Credit card payment is accepted for utility bills like phone, internet, city services, etc. How do credit card companies earn from this kind of transaction? Does it matter if you pay your bills using credit card?
They generally charge the merchant 1-3% of the transaction amount. The merchants are willing to pay this in order to retain customers who wish to pay this way and it's usually cheaper than processing checks and dealing with bounced checks, etc.
The will also pass on the transaction fees to their customers. Usually from $5.00 to $10.00. Some will only charge you the fee if you pay it over the phone. I've had some companies tell me that I wouldn't be charged a fee if I go online and pay or if I go thru their automated system.
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