How to pay an invoice by credit card
Wednesday, 11 January 2023, 2 minute read
Whether you’re running a smaller or larger business, paying your invoices on time is key to maintaining good relationships with vendors and suppliers, and staying on top of your company’s finances.
There are several ways to go about paying an invoice in the UK - including bank transfers, cash payments, checks, and credit cards. While each of these methods has advantages and disadvantages, paying an invoice with a credit card - much like paying an invoice with a debit card - is one of the most popular ways to pay both international and domestic suppliers thanks to its security and convenience. During the current recession, when your cash flow might be a little slower, paying by credit card can also be a great way to ease any financial pressure on your business.
In today’s article, we'll walk you through how to pay an invoice by credit card and break down the pros and cons of credit card payments, along with tips for receiving and making your payments as fast and secure as possible.
The benefits of paying an invoice with a credit card
There are several advantages to paying invoices with a credit card:
Rewards: Many credit cards offer rewards programs, where you can earn points, miles, or cash back on your purchases. Paying invoices with a credit card can help you earn these rewards, which can be redeemed for travel, gift cards, or statement credits.
Convenience: Credit cards are accepted by a wide range of merchants, making it easy to pay invoices from any vendor. You don't have to worry about having cash on hand or writing a check, and you can make payments from anywhere with an internet connection.
Payment flexibility: With a credit card, you have the option to pay your invoice in full or make partial payments over time. This can be helpful if you don't have the funds available to pay the invoice in full right away. Just be aware that you'll accrue interest on any unpaid balances, so it's best to pay off your credit card as soon as possible to avoid high finance charges.
Fraud protection: Credit cards offer added security against fraud, as you're not directly providing your bank account or credit card information to the vendor. If your credit card is compromised, you can dispute the charges with your credit card issuer and potentially get your money back.
The risks of paying invoices with a credit card
While there are many benefits to paying invoices with a credit card, there are also some potential drawbacks to consider:
Interest charges: If you carry a balance on your credit card, you'll accrue interest on your unpaid balances. This can be especially costly if you're paying a large invoice over time.
Impact on your credit score: Using a large portion of your credit limit can negatively impact your credit score, as it may indicate to lenders that you're relying heavily on credit. This is known as high credit utilisation, and it can lower your credit score.
Credit card fees: Some credit cards charge fees for balance transfers, cash advances, or foreign transactions. If you're paying an invoice with a credit card, be sure to check for any potential fees that may apply.
Crezco can help
Crezco can be your go-to solution to pay your domestic and international suppliers instantly in one click or schedule them for later. Payments are made directly from your bank account to your suppliers' bank accounts, in the desired currency.
You can easily import/reconcile invoices and contacts from your favourite accounting and payroll software to automate your payments.
How to pay an invoice by credit card
Now that you understand the advantages and disadvantages of paying your invoices with a credit card, let's break down how to do it:
#1: Check the vendor's payment options.
Not all vendors accept credit card payments, so the first step is to check whether the vendor you're trying to pay allows this payment method.
#2: Choose the right credit card.
If your vendor does accept credit card payments, the next step is to choose the right credit card for the job. If you're trying to earn rewards, look for a credit card with a rewards program that aligns with your spending habits. If you're trying to pay off a large invoice over time, consider a credit card with a 0% introductory APR on purchases. And if you're concerned about fees, look for a credit card with low or no fees for balance transfers, cash advances, and foreign transactions.
#3 Make the payment.
You'll need to provide the vendor with your credit card information, which typically includes the card number, expiration date, and security code, just as you would when paying an invoice with a debit card.
#4: Confirm the payment.
After you've entered your credit card information, the vendor will process the payment and send you a confirmation. Be sure to keep a record of this in case you need to reference it in the future.
#5: Pay off your credit card balance.
If you didn't pay the invoice in full, be sure to pay off your credit card balance as soon as possible to avoid accruing interest. You can do this by making a payment online or by mailing a check to the credit card issuer.
How to pay your invoice quickly and securely
You can also use a payments solution like Crezco to make direct, account-to-account payments quickly, safely and securely.
Crezco makes it easy to pay international invoices from vendors located around the world, and offers a wide range of payment options to allow you to transfer funds to over 70 foreign currencies.
With Crezco, you can take your payments processes to the next level by choosing to make single payments and bulk payments, collect payments, and set up recurring payments to make paying your invoices faster and more convenient than ever.
Are you ready to start paying your invoices more securely?
Paying invoices with a credit card can be a convenient and rewarding way to manage your business expenses, and - as the steps above have demonstrated - it’s just about as easy as paying your invoices by debit card.
Just be sure to pay off your balance as soon as possible to avoid accruing interest and negatively impacting your credit score.