For many Canadians, rent is one of the biggest bills they pay each month. While paying by cheque may still be the traditional method of rent payment, paying rent by credit card may be much more convenient. Plus, if you have some type of rewards card, a few thousand dollars per month in rent can help you rack up the points.
The question is, can you pay rent with your credit card in Canada? If so, how would the process work?
Key Points
- Individual landlords don’t typically accept credit cards as a form of rent payment.
- Third-party services are available that serve as middlemen between tenants and landlords to help renters use credit cards to pay their rent.
- Be wary of service fees when using third-party services to ensure it makes financial sense to use them.
Can You Pay Your Rent With Your Credit Card In Canada?
Generally speaking, landlords don’t accept credit cards as a method of payment for rent. They usually prefer cheques, direct deposits, or even cash.
Why Don’t Landlords Take Credit Cards As Rent Payments?
Landlords have several reasons why they may not accept credit card payments for rent:
- Transaction Fees: Credit card payments come with processing fees, which range from 2% to 3% of the payment amount. These fees can add up, particularly for large or multiple rent payments.
- Risks Of Chargebacks: Cardholders can dispute charges on their credit cards, which can result in chargebacks. This can be a hassle for landlords, and can also cause financial losses.
- Delayed Processing: Unlike cash payments or direct bank transfers, credit card payments tend to take a few days to process. This can cause issues with the landlord’s payment schedule.
- Extra Administrative Work: Handling credit card payments requires additional administrative time and effort, which many landlords may not be willing to deal with.
Is There A Way To Pay Rent With Your Credit Card?
While your landlord may not accept credit cards as a method of payment, there are third-party apps and rent payment 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 to 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.
| Platform | Fees | Credit Reporting | |
| Letus | Not specified | Yes (for an extra fee) | Learn More |
| Chexy | 1.75% | Yes (free with Credit Builder) | Learn More |
Benefits Of Using Your Credit Card To Pay Rent
There are a few key advantages of using your credit card to pay rent every month:
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 maximize your points.
Depending on your credit card, you may earn more cash back than what you’re paying in fees. That means more money in your pocket. Or if your rewards gives you points or miles that are worth more than the fee, you could potentially save on travel and merchandise.
Building Good Credit
If you’re struggling to build a credit score from the ground up or have poor credit that needs improvement, then charging your rent to your credit card might be a good option for you. By making timely credit card payments every month, you can build a positive credit history. This can help give your credit score a boost.
Learn more: How To Improve Your Credit Scores
Convenience
With a credit card, you can quickly and easily make your rent payments without needing to write cheques or use cash. This saves you the hassle of having to replenish your chequebooks or visit the ATM to access cash.
Drawbacks Of Using Your Credit Card To Pay Rent
Along with the perks of using your credit card to pay rent are a few downsides to consider:
Third-Party Fees
Third-party services tend to charge a fee for processing rent payments via credit card. Make sure you crunch the numbers to determine whether the rewards you can earn outweigh these fees.
More Debt
If you cannot pay your credit card in full every month, you’ll carry a balance, which can lead to high interest payments. This can cancel out any rewards benefits.
Negatively Affect Your Credit
Moreover, your rent can affect your credit utilization ratio, which can also negatively affect your credit score. This is especially true if you carry a big balance month after month. 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 Should You Use Your Credit Card For Rent?
Consider using your credit card to pay your rent if any of the following apply:
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 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.
You Want To Build Credit
Paying your rent regularly with your credit card and then paying off the balance in full every month can be an excellent way to build good credit.
You’re Offered A Hefty 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.
When The Rewards Are Worth More Than The Fee
Compare the rewards to the credit card fee to make sure it’s worth using to pay your rent in terms of earn rate. For example, if you’re getting 4% cash back and the fee is 1.75%, you’re coming out ahead.
How Does Using A Credit Card To Pay Rent Affect My Credit Score?
Paying rent with a credit card can impact your credit score in different ways, depending on how you use your card:
Positive Effect On Your Credit Score
If you consistently make your credit card payments on time and in full every month, this will positively affect your credit score in two ways:
- For starters, you’ll be building a positive payment history, which goes a long way at helping to improve your credit score.
- Secondly, paying your bill off in full will keep your credit utilization low, which is another key factor that affects your credit health.
Negative Effect On Your Credit Score
If you carry a high balance month after month or miss payments, your credit score could be negatively affected. Plus, you may increase your credit utilization if you regularly carry a high balance.
Bottom Line
Even though landlords don’t typically accept credit cards for rent payments (though some might), there are third-party services that can facilitate these transactions. That said, whether you should use your credit card to pay your rent requires some consideration. Namely, consider the service fees and your ability to make your credit card payments every month before choosing this route to pay your rent.
