Smart cards

Credit cards are not necessarily handy only in an emergency, or when you need to make a big-ticket purchase. They also easily double-up as your bill-pay agent via your laptop. All credit cards offer a bill-pay facility if you sign up with them. The service is free. Banks have been offering the bill-pay facility for some time now, and many individuals have opted for this convenience. Says Parag Rao, Executive Vice President, HDFC Bank: “We have observed that many people are opting for the bill-pay service through credit cards as it is convenient and enables them to avoid the hassles of standing in queue.”

How to use your credit card Four tips to ease your bill payment hassles. You can earn reward points for your card-spend on utility bills Banks reward you with additional reward points for signing up for bill pay Also, get a free-credit period till your credit card bill is due Remember, pay your dues in full, or you will get charged interest

It’s easy to sign up for the facility. Banks have tied up with utility companies such as telecom service providers, electricity suppliers, gas suppliers and even insurance companies in many cities across the country. Under this facility, your credit card will get debited with your billing amount and the utility company will get its dues on time. Says Rao: “Practically all utility companies have signed up for this service.

The advantage for them is that they get their dues upfront.” To sign up, an individual just has to provide the unique customer number on the utility bill to the bank, and the service will be activated in about two months.

Advantage credit card

If you have big utility bills payments to make, there’s relief and enough comfort in this method. Individuals can benefit from the free credit period available on every credit card, which usually ranges from 40 to 55 days, depending on the type of credit card and the issuing bank. In effect, the free credit period means that you can utilise other people’s money free of cost. A huge utility bill outstanding can also be converted into monthly instalments and can be paid over a few months to a year. However, note here that credit card companies will charge you interest from your billing due date on the outstanding amount.

Among the more attractive features of opting for bill-pay through your credit card are the reward points you can accumulate and exchange against your billings. The billings work much in the same way as any normal purchase—reward points tot up as you spend on your card. The reward points are credited as per the bank’s policy. These days, some banks have sweetened the signing up process by offering bonus reward points if you pay three consecutive bills. And, as usual, you can exchange the reward points for gifts and accessories.

The only hitch, if there’s one, is that individuals will have to clear any discrepancy in billing with the utility company. After it has been corrected by the utility company, the amount of discrepancy will be adjusted in subsequent bills. But before that, individuals will have to pay the disputed bill amount in full. Individuals must also look for any hidden charges for using the bill-pay facility, as banks have different rules governing their credit card services. Here’s another note of caution: if you have outstanding dues on your credit card, it’s best not to sign up for this service, as you will be charged interest once the bill is debited to your card. Besides, don’t roll over your outstanding amount. And make sure you pay all your bills in full once you sign up for bill pay.

The interest charges will unnecessarily add to your utility costs. For all your initial hassles, the service does go a long way in making your bill payments a breeze.