off payment on your tax bill through the Australian Taxation Office's payment portal. Or, visit an Australia Post Office to use the Bank@Post option for your bills.
These types of payment options are handy for bills that don't always cost the same amount or are less regular. Usually, you can make them in the same way you’d make a regular credit card payment:
|Choose "Card" as your payment option and enter your details.||Swipe, insert or tap your card and follow the prompts to complete the transaction.|
What are the key factors to consider when using one-off credit card payments to pay bills?
- Card acceptance. Not all billers accept credit card payments, and some may limit the type of cards that they accept.
- Credit card surcharges and fees. Some billers charge a small percentage fee of your bill for paying with credit card, so this is something you should pay attention to as well.
- Type of transaction. If your biller accepts credit card payments, the transaction will often be treated as any other purchase on your card. But if the bill payment is treated as a cash advance transaction, it will attract a cash advance fee and interest charges.
- Rewards. Not all bill payments earn rewards. For example, many credit card providers don't offer points for government charges, such as paying the Australian Taxation Office, or for payments through Australia Post's Bank@Post service. (We have a section in this guide that goes into more details about rewards).
How to pay rent with a credit card
Could you manage your finances without a credit card?
74% of Australians surveyed said they could manage their budget without a credit card, according to our consumer sentiment tracker (November data). A credit card can be useful for managing your spending and earning points if you pay it off each month but it's risky to rely on a credit card when you can't afford to pay back what you spend. Interest charges will add to what you need to pay off and some cards have interest rates around 27% for purchases.
Direct debit credit card payments for bills
Bills that are charged regularly can usually be set up as direct debits from your credit card account. This could include your mortgage repayments, insurance premiums, home utility services, gym membership, Internet and other subscriptions for entertainment services like Netflix or Foxtel. Very often, all you need to do is call your service provider.
How do you set up a direct debit with your credit card?
The specific details will vary depending on the financial institution, but the steps generally include:
- Ask the biller for a direct debit payment option.
- Provide your chosen credit card account details (i.e. credit card number, expiry date and three-digit card verification code).
- Confirm the details and authorise the direct debit agreement.
What are the key factors to consider when using a direct debit to pay bills?
- Direct debit fees. Some service providers may charge a fee for direct debits from a credit card. This could be 1-3% of the total transaction cost, although this charge is becoming less common. Most service providers prefer that you set up a direct debit payment with them, and as such have made this a fee-free mode of payment alternative to BPAY, cheques or mail orders, etc.
- Declined payment/dishonour fees. If a payment is declined due to your card being over its credit limit, for instance, you could be charged dishonour fees twice – once by the service provider and once by your credit card provider.
- Overdraft fees. In some cases, the card provider might choose to honour the direct debit even when your account is over its credit limit. They will then charge you an overdraft fee and default interest.
- Interest charges. As with any transaction, the direct debit will be subject to interest fees if you carry a balance or if there is no interest-free period on your card. This is something you should always be conscious of when managing your credit card repayments.
- Cancelled subscriptions. If you cancel a direct debit subscription, you'll have to make sure no more charges come off your card. If you wish to stop the direct debit payments, you'll have to contact both your bank and service provider to ensure there is no misunderstanding and you don't get charged any dishonour fees.
When will you earn points for paying your bills with a credit card?
Unless you're using a payment platform that is designed to let you earn points for bills – such as Citi PayAll or Sniip – it can be hard to tell if you will or won't earn points for a particular bill payment.
Often, it comes down to what your credit card company classifies as an "eligible purchase" – and BPAY payments, government transactions and utilities are often excluded from earning points.
But it does vary, so it's worth checking your reward terms and conditions or asking your provider before you pay your bills to earn points.
Table: When you won't earn points on a credit card
Here you'll find details of which transactions are not eligible for earning points and whether or not BPAY payments are excluded for reward programs from different credit card providers.
|Providers ||Exclusions for earning points|
Excludes any charges prior to your enrolment date in the program, cash advances, travellers cheques, charges for dishonoured payments, interest charges, fees and charges associated with your American Express credit card, late payment charges, "pay plus points" transactions, promotional offers and balance transfers.
Excludes cash advance and gambling transactions, interest charges, credit card and other banking fees and charges, fraudulent transactions, foreign exchange purchases and government charges.
Ineligible transactions for earning points includes balance transfers, cash advances, interest free transactions and HSBC's special promotions, business expenses, fees or charges (including government), any value charged to your card in association with a "points-plus-pay" redemption, a transaction which HSBC decides is fraudulent or involves the abuse of a card, a disputed debit transaction and BPAY transactions.
You won't earn points for GST and government charges (including ATO payments), BPAY payments, interest and other bank fees and charges, cash advance transactions, special promotions such as balance transfers, transactions made in operating a business or in connection with business expenditure, refunded transactions and payments for credit card protection insurance.
You cannot earn points on GST and government charges. Other exclusions are interest and other bank fees, cash advances, special promotions, business transactions, refunded transactions, gambling transactions and payments for credit card protection insurance.
Bill payments from your ANZ credit card can be processed as either a purchase or a cash advance, depending on how the biller is set up with the BPAY billing service. If the payment is treated as a cash advance, you will be charged a cash advance fee and won't earn points. Other reward exclusions are interest charges, government charges, bank fees, ATO payments and balance transfers.
Bank of Melbourne
Excludes cash advance transactions, government charges (other than GST payable in connection with the purchase of goods or services on which you earn points), interest and other bank fees and charges, cash advances, balance transfers and BPAY payments.
You will not be able to earn reward points if your bill issuer charges the payment as a cash advance and you don't use BPAY to pay the bill. Other exclusions are government charges (other than GST payable in connection with the purchase of goods or services on which you earn points), interest and other bank fees and charges and balance transfers.
You will not be able to earn points on bills if it is processed as a cash advance or if the payment is made via BPAY. Other exclusions are cash balance transfers, special promotions, bank fees, government charges, ATO payments, business transactions and insurance charges.
As long as the transaction isn't processed as a cash advance or via BPAY, you should earn points when using your CommBank card to pay bills. Other points exclusions are ATO payments (unless made using a Business Awards card), foreign exchange purchases, credit card insurance premiums, travellers cheques, interest charges, Qantas Frequent Flyer Direct fees, bank fees, card account payments and transactions deemed as business purposes (unless you're using a Business Awards or Business Platinum Awards card).
Transactions that are processed as cash advances or made through BPAY or over the counter at a bank are ineligible for earning points. Other exclusions are card fees and charges, gambling and gaming costs, government fees and charges, business expenses, ATO payments, fraudulent transactions, refunded transactions, balance transfers and travellers cheques.
Excludes government charges (other than GST payable in connection with the purchase of goods or services on which you earn points), interest and other bank fees and charges, cash advances, balance transfers and BPAY payments.
Excludes cash advances or payments made via BPAY, balance transfers, special promotions, fees, purchases of foreign currency and travellers cheques, foreign exchange and atm/bank charges, interest charges, finance charges, government charges, insurance charges, payments to loan accounts (mortgage etc), purchases in excess of limits on the account, transactions made in operating a business and all other transactions if the account is more than $10,000 in credit on all other transactions.
Excludes cash advances or payments made via BPAY, balance transfers, special promotions, fees, BPAY payments, purchases of foreign currency and travellers cheques, foreign exchange and ATM/bank charges, interest charges, finance charges, government charges, payments to the Australian Taxation Office, insurance charges, payments to loan accounts (mortgage etc), purchases in excess of limits on the account and business transactions.
If making bill payments are considered an eligible transaction, using a credit card to cover your bills can be a rewarding way to earn points on an essential expense.
As rewards and frequent flyer credit cards usually charge high interest rates, it's only worth it if you pay your balance in full each month and won't be charged any interest on these transactions. If you do rack up interest, the debt you'll collect will quickly outweigh any perks you get from earning points.
Compare frequent flyer credit cards
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