Should you pay for your insurance with a credit card? [Boss Insurance]

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When shopping for insurance, you’ve probably wondered if you could pay your premium with a credit card. The answer depends on the type of insurance you purchase. Although you can pay for car insurance policies with your credit card, for example, your life insurance company might refuse. And even if you can use your credit card, you need to consider whether it makes financial sense to do so.

Here’s what you need to know about buying and paying insurance premiums with a credit card.

Using a credit card is a common way of paying day-to-day expenses for many Americans. Not only can it help you earn rewards, like cash back or travel rewards, but credit cards also come with protections that debit cards don’t, making a card payment credit preferable to using a debit card in many scenarios.

Some of CNBC Select’s top picks for credit cards in 2023 include the Chase Sapphire Preferred® Card for its generous welcome bonus and strong travel rewards for travel and dining purchases. For those looking for cash back, the Citi® Double Cash Card offers 2% cash back on all eligible purchases, giving you 1% when you make a purchase and an additional 1% when you pay your bill. credit card.

Chase Sapphire Preferred® Card

  • Awards

    $50 annual Ultimate Rewards hotel credit, 5X points on travel purchased through Chase Ultimate Rewards®, 3X points on dining, 3X points on select streaming services and online grocery purchases (excluding Target , Walmart and wholesale clubs), 2X points on all other travel purchases , and 1X points on all other purchases

  • welcome bonus

    Earn 80,000 bonus points after spending $4,000 on purchases within the first 3 months of account opening. It’s $1,000 when you redeem through Chase Ultimate Rewards®.

  • Annual subscription

  • Introduction AVR

  • Regular APR

    20.74% – 27.74% variable on purchases and balance transfers

  • Balance Transfer Fee

    Either $5 or 5% of the amount of each transfer, whichever is greater

  • Foreign transaction fees

  • Credit needed

However, you will want to ensure that your credit card is paid in full and on time – carrying a balance on your card may negate any benefits you may receive, as interest charges on credit cards may be expensive. If putting your insurance premium on your credit card requires you to carry a balance, it might be worth considering other options, such as a transfer directly from your bank account.

Many major insurers allow you to use a card for your car insurance premiums. Progressive, Geico, and State Farm allow all credit card payments and were also among our top picks for auto insurance this year, due to their savings options, availability, and coverage.

Progressive car insurance

  • Cost

    The best way to estimate your costs is to request a quote

  • App available

  • Policy Highlights

    Progressive offers a number of insurance lines to enable bundling and handy tools to help you keep your coverage within your budget.

See our methodology, conditions apply.

Geico Auto Insurance

  • Cost

    The best way to estimate your costs is to request a quote

  • App available

  • Policy Highlights

    Geico coverage and services are available in all 50 states and the District of Columbia and there are 16 different types of discounts available. In addition to the standard coverage options, Geico offers various optional add-ons, such as emergency roadside assistance, rental car reimbursement, and mechanical breakdown insurance.

See our methodology, conditions apply.

However, some auto insurers may charge a fee for using a credit card. It is worth making sure that there are no charges imposed by a credit card payment, as this could actually increase the amount you will pay for insurance coverage and could negate any benefits or advantage.

You probably can’t pay for life insurance with a credit card. You may be able to use a card for the initial payment of your premium, but afterward you will usually need to set up an electronic funds transfer (EFT) or write personal checks from your checking account.

With home insurance, the ability to use a credit card largely depends on your insurer and the status of your mortgage.

If you don’t have a mortgage and your home is paid off, it’s up to you and your insurer how you pay for your home insurance. As with car insurance, it may be worth checking that there are no fees required for using the credit card.

But if you have both a mortgage and an escrow account, you might be out of luck when trying to pay your premiums with a card. This is because the purpose of an escrow account is to pay important expenses (such as your property taxes and insurance premiums) from a bank account over time, which prevents the use of credit cards. credit.

Whether or not your mortgage lender requires you to have an escrow account depends on the type of mortgage you have, the amount of equity in your home, and the state you live in. For example, FHA loans and USDA loans require escrow accounts, so you won’t be able to pay on your own with a credit card with these loan types.

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Paying for your auto insurance with a credit card can be a good idea. However, not all types of insurance can be paid for with a card. Check with your insurer to make sure there are no charges and make sure you’ll be able to pay your balance in full to get the most benefits you could get from using your card .

Check out CNBC Select’s in-depth coverage at credit card, banking And moneyand follow us on ICT Tac, Facebook, instagram And Twitter to stay up to date.

Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff alone and have not been reviewed, endorsed or otherwise endorsed by any third party.