My power company, Dominion Power, offers me to pay my monthly power bill online using a credit card. They add on a $1.65 fee for the service, and appear to accept payments of up to $1,000.
It appears the system is designed that you cannot overpay your bill, even though it accepts payments of up to $1,000. In other words, if you’re monthly power bill due is $100, you won’t be able to pay more than that (thus, this is not a good manufactured spending technique, and even if it was, I don’t know how you’d get the extra overpayment money back).
Is $1.65 worth it?
In some cases yes, in some cases no. It’s worth it when you…
- Have to meet a minimum spending requirement on a credit card and can’t otherwise meet it without this service.
- Have a power bill of over $250, since adding on a $1.65 fee will be less than what you’d pay for a Visa/Mastercard gift card of a similar price. If you have a power bill of $1,000, for example, using this feature would be really worth it, since you’re generating 1,000 points at only $1.65. I’d hope none of you have this high of a bill, though… 🙂
When is it not worth it?
- If you’re bill is less than $250 a month. In this case, you’d be spending more on earning the points off your electric bill than you could be buying a gift card of a similar price, and then cashing out that gift card using either Serve or Bluebird.
Do you pay your monthly power bill using a credit card, and if so, what’s the fee?
Jamie Larounis is an avid traveler, blogger and miles/points educator. Traveling well over 100,000 miles a year and staying in hotels for over 100 nights, he leverages miles, points and other deals to fly in first class cabins, and stay in 5-star hotels. The Forward Cabin shares his experiences, musings, reviews, tips, tricks, resources and industry news with you, the fellow traveler.
Interesting how you came up with $250…that would mean you can buy $500 VGCs for ~$3.30? If so please share!
I disagree with your math as well. If you use the fidelity Amex, 2% of $100 = $2.00, which is more than the fee. The convenience of credit card would like be worth it and the break even point is $82.50 on the fidelity Amex.
I’m allowed to overpay. I pay 6 months at a time for $3.50
My city owned utility sticks me with a $2.95 fee but 2 of my 3 bills are business and are over $250, one well over that mark. I have no issues paying the fees for the businesses and learned a little trick to minimize the fee. I simply pay a day or so after it’s due and that seems to be the day the new bill posts. It’s a 2 for 1 with one fee so I’m saving $2.95. Discovered by accident when I paid a day late due to being out of town. Was worried about late fees so I called and asked if I was in trouble for paying a day late. Got a chuckle from them and learned it does not get a late fee until the second month (yet to understand city owned utilities but hey…).
LADWP (Los Angeles) takes free credit card payments for residential accounts. (No credit card payments taken for commercial accounts though).
SCE&G takes credit card payments without a fee for residential accounts. I have it set up to auto pay each month.
My water company allows credit card payments with no fee, too, but they aren’t able to handle recurring credit card payments yet. They say that’s coming. Can’t wait.
I do it when chasing a sign up bonus. I am working on 5k spend for 75k MRs, works out to 15 points per dollar spent. My power bill was $299 and a $3 fee on top for the CC payment. Gladly went with it for what I consider to be 4530 MR points for the transaction. That’s a lot of value!