Many landlords will not accept credit card payments, and some that do will expect you to cover the credit card processing fee. There are several services that will pay your landlord with a check or direct deposit and bill your credit card, but you will pay a fee for this service. Paying your rent with a credit card is convenient and in some circumstances it makes sense, but it can be expensive and it poses risks to your finances and your credit.
How to Pay Rent With a Credit Card
Start by asking your landlord if you can pay with a credit card. Most will not accept credit card payments, but you may be one of the lucky few. Some landlords that accept credit cards will ask you to cover the credit card processing fee. That fee will usually be between 2.5 and 2.9 percent. Some landlords may not pass the processing fee on to the tenant.
If your landlord doesn’t accept cards you can use a service that issues a check or bank transfer to pay your rent and bills it to your credit card.
- Plastiq will deliver either a paper check or an electronic payment to your landlord. You’ll pay a fee of 2.5% to use a credit card or 1% for a debit card. Your landlord does not need to open an account with Plastiq.
- PayPal has credit card processing facilities built into its checkout process. The fee is 2.9% plus $0.30 per transaction, and your landlord will need to have a PayPal account. PayPal offers nearly instantaneous payment, an advantage if you’re paying at the last minute.
- Venmo is a money-transfer app that allows payment from credit cards, debit cards, and in some cases through direct transfer from a bank account. Your landlord will need to have a Venmo account. Your landlord will not know that you’re paying with a credit card.
- RadPad delivers a check to your landlord with an on-time guarantee and bills your credit and bills your credit card. The processing fee is 2.99%. RadPad allows you to schedule payments in advance.
- RentTrack will pay your rent with a paper check or an Automated Clearinghouse (ACH) payment. The fee is 2.95% for credit card payments or $6.95 for ACH payments. RentTrack reports your payment history to the three major credit reporting companies, Experian, Equifax, and TransUnion. This lets you build your credit history with on-time rent payments even if your landlord does not report.
- Place (formerly Rentshare) charges 2.99% for credit or debit card payments and $1.95 for ACH payments. Your landlord will need to accept direct deposits. Place is designed to allow roommates to share the cost of a single rent payment. Payments can be automatically scheduled or made via Android or iOS apps.
- Urbanr charges a maximum of 1.5% for credit card payments and offers a “Go Dutch” option that lets landlords and tenants split the fee. Payments are deposited directly but you’ll have to remember to process the payment five days before it’s due.
- RentPayment charges 2.95% for credit card payments, 0.95% for debit card payments, and$4.95 for eCheck or ACH deposits. Email and text alerts help you avoid late payments, and you can pay with cash at any MoneyGram outlet. RentPayment reports your payment history to TransUnion.
All of these services allow you to pay your rent with a credit card. You will still have to decide whether using your card makes financial sense.
Advantages of Paying Rent With a Credit Card
Paying rent with a credit card does have several advantages that make paying rent easier:
- Paying rent with a credit card is convenient. You can pay from home without writing a paper check or having to deliver a check to a management office.
- Paying with a credit card is flexible. If you don’t have cash on hand you can catch up before you need to make a credit card payment.
- You may wish to pay rent with your credit card to accumulate rewards points. Be sure the fee isn’t canceling out the benefits!
- Some cards offer sign-up bonuses that require you to spend a fixed amount in a fixed time. Paying rent adds large payments that you would have to make anyway, which could be a better option than making a purchase just to qualify for a bonus.
- Paying rent with a credit card is cheaper in an emergency than resorting to a payday loan or title loan. If you are making this choice often there may be something badly wrong with your finances.
Disadvantages of Paying Rent With a Credit Card
The convenience of paying rent with a credit card has to be balanced against significant costs and risks.
- The processing fees charged by payment intermediaries may exceed any rewards you earn from using your card. If your rent is $1000 a month and your processing fee is 2.95% you will spend over $350 a year just to deliver your rent.
- Rent payments can add a lot to your credit card balance. If you don’t pay that balance in full every month, you’ll face large interest payments. Using your credit card to delay rent payments can quickly stack up an unmanageable balance carrying a very high-interest rate.
- Paying rent with a credit card could affect your credit. Keeping a low credit utilization rate is good for your credit, and many experts advise keeping your balance below 30% of your limit. Putting rent on your card can bring you over 30% of your limit very quickly. If you plan to pay rent with your card and your limit is low, consider asking your card provider for a credit limit increase.
Assess the Costs and Benefits
Paying rent with a credit card is convenient and can get you out of a tight spot if you don’t have the cash to cover rent. That convenience comes at a cost and carries risks. You will want to look carefully at the costs and benefits before deciding to pay your rent with a credit card.
- If you have a card that offers a significant signup bonus for meeting a specific spending level there’s a clear reason to put rent on your credit card. Once you’ve earned your bonus you’ll have to reassess the costs and benefits!
- If you’re paying rent with a credit card to earn credit card rewards, you’ll have to weigh the processing fees against the value of the rewards. Even if the rewards don’t fully match the fees they may offset enough of the fee to make the balance a cost you’re willing to pay for the convenience of using your card.
- You will need to realistically assess your ability to pay that balance every month. If you have a steady income and an emergency fund, you may not have to worry about making your payments. If your finances are stretched or unstable, be careful. Remember that credit card balances carry high-interest rates and can easily get out of control.
- Keep your card’s credit limit in mind. Using a card with a low limit to pay rent could push your credit utilization to a level that could harm your credit.
Paying rent with a credit card can be a good choice or a bad one, depending on your personal situation and needs. Weighing the advantages against the costs and risks will help you make the decision that works best for you.
