Considering placing all bills and utilities on a credit card. Currently, they're all tied to our bank accounts so they don't incur fees.
Whenever we fly, we're always buying tickets for two people, and Southwest flights usually cost us around $200-$350 per person roundtrip, though we do try to book with points wherever we can. Which leads me to…
Placing all of our bills onto a Southwest CC would result in another $916.80 in processing fees per year, $76.40/month. But, it would net us over 50,000 rapid rewards points per year (4,300/month) in doing so. We fly probably 3x/year for fun/weddings/family, so this would effectively cover our airfare for those trips if we booked far enough in advance.
Placing all of our bills onto an Apple Card would result in another $916.80 in processing fees per year, $76.40/month. But, it would net us $516 in cash back per year, at least $43 in cash back/month.
Does anyone have experience with this? Not looking to get another CC so these are the two options we have. We lean towards the SW card because that at least seems more worth it as opposed to spending $76 to only get $43 back… thoughts? I greatly appreciate the replies in advance.
Should I Place All Bills on a Credit Card – but which one should I choose?
byu/davis9510 inCreditCards
Posted by davis9510
13 Comments
Well obviously you wouldn’t do the Apple Card – paying $900 to make $500, not exactly the greatest deal.
How much do you normally pay for the Southwest flights the rewards would cover? Is it more than $900?
According to Nerdwallet SW points are worth about 1.3 cents. So in this case you’d be paying over $900 to get $650 in points. You’d have to run the actual numbers to see how much in dollars 50,000 points will save you, but it’s rarely worth chasing miles/points/cashback if you have to pay a credit card processing fee.
The Apple math is even worse.
In both cases you’d be better off putting the money you’d pay in processing fees into any kind of savings (, or even just stuffing it into your mattress) and using those savings to buy the airline tickets.
I’d just pay with the bank.
Apple card doesn’t make sense obviously.
Southwest card really doesn’t make the best sense. At a max you’d need to earn at least 62k to break even at 1.5cpp, at 1cpp it’s 92k.
I would never put any charges on a card that would net me a processing fee unless I needed to hit a sign-up bonus.
How are you defining ‘net’ cash back or SW points? Generally, that should mean your benefit after subtracting processing fees, but that doesn’t seem to be the case here.
Given the stated fees involved (unless you’ve calculated your net return weirdly), neither card sounds like a good option. Either you are throwing away money in the case of the Apple Card, or you are effectively purchasing Southwest points at 1.78 cents/point, which is about the absolute peak of what they could be worth as redeemed.
Yep. I put all bills on a charge card. Earns points and keeps my utilization low.
None of my bills except mortgage incur a processing fee, so maybe switch to a Bilt card for that specific bill if it would benefit you.
I don’t use my credit cards for anything with a processing fee unless working on a SUB. With exception of my phone bill, but I don’t pay for cellphone insurance because the card covers it so I come out ahead for it.
That’s a lot of processing fees.
I only do bills and utilities that don’t add a credit card fee.
You would effectively be buying SW points at 1.8 cpp. That’s not a good deal unless you are continually getting 2 cpp on redemptions from SW, but they typically have their points price track the cash price.
Would you pay $916.80 to buy 50,000 Southwest points? Personally I wouldn’t, but your valuation of Southwest points may differ.
Us bank has a card that give points for utilities. Also the wyndham card does. But wyndham hotels are mid tier at best. Also chase ink cash gives points for phone and cable bills
Would recommend a Max Cash Preferred card to get 5% back on utilities.
Additionally, to avoid fees and still use credit cards you can try paypal bill pay, but they have removed a few utility companies over the years. If you really want to, some utilities, like my gas company, don’t charge a cc fee if I pay at a kiosk. Just plan sometime to visit that part of town and do that along with errands.