Can you pay rent with your credit card? Yes, you can. It isn’t ideal, but if you’re a responsible spender it can actually be lucrative if you have a rewards card. A lot depends on the way your landlord wants to receive rent. If you have the option of paying through third-party services then you should be able to pay rent online with a credit card, albeit with a fee involved.
We take a look at how to pay rent with a credit card and the pros and cons of doing this.
How to pay rent with a credit card
There are a number of third-party service tools that allow you to pay rent online using a credit card. Your landlord may need to use some of these services too, but there are others that don’t require their involvement and will make the payment on your behalf.
The main thing to remember is that any third-party service tools you use will charge a fee for the convenience. This is usually around 3% but can be up to 3.5% for some.
A few of these tools include: Plastiq, RadPad, SparkRental, RentTrack and Venmo. But there are many others at your disposal. This article has a comprehensive list of tools that let you make rent payments by credit card.
Pros of paying rent with a credit card
Earn rewards points
Paying a month’s rent on your credit card could help you to reach the spending threshold of a rewards card and receive bonus points in the process. The third-party service fee can be offset if you get a large enough amount of points, and if you pay off your credit card balance in full each month to avoid getting stung by interest.
Writing checks can be a pain, especially if your rent is due before payday, and may not clear in time. You can save yourself the stress and hassle, not to mention landlord late fees, by paying rent with a credit card and paying it off in full when you get your paycheck.
Cons of paying rent with a credit card
The fees that third-party services charge can add up if you’re not earning enough rewards to offset them. For instance, if your rent payment is $2,000 a month and you’re paying a 2.99% fee, that’s nearly $60 a month extra. It’s best to crunch the numbers to make sure that when you pay rent with a credit card it’s worth it.
You need to keep a close eye on your credit card balance to ensure you pay it off by the end of the month. If you don’t you’ll end up paying interest as well as a fee. It’s incredibly easy to get caught up in a spiral of debt this way, and it can be hard to recover from.
Credit utilization is a factor that can affect your credit score. This is not ideal if you already have a low credit score. For example if you have a $2,000 credit limit and a balance of $1,000, then your credit utilization would be 50%. Keeping it between 20-30% is ideal so your credit score isn’t lowered further.
One way to get around this is to get a credit limit increase from your issuer so paying rent with a credit card doesn’t affect your credit utilization, and therefore your credit score.
So should you pay rent with your credit card?
As you can see there are pros and cons to paying your rent with your credit card, so you really need to weigh up the options and decide which is best for you.
If it’s flexibility and convenience you’re looking for, and you’re a conscientious spender, then paying rent with a credit card can be a good option. If you have a rewards card then a hefty rent payment can also help you earn points that offset the cost of third-party fees.
However, if you’ve got a low credit limit, unstable income or tend to live beyond your means on a regular basis, then it might be too risky an option. You could get yourself into a situation that’s difficult to recover from, so it’s best to look at other ways to pay your rent when money is tight.
Angela Pearse is a blogger for Zumper who frequently combines travel with freelance writing. She’s passionate about Art Deco hotels, historical novels, Netflix, hiking and healthy living.