Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Written by Shuman Roy
Content Writer & Entrepreneur Shuman Roy

Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP® Joel Ohman

UPDATED: Jun 28, 2022

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Here’s a little tip/reminder that you can usually pay all your insurance premiums with a credit card. If you plan it, you can schedule an automatic payment for that amount to avoid unnecessary interest or debt while still taking advantage of all the benefits your credit card company is willing to offer.

Of course, it’s essential to make sure you use the right card. Some credit cards have little to no rewards while others offer airline miles, cash rewards, and much more. You can only get the rewards if you’re using the right card. Of course, keep in mind, your insurance company may also charge a small fee to charge monthly payments to a credit card rather than going through your bank account.

This isn’t to say you should pay your insurance with a credit card because you can’t afford to write a check or pay cash. You should never get yourself into debt to earn points or other rewards. This is true whether you’re paying for insurance payments, a vacation, or anything else. You should maximize your rewards with payment methods, not increase your credit card payments in general.

How much could you collect with credit card points?

If you take a moment to think about it, we spend thousands of dollars annually on insurance, from car insurance premiums to home and health. A cheap auto insurance premium might be as little as $400 every 6 months or more depending on where you live, your driving record, and other factors. If you have secondary coverage or more extensive insurance coverage, you’ll pay more. If you direct this through your credit card, you could earn thousands of reward points just paying for your auto insurance policies. When you look at every other insurance provider you work with (life, health, renters, homeowners, etc.), your rewards could add up quickly.

I know I pay nearly $300 a month for health insurance (which is an ongoing necessity). So throwing that on a rewards credit card gives me 300 points/miles each month. That’s 3,600 points annually right there.

Then there’s auto insurance, which can be paid monthly, semi-annually, or annually.

For most people, that’s another $1,500 to $2,000 each year, depending on your policy. If you’ve got teenagers to worry about, it’s even higher, potentially a lot higher.

Let’s not forget homeowner’s insurance, which adds another thousand or so annually in many cases.

Altogether, the aggregate premium can be quite expensive ($5,000 or more), and also quite lucrative if you charge it using a cash back or rewards card.

Don’t just think about the annual costs of insurance, consider the lifetime costs as well.

Did you know that the average American spends $84,388 on car insurance during their lifetime? That’s a lot of points or miles, especially if you’re using a credit card that gives you 2X points/miles on every purchase.

For the record, there are multiple credit cards that offer double points on ALL purchases, so you can rack up points in a hurry.

Additionally, points can be valued at more than one cent apiece if used for things like airline tickets and travel, so the value could be pretty significant.

How does a free first-class ticket to Europe sound, just for paying your insurance premiums?

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You Can Meet Spending Requirements by Paying Your Insurance

Another good reason to charge your insurance premiums relates to credit card sign-up bonuses.

Say a certain credit card requires that you spend $3,000 in the first X amount of months of membership to get 50k bonus points (worth at least $500).

Instead of frivolously spending money to meet that requirement, or buying things you don’t need, paying your insurance could be a great way to reach that target.

As noted, insurance premiums can amount to thousands of dollars, so using plastic instead of cash is a good way to take a big bite out of that requirement.

But just to reiterate, this isn’t an invitation to swipe and not pay your credit card in full. If you don’t pay it off in full each month, you’ll be subject to finance charges that will essentially eclipse any savings from the points earned.

So be responsible when putting your insurance costs on plastic. If you can’t handle that responsibility, just send a check.