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Earning Avios for paying your council tax and other utilities

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Your council tax bill for 2015/6 will have dropped through your letterbox in the last few days. Earning Avios or other points by paying your day-to-day bills is something that a lot of people ignore.

Unfortunately, because of the huge range of utility companies, it is difficult to write a detailed post on paying utility bills by credit card. I have been doing this for years, though, when I can. There are a couple of things always worth remembering:

Some utility companies keep quiet about their willingness to take credit cards. For example, I don’t have a current bill to hand to double-check, but Thames Water bills used to not mention their willingness to take credit cards. They presumably wanted to avoid paying the processing cost if they could. Yet, head over to the Thames Water website and you’ll see that Visa and MasterCard credit cards are accepted – with NO surcharge.

Some companies do add a surcharge for paying with a credit card. You need to do the maths to see if it is worthwhile. Our phone and broadband contract is with Sky, for example, and is about £30 per month. Sky charges a 50p surcharge for credit card billing. This is worth it for me, because I have an old-style bmi MasterCard which gives 2.5 Avios per £1. If you take an expensive Sky TV package, even a less lucrative Visa or MasterCard may be worth using.

3V Virtual Visa cards are still accepted by some utility companies – and you can buy these with an Amex in Tesco.  3V cards are Visa-branded pre-paid cards which are sold at face value in Tesco and elsewhere.  They are currently tricky to find because they are being rebranded at pay.com.  Not all utility companies take them – Vodafone and Sky are OK  I believe, as are some energy groups.  Buy £50-worth as a test – that will trigger 150 bonus Clubcard points for spending £50 on gift cards – and see if they go through.  If not, you can use them for Amazon gift cards and / or use them for your usual online shopping.

Most interesting, though, is this one: It seems, very occasionally, that some companies who do NOT take credit cards do let the odd one slip through! My local authority is Kensington & Chelsea. They are adamant that only debit cards are accepted for online payment – the website says:

“we accept British-issued debit cards for MasterCard and Visa and Switch, Solo, Visa Electron, Delta and Maestro Debit cards”

However, for the last four years, I have successfully used my bmi MasterCard or my Marriott MasterCard to pay my bill! This is very attractive for me as there is no surcharge at all.

It doesn’t work with all cards. I once tried using a Tesco MasterCard and the system recognised, correctly, that it was a credit card and not a debit card. I have no idea why some cards work – presumably there is a database somewhere that tells the payment system which cards are credit cards, and some must have been missed off!

It is all very odd, when you think about it.  Because of the cut taken by the card processor, my council presumably receives less money than it is expecting.  I am credited with having paid the full amount, however, and the council clearly never bothers to try to reconcile the difference.

If you have any interesting stories about settling utility bills on points-earning plastic, please post them below.

Comments (111)

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  • Rich Spencer says:

    I was going that the 100 or so posts would help me pay my council tax by Amex through paypoint. Turns out I was very wrong….
    Looks like some people have too much time on their hands…..

    • Rich Spencer says:

      *Hoping

    • Polly says:

      Rich, what is that about. Of course you can pay your cc bill via pp you just need to find a co op locally, most accept amex, but you need your original bill that can be scanned into its system! Good luck, I just did mine

  • Kip says:

    I just paid my annual council tax bill on my MBNA bmi card before the earning rate reduction on Wednesday.
    No surcharges for credit cards in Cheshire East, just the billed amount. They’re obviously being charged a fee by the payment providers but you have to assume they work that into the overall costings of payment processing and debt collection.
    I can’t work out whether I should I be feeling guilty because the council doesn’t want to take a payment charge…

  • Will B says:

    what happened here?! This isn’t flyertalk you know!

  • Romano says:

    Thought provoking article!

    Has anyone tried setting up a continuous payment authority on their credit cards? I have a couple of rental properties where I pay all the bills. I have this set up on a direct debit basis for cashflow purposes. If I could do the same thing with a credit card (technically a continuous payment authority rather than a direct debit) then it would be a no-brainer to earn the points for all the spend which goes out regardless.

    • Polly says:

      Hi Romano, I have had continuos payment authority with sky, BT, council tax, several of my bills actually, until I started prepaying with 3v! When will we ever see these pay.com cards then? Now I prepay directly with amex all my bills who take amex, the others with my tesco MasterCard, or sometimes buy those £50 visa with fee, when we get till spits, to pre pay with. So either way getting avios for all bills, even our service charge goes on it. We needed a new boiler and hot water cistern recently, and I paid the supplier by phone directly, instead of a bank transfer to our plumber, which would have earned nothing….takes the pain out of the bills a bit too!

      • Romano says:

        Interesting to hear that Polly – might take a leaf out of your book, suddenly all these property bills look a little more interesting (and less painful):-)

  • Sam says:

    Some fascinating responses here. A couple of points from personal experience!

    a) It’s really easy as a merchant to not accept certain cards (such as credit cards)
    b) Credit card surcharges reflect the risk that merchant account providers – i’m guessing that K&C have a low risk of defaulting! You’d be surprised how low merchant account credit card rates can go. In a minimal risk environment the merchant account providers would rather offer a lower rate to ensure as many people as possible pay by this method (we are all second guessing what they do pay, but i’ve negotiated cc rates for years!)
    c) As irresponsible as it sounds, councils would rather people can pay council tax by credit so shifting the cost of chasing defaults onto others

  • Moog says:

    1. Taxpayers have a legal (and moral) liability to pay the substantive council tax bill. There is no such case for credit card surcharges.

    2. Paying cash would probably cost the council more than paying by credit card. Cash offices are notoriously expensive for councils to run.

  • louie-m says:

    Just thought I would mention that my local council (Tunbridge Wells) will not take the (fee paid) Visa debit cards you can get in Tescos (bought when I had money-off vouchers and using the pre-Christmas bonus coupons) online, but will take them if you pay using the automated telephone bill payment facility.

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