How to Turn Winter Bills Into Rewards

It’s the dead of winter, a time when the temperatures drop and Canadian households crank up the furnace to stay warm. Unfortunately, keeping a cozy house can put a squeeze on your wallet in the form of higher utility bills.

On average, Canadians pay $135 per month to heat their homes, with folks who use natural gas paying about $50 more per month, on average, than those who use electricity, according to a 2024 analysis by EnergyNow Media. Your bills may be even higher depending on the specific energy rates in your region.

If you’re disciplined and strategic, using a credit card to pay these recurring bills might be a wise move — and you’ll reap some rewards in the process. But only if you have the right type of card, your utility provider charges minimal fees, and you can pay your balance in full each month. Otherwise, interest charges and other fees could turn a simple utility bill into long-term credit card debt.

Choose your cards carefully

A cash-back credit card is the gift that keeps giving — the more you spend, the more you earn. Opting for a card that offers a solid rate of return on everything you buy — at least 1% is generally good — can help you earn a few dollars back on those bigger bills.

Even better are cards that offer a higher cash-back rate specifically for recurring bill payments. Here are a few examples:

Scotia Momentum Visa Infinite Card: 4% cash back on recurring bill payments.
TD Cash Back Visa Infinite Card: 3% cash back on recurring bill payments.
BMO CashBack World Elite Mastercard: 2% cash back on recurring bill payments.
CIBC Dividend Visa Infinite Card: 2% cash back on recurring bill payments.

Cash-back rates are subject to change at any time. Check the issuer’s site for up-to-date information.

What does this look like in practice? If your monthly utility bill is $150 and you pay it with the Scotia Momentum Visa Infinite (4% cash back), you’d get $6 back per month — that’s $72 a year.

Alternatively, if you have a travel credit card, you could earn points or miles for every dollar spent on non-travel purchases which, in some cases, includes recurring bill payments.

Take the National Bank World Elite Mastercard as an example. Not only can you currently get 2x points per dollar on recurring bill payments, you’ll also earn 2x points per dollar spent on eligible gas and grocery purchases.

Watch out for processing fees

Not all utility companies accept credit card payments. Many of those that do outsource credit card payment processing to a third-party service. This means there’s usually a transaction fee of about 1%-2% of the monthly payment amount, says Randolph Taylor, a credit counselor with Credit Canada.

Unless your cash-back rewards exceed this processing fee, the math probably won’t work in your favor, Taylor points out. In fact, you could end up paying more in fees than you earn in rewards.

“Look at the numbers to ensure that, if you put utilities onto a credit card, it makes sense and that you’re being mindful and careful, and that you’re not getting in over your head,” Taylor says.

Whatever card you choose, make sure you will use it enough to make it worth your while and offset any annual fees or other charges.

Other perks of paying your utility bills with plastic

Aside from obvious perks like cash-back rewards and travel points, paying your monthly heating bill with a card can have other advantages.

Timely payments. Setting up credit card autopayments ensures you pay on time — without having to write a cheque or make a phone call. This can help you avoid late payment fees and disconnection if you forget to pay a bill.
Better budgeting. Using a specific card for recurring bills can make it easier to track expenses and streamline your budgeting.

But just because you can pay your utility bill with plastic doesn’t mean it’s always the best idea — especially without discipline.

If you don’t pay your bills on time, you’ll get hit with late payment charges. If you’re charging utility bills and other big purchases on your card and you can’t pay the balance in full each month, you’ll wind up with double-digit interest charges, usually north of 20%.

In that case, any potential rewards are quickly wiped out, and you’d be better off paying your utility company directly, Taylor points out.

“Credit cards are a slippery slope,” says Taylor. “If you’re putting more money on [the card] than you expect and you’re not keeping track, you can get in trouble really fast.”

What to do if you’re struggling to heat your home

If heating costs are stressing you out, there may be help available, either through your provincial government or local utility provider.

For instance, Ontario residents who are behind on utility bills can get support through the Low-Income Energy Assistance Program (LEAP). LEAP provides up to $650 for natural gas bills and up to $780 for homes heated electrically.

Additionally, Ontario’s Energy Support Program (OESP) provides monthly credits directly on eligible electricity bills, while Alberta’s Utilities Consumer Advocate helps residents find cheaper rates and access emergency assistance.