Prepay These Bills by Credit Card to Unlock Card Bonuses Faster!

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Ever considered prepaying bills to meet a card’s minimum spending requirement?

Prepaying certain accounts, like utilities, cable, and cell phone bills, can help you unlock card sign-up bonuses easier and faster.  But there are drawbacks too!

So I put together a list of the types of bills folks have had success prepaying.

Let’s take a look at the list and potential drawbacks of prepaying your bills!

Accounts You Can Prepay by Credit Card

Most folks have bills like utilities, cable, cell phones, and even student loans.  You can often prepay these accounts!

This can be a great way to meet minimum spending requirements to earn the sign-up bonus on a new credit card.  Or to meet a spending threshold to earn elite status with an airline, including Delta, or with a hotel chain.

Folks have reported being able to prepay bills like:

• Utility companies (electric, water, etc.)
• Health insurance premiums
• Car insurance
• Homeowners & renters insurance
• Home warranties
• Cable & internet
• Student loans
• Rent
• Cell phone bills (like Verizon, T-Mobile, and Sprint)
• Reloadable cards & accounts (like Starbucks and Amazon)
• Electronic toll accounts (like E-ZPass)
• Fantasy Sports Sites (like FanDuel and DraftKings)
• Crowdfunded & peer-to-peer loan organizations (like Kiva.org)

Million Mile Secrets team member Scott prepays his Geico bill to avoid the “monthly payment” fee and to take a chunk out of a minimum spending requirement.

Of course, depending on which utility company you use or where you buy your insurance, for example, they may or may not accept prepayments.  And some companies have maximum prepayment amounts.  

So if you have a bill of any kind you’d like to prepay, call to ask if it’s possible!  Because you never know. 😉

Drawbacks to Keep in Mind

If you decide to prepay your bills, be aware of the possible drawbacks!

1.   Have Enough Cash to Cover Your Bills

Be sure you have enough cash to pay off your credit card bill in full every month.  So you don’t accrue interest on your account that will negate the value of any miles, points, or cash back you earn.

For example, let’s say your yearly property tax bill is $4,000.  Normally it’s split into 2 payments, but you decide to pay the full bill with a credit card at the beginning of the year to help earn a card’s sign-up bonus.

You’ll need to be able to pay off that full amount, or else you’ll end up paying interest and fees on the $4,000 payment that will negate any rewards you earn.

2.   Fees for Using a Credit Card to Pay Bills

You should also consider any fees you might pay for using a credit card to pay a bill.

When paying taxes, it’s common to be charged ~1% to ~3% for paying with credit card.  So do the math to see what makes sense for your situation.  Because sometimes it’s worth paying a small fee to earn a big sign-up bonus!

You can also consider using a service like Plastiq, that allows you to pay bills that don’t accept credit cards for a flat 2.5% fee.

3.   Consider the Hassle If You Decide to Switch Companies

Don’t forget, if you decide to pay a bill in advance, it’s going to be a hassle to get that money back if you need to.

For example, say you prepay your car insurance bill for the entire year.  But mid-year, you find a better rate.  You can switch insurance companies.  But you’re going to have to deal with your original insurance provider to get that prepayment money back, which could be a pain!

4.   You’ll Lose Purchase Protection

If you decide to prepay a reloadable account (like Amazon) or buy gift cards for future purchases, you’ll miss out on any extended warranty and price protection perks you’d get from using a credit card.

If you plan on buying a high-priced item, it could be worth using a credit card that comes with some sort of purchase protection instead.  Like Citi cards, which offer purchase and price protection, and extended warranties.

Bonus.   A Note on Prepaying Loans

Folks have reported being able to prepay loans like mortgages and student loans.  But be careful, because loan servicers won’t always apply extra payments to the principal (original) loan amount.  So it’s worth talking calling your service to be sure your extra payment is applied correctly!

And check out this Google spreadsheet where Reddit commenters have entered companies that they’ve had success in prepaying.

Bottom Line

Prepaying bills can be a great way to meet minimum spending requirements to earn the sign-up bonus on a new credit card.  Or to unlock card bonuses, like elite status with an airline or hotel chain.

You can often prepay bills like insurance premiums, student loans, cell phone, and cable & internet bills, and more!

But be aware of the potential drawbacks of prepaying bills will a credit card.  Because, for example, you don’t want to end up paying fees and interest that will negate the rewards you earn.

Do you have any bills you prepay?