Is it, however, prudent – or even viable – to pay your rent with a credit card even if your landlord only accepts checks or direct deposit
If you’re trying to build credit or get benefits like airline miles or cashback, it’s a good idea to use your credit card for the majority of your purchases.
Even if your landlord only accepts checks, you can pay your rent using a credit card.
Rent payment options are now available on a variety of websites and payment apps, allowing you to pay your rent online with a credit card.
These websites accept credit card payments and send a check to your landlord on your behalf. Because accepting credit card payments isn’t free, all of these providers charge a fee.
The benefits of paying the rent with a credit card
Even once fees are deducted, there are several compelling reasons to consider paying your rent with a credit card.
If your credit card has a rewards program, charging significant bills and purchases to it will help you earn points or cashback faster.
Keep in mind that you’d need to obtain a rather significant rewards rate for it to outweigh the costs you wind up paying.
If you pay a 3% fee, for example, your cashback rate should be greater than 3%.
Complying with spending limits
Some rewards credit cards offer large sign-up bonuses to new cardholders, but you must spend a particular amount during the first few months to qualify.
If you fall short of the criteria, paying rent using your credit card to make up the difference is almost always worthwhile, as many credit card sign-up bonuses are worth more than $500.
Filling financial gaps
While paying extra fees to pay your rent using a credit card isn’t a good idea if you have enough money to pay rent, it does provide you a little more flexibility if you fall behind on rent one month.
Just make sure to save it for extreme circumstances rather than making it a habit.
There are various advantages to paying your rent using a credit card, but they are not free.
The fees connected with using your credit card to pay rent are the most obvious reason to avoid it. Even while a 3% fee may appear insignificant, it adds up when making large payments.
You will not have to pay interest fees if you pay your balance in full each month.
Putting rent on your credit card, on the other hand, may entice you to carry a balance, resulting in interest fees on top of your initial processing fees.
Putting rent on your credit card for the first time is unlikely to have a substantial influence on your credit score, especially if you pay it off soon.
However, because credit utilization, which includes your debt to credit ratio, accounts for a significant percentage of your credit score, carrying a large balance can lower your score.
If you prefer to pay your rent using a credit card, you have numerous possibilities. The fees they charge and the credit cards they accept will be the most important variables to consider.
Plastiq is a popular choice because they have some of the lowest credit card fees. You may also utilize their service to pay for other expenses such as taxes and tuition.
Fee: 2.5% for credit cards
Cards accepted: Visa, Mastercard, American Express, Discover, JCB
Venmo is different from the options mentioned above.
It’s a mobile payment app that allows you to quickly and easily transfer money to anyone else who has it, using a debit or credit card.
Venmo doesn’t offer to send your landlord a rent check on your behalf, so the only way to pay your rent with the application is if your landlord uses it and agrees to receive your rent payments through it.
Cards accepted: Visa, Mastercard, Discover
Finally, whether or not you should pay your rent with a credit card is a matter of personal preference.
It’s probably worth it if the incentives you’ll receive from your credit card outweigh the fee you’ll pay.
Otherwise, avoid using your credit card and paying fees until absolutely required.