For most people rent is one of, if not the most important bill that needs to be paid each month. If you don’t own a house or condo then you probably pay to rent your home and the monthly payment process may sometimes seem a little bit tedious. But the good news is that as payment technology grows and evolves there are new ways for landlords to receive payment from their renters.
Payment Methods
Cheques and cash are the most common ways to pay for rent but in recent years landlords have been able to start accepting electronic payments. This is a great option because electronic payments are often automatic which means that you don’t have to remember to drop off your rent on the first of each month. Electronic payments typically happen through a fund transfer between your bank account and the bank account of your landlord, but what about paying for your rent with a credit card?
Can You Pay Your Rent With Your Credit Card?
In most cases, landlords won’t accept credit cards as a method of payment for rent. They usually prefer cheques, direct deposits or even cash. While your landlord may not accept credit cards as a method of payment there are third-party apps and rent pay services that allow you to use your credit card to pay rent. These services work by collecting your credit card payment and then depositing it in your landlord’s account for you. Your landlord will then receive the payment within 2 – 7 business days. However, do be aware that these services usually come with a fee.
Here are a few services in Canada that you can use to pay your rent with your credit card.
| Fee | Types of Credit Card | |
| RentMoola | 0.99 – 3.99% | Visa, Mastercard, Amex, Union Pay |
| Plastiq | 1%-2.85% | Visa, Mastercard, Amex, Discover, Diners club |
| Get Digs | 1% | Visa |
Benefits of Using Your Credit Card to Pay Rent
Earn Rewards
One potential benefit of paying your rent with a credit card is earning a significant amount of reward points. Rent is typically a large sum of money, so charging it to your credit card could be a type of investment for you. It’s possible for you to earn cash back from your credit card company and essentially lower your monthly rent cost. Or if your reward system gives you points that you can then use to buy specific items, you could then buy gifts and save your own cash for other expenses.
While this is in theory a great benefit it’s important that you figure out if the rewards you’ll earn outweigh the fees that will be associated with charging your rent to your credit card.
Building a Credit Score
If you’re struggling to build a credit score from the ground up then charging your rent to your credit card might be a good option for you. But, if you can’t afford to pay your rent with cash or a cheque then charging it to your credit card will have the opposite effect you’re looking for and could potentially hurt your credit score for years to come.
Furthermore, you need to consider the fees when making your decision. If you’re desperate to improve your credit score then paying the fees might be worth it. On the other hand, if you’re only looking to improve an already good credit score, paying the fees probably isn’t worth it for you.
Dangers of Using Your Credit Card to Pay Rent
Hidden Fees or Extra Costs
It’s important that you ask about the type and amount of fees before you choose to use your credit card. There is also the possibility that your building’s management uses a third party system to accept credit card payments, in this situation the fees might be even higher. Depending on the size of these fees the convenience of paying your rent with a credit card might not be worth it.
Can you Pay off one credit card with another
Added Debt
Aside from understanding any extra costs involved with paying your credit card, you should also beware of maxing out your credit card as rent can be a big expense. If you’re unable to pay your credit card in full, it can lead to high-interest costs. Moreover, your rent can affect your credit utilization ratio which can also negatively affect your credit score. While the rewards of paying with your credit card can be tempting, you shouldn’t be putting your rent on it if you can’t afford it.
When is it Good to Use Your Credit Card For Rent?
You had an unexpected expense – Life is unpredictable and can sometimes leave us strapped for cash due to unexpected events like a medical emergency, a car breakdown and more. If you’re a little low on cash and need a little help with rent for a month, then using your credit card is worth it.
Your credit card rewards are worth it – The fees associated with a paying rent with your credit card may be worth the plunge. If your credit card rewards outweigh the fees, then paying with your credit card is a good choice. For example, if you pay 1,200 in rent and the processing fee is 1%, you’ll pay $144 a year in fees. As such, a credit card that provides you with rewards that exceed this amount would be worth it.
Sign-up Bonus – Some credit cards have a welcome bonus that requires you to spend a certain amount within a period of time in order to receive the bonus. Paying your rent with your credit card to help you gain that bonus can be a good strategy.
The Bottom Line
The bottom line is yes you could potentially use your credit card to pay your rent, but whether or not you actually should take a little more thought. If your landlord or property’s management has the ability to take credit card payments then the convenience might be exactly what you’re looking for. But you’ll have to make sure that the fees not outweigh the convenience. Everyone’s situation is different and therefore you’ll need to make your own decision, just make sure you take into account the above pros and cons and you should be able to make the best choice for yourself.
