Should You Pay Bills With A Credit Card? A Guide For SMBs

Key takeaways

• Pay almost any vendor by card, even those that only accept checks or bank transfers, using a platform like Melio.
• Boost cash flow by holding onto funds for up to 55 days while your vendor still gets paid on time.
• Earn card rewards on the regular business bills you already pay each month.
• Check processing fees and pay your balance in full to keep the benefits ahead of the costs.

How to pay vendors with a credit card

You can pay a vendor with a credit card in a few simple steps:

1. Confirm the vendor accepts card payments.
2. Pay through a secure payment portal, POS system, or virtual terminal.
3. For vendors that do not accept cards directly, route the payment through a third-party platform like Melio or Plastiq.

Six reasons to pay business bills with a credit card

Now that we’ve solved the most important obstacle of using a credit card for your business bills, let’s explore more reasons why credit card payments could be a great option for you:

Which business bills can you pay with a credit card?

You can pay most business bills with a credit card. Common examples include supplies and equipment, utilities, software subscriptions, professional services, maintenance, and insurance. Some payees add a small processing fee, and a few, like certain loans, may not accept cards at all.

• Equipment and supplies
• Travel and gas
• Utilities such as electricity, water, internet, and phone
• Professional services like accounting and legal fees
• Maintenance and repairs
• Insurance premiums

When a vendor does not take cards directly, a platform like Melio lets you pay by card while your vendor still gets paid the way they prefer.

Credit card fees and costs to consider

Before you pay a bill by card, check the cost so the trade-off works in your favor.

• Processing fees: some payees pass on a card fee, so compare it against the rewards you would earn.
• Interest: carrying a balance can quickly erase any rewards, so aim to pay in full each month.
• Credit utilization: large balances can raise your utilization and affect your credit score.

With Melio, your vendor gets paid in their preferred way, so the main cost to weigh is the card fee.

Tips for effective credit card use in business

Is it better to pay bills with a credit card or bank account? It depends.

Can you pay an invoice with a credit card? Absolutely yes. Not sure how business credit cards work? In short, they let you separate personal and business expenses, track spending, and access higher credit limits—often with rewards tailored for businesses.

Using a credit card for vendor payments is often preferable, because:

• Credit cards are highly secure and your liability for unauthorized charges is limited.
• Credit cards offer various rewards and perks.
• Credit cards reduce the need to manually write checks or handle cash.
• Credit card payments help you build a solid credit rating.
• Credit card payments are cost-effective, as long as the full balance is paid on time and you avoid being charged interest.
• Paying by credit card enables you to delay payment, freeing up available funds and boosting immediate cash flow.

But before switching to card, check the fees involved. Many payees, such as utility companies or subscription providers, prefer credit card payments and won’t increase the charge to cover fees. Other payees may charge extra, or might pass on B2B credit card processing fees, so it is wise to take note so the terms are in your favor. When using Melio, payees receive payment in their preferred form anyway, so the only fee that the transfer incurs is the card fee.

Here are some more business credit card tips for getting the most out of your card usage:

Take advantage of introductory offers: Many card issuers offer incentives to sign up for a credit card, such as sign-up bonuses or 0% APR for a limited time. Leverage these offers to your advantage, but use them wisely. For example, if a sign-up bonus comes with a minimum payment condition, use the card for large purchases to ensure you meet the requirements. You could also use a new credit card to consolidate higher-interest debt at a lower rate, however, be sure to pay off the balances before the higher rates kick in.

Explore rewards and benefits: Choose a credit card that offers rewards, such as cashback, points or miles, or discounts on business-related purchases. Most card companies have business credit cards with perks specifically for businesses, such as extended payment terms, higher credit limits, or travel insurance. These can provide additional and often substantial value for various business needs. Make sure you do thorough research and consider talking to your bank, credit card company, or financial advisor to find the best card for you.

Pay balances in full: Whenever possible, avoid having a credit card balance to prevent interest fees from increasing. The amounts can add up substantially over time. Also, protect your credit rating by paying off your balance in full each month and avoiding late payments. The goal is to keep your credit use to a minimum, so you can avoid debt and reduce the impact on your credit scores.

Automate and schedule payments: With Melio, you can set up automatic payments or schedule reminders so you never miss a due date for invoices. At the same time, track credit card payments closely, especially recurring payments for monthly bills. This way, you can be sure that you have enough funds available to cover expenses and avoid accumulating credit card debt and expensive interest charges. Additionally, you can explore the option of whether or not you can pay taxes with a credit card.

Pay any vendor by credit card with Melio

We’ve got good news for you: there’s no reason for businesses not to take advantage of the benefits of credit cards. Even if you have suppliers who only accept checks or bank transfers, you can start paying most of your business bills with a credit card anyway. How? All you have to do is sign up for an online accounts payable (AP) tool like Melio.

When you set up a payment with Melio, simply choose how you want to pay, as well as how your vendor wants to get paid. If they prefer a check, Melio will mail them one on your behalf, regardless of what payment method you choose. This means that you pay by credit card, and the vendor receives a check payment. It’s that easy!

Some AP platforms, like Melio, even offer options like a single use virtual card (SUVC), which adds an extra layer of security for vendor payments.

Melio: a solution for both parties

The Melio magic? You can pay with a credit card even when the vendor prefers to get paid another way, including checks (unlike some competitors such as Quickbooks Bill Pay).

Melio is a simple tool, made for small to medium businesses, to handle all aspects of vendor payments digitally.

Melio is built to streamline B2B payments, so you can pay any vendor—whether they prefer checks, ACH, or other methods—without changing your process. You don’t want to go through the trouble of persuading vendors to opt for a credit card payment, especially if they’re not interested in paying credit card fees. They can have it their way, and you can have it your way.

Ready to simplify how you pay? Sign up for Melio and start paying your business bills by card today.

Paying bills with a credit card FAQs