- Paying rent with a credit card is possible, but it comes with several pros and cons.
- It will usually cost you additional money in interest and fees, though the Bilt Mastercard is a notable exception.
- If you're having trouble with rent, you can try working with your landlord on a payment plan.
The possibility of paying rent with a credit card
Just as there are options to pay your mortgage with a credit card, many landlords and property management companies now offer the option to pay rent with a credit card, facilitated by third-party online payment platforms.
This payment method provides convenience and the opportunity to earn rewards or cash back on a significant monthly expense.
Many of the best credit cards earn valuable points and miles that can make a big purchase extra lucrative. However, it's crucial to consider the potential transaction fees, as these can offset the benefits of any rewards earned.
Benefits of paying rent with a credit card
Earning rewards and cash back
One of the benefits of paying rent with a credit card is the opportunity to use a rewards card. Since rent is often your largest monthly expense, you can accumulate significant points, miles, or cash back on that expense, allowing you to truly reap these rewards.
Building credit history
Consistent, on-time credit card payments, including for large transactions like rent, can positively impact your credit score over time.
Avoid late payment penalties
If you use third-party services for credit card rent payments, they will most likely come with payment guarantees. This means you won't be responsible for late fees.
Potential drawbacks and costs
Transaction fees
Paying rent with a credit card often comes with a transaction fee, typically ranging from 1% to 3% of the payment amount. These fees can add up over time, making this option more expensive than paying rent directly. It's important to check whether your landlord or the payment platform charges a fee and calculate how this will impact your budget.
Risk of carrying a balance
If you can't pay off your credit card balance in full each month, interest charges can quickly add up and lead to debt. Credit card interest rates are often higher than other forms of financing, which can make rent payments harder to manage. Over time, this could have a negative impact on your financial standing and credit score.
Impact on credit
Paying rent with a credit card can result in a high credit utilization ratio, damaging your credit score if you don't pay it off quickly. Regularly carrying a high balance might give lenders the impression that you are overly dependent on credit. Paying your rent with a credit card should only be done if you are confident you can pay off the balance in full each month.
How to pay rent with a credit card
To pay rent with a credit card, first verify with your landlord or property management whether they accept credit card payments directly or through a third-party service.
Consider using a credit card that maximizes rewards for the amount you'll be paying. Always calculate the cost of any transaction fees against the rewards earned to ensure it's financially beneficial.
Bilt Mastercard
The Bilt Mastercard is the first credit card to offer rewards for paying rent without paying additional transaction fees — and you can redeem your points for travel, merchandise, and more.
The Bilt card is the best way to pay rent with your card while avoiding fees, and you can use it with most landlords who accept rent payments via Venmo, Paypal, check, or any other online portal.
Read our Bilt Mastercard review to learn more.
Plastiq
Plastiq is a third-party service that lets you pay your rent with a credit card, but it charges a 2.85% fee and it doesn't accept American Express cards.
Still, if you're working to meet a minimum spending requirement on a new credit card to earn a sign-up bonus, or if the points and miles are worth more than the 2.85% surcharge, this could be an option worth considering.
Strategies to maximize rewards and minimize costs
Choose the right credit card
Opt for a credit card offering high rewards on everyday purchases or with a significant sign-up bonus to offset transaction fees. Cards that provide cash back, travel points, or rewards specific to renting can maximize the value of your payments.
Before making a decision, review the card's annual fees and reward redemption options to ensure that the value of the benefits outweigh the costs.
Pay off the balance monthly
To avoid interest charges, ensure you can pay off the balance in full each month. Make certain that you maintain a budget that accommodates your rent payment as a credit card expense. This strategy prevents debt from accumulating and ensures you're truly benefiting from rewards or perks.
FAQs about paying rent with a credit card
Not all landlords or property management companies accept credit cards due to transaction fees and processing requirements. It's essential to check with your landlord directly.
Yes, there are ways to avoid transaction fees when paying rent with a credit card. For example, the Bilt Mastercard lets you pay rent to most landlords without incurring extra fees. Beyond that, some landlords may absorb the transaction fees, or promotional offers through payment platforms that waive fees for the first few months may be available.
To know if paying rent with a credit card is worth it, calculate the net benefit by subtracting any transaction fees from the rewards or cash back earned. Consider the impact on your credit score and the potential for interest charges.
Yes, using a credit card for rent payments can positively impact your score if you manage payments well. However, carrying a high balance can negatively affect your credit utilization ratio, lowering your score.
If your landlord doesn't accept credit card payments, look into the Bilt Mastercard and third-party payment services like Plastiq that allow you to pay rent with a credit card. These services will remit payment to your landlord, though fees may apply.
