Paying insurance premiums with a credit card can be a smart way to earn rewards, take advantage of bonus points, or simplify bill payments. However, not all credit cards or insurance companies allow this payment method, and the benefits can vary based on the card you use. In this guide, we’ll look at the best credit cards for paying insurance premiums and what factors to consider when choosing the right one.
1. Cashback Credit Cards
Best for: Earning money back on every payment.
Overview:
Cashback credit cards are an excellent choice for paying insurance premiums because they allow you to earn a percentage of your payment back. Many cashback cards offer between 1% to 3% cashback on purchases, including bill payments like insurance premiums. This can result in a small but steady return on money you’re already spending.
Recommended Cards:
- Citi® Double Cash Card: Earn 2% cashback—1% when you make a purchase and another 1% when you pay it off.
- Chase Freedom Unlimited®: Offers 1.5% cashback on all purchases, making it a simple choice for recurring bills like insurance.
Pros:
- Cashback rewards directly lower the effective cost of your insurance premiums.
- No need to track rotating categories—these cards offer flat cashback rates on all purchases.
Cons:
- Some cashback credit cards have limits on how much cashback you can earn annually.
2. Travel Rewards Credit Cards
Best for: Maximizing points for travel or other perks.
Overview:
If you prefer earning points for travel, hotel stays, or other rewards, a travel credit card may be the best choice for your insurance premium payments. While insurance payments may not qualify for bonus categories, you can still earn base rewards on every payment, which can add up over time.
Recommended Cards:
- Chase Sapphire Preferred® Card: While primarily a travel card, it allows you to earn 1x points on all purchases, including insurance premiums.
- American Express® Gold Card: Earns 1 point per dollar on general spending, which includes insurance premiums, plus elevated points on dining and groceries.
Pros:
- Great for travelers who want to accumulate points for flights, hotels, or other travel-related purchases.
- Points earned from premium payments can be redeemed for travel or transferred to loyalty programs.
Cons:
- Annual fees on some travel rewards cards can be high, which may offset the benefit if you aren’t a frequent traveler.
3. Low-Interest or 0% APR Credit Cards
Best for: Managing large premium payments over time.
Overview:
If you have a significant insurance bill or prefer to spread out your payments, a 0% APR or low-interest credit card may be the best option. These cards allow you to avoid paying interest for an introductory period, typically 12 to 18 months, giving you time to pay off the balance without incurring additional charges.
Recommended Cards:
- Citi Simplicity® Card: Offers 0% APR for up to 21 months on purchases, allowing you to pay premiums without interest.
- Chase Freedom Flex℠: Includes an introductory 0% APR period for 15 months on purchases.
Pros:
- Ideal for paying off large premium amounts without interest.
- Helps with managing cash flow or emergencies when a lump sum payment may be challenging.
Cons:
- Rewards are limited or nonexistent on many 0% APR cards.
- After the introductory period, interest rates can be high, so it’s important to pay off the balance before the 0% APR ends.
4. Business Credit Cards
Best for: Business owners paying for commercial insurance.
Overview:
If you’re a business owner paying for insurance premiums related to your business (such as liability or property insurance), a business credit card can be an excellent tool. Many business credit cards offer cashback, points, or rewards that are tailored to business expenses, making them an ideal choice for paying insurance premiums.
Recommended Cards:
- Ink Business Preferred® Credit Card: Earn 3x points on the first $150,000 spent in select business categories, including insurance premiums.
- American Express® Blue Business Cash Card: Earn 2% cashback on all eligible business purchases, including insurance.
Pros:
- Business-focused rewards and higher earning potential on business-related spending.
- Helps separate personal and business expenses for easier financial management.
Cons:
- Some business credit cards have strict approval requirements, making them harder to qualify for.
Factors to Consider When Paying Insurance Premiums with a Credit Card
When choosing the right credit card for your insurance premiums, there are a few things to keep in mind:
- Insurance Company Policies: Not all insurers accept credit card payments. Check with your insurance provider to see if they allow it and if there are any associated fees.
- Fees: Some insurance companies may charge a convenience fee for paying with a credit card, which could negate any rewards or cashback you earn.
- Rewards vs. Interest: If you plan to carry a balance, a 0% APR or low-interest credit card may be more beneficial than a rewards card, as the interest savings can outweigh the rewards.
Conclusion: Which Credit Card Should You Use?
Choosing the best credit card for insurance premiums depends on your financial goals. If you’re looking for rewards, cashback credit cards like the Citi Double Cash or travel rewards cards like Chase Sapphire Preferred can help you earn back on your premium payments. For those wanting to manage cash flow, a low-interest or 0% APR card is a solid choice, allowing you to spread payments over time without incurring interest. Business owners should consider business credit cards for commercial insurance payments to take advantage of business-focused rewards.
By selecting the right credit card, you can turn your insurance premiums into opportunities for earning rewards, saving money, or managing your budget more effectively.