It’s almost that time of the month again when you have to pay your rent. However, let’s say you don’t have the money to pay your rent yet, what’re you going to do? Consider using a credit card to pay your rent.
You can definitely go this route and depending on your card, you may even earn some rewards. Still, keep in mind it may cost you if you misuse your card. Continue reading to learn more.
How to Pay Rent With a Credit Card
A downside with this method is that most landlords don’t accept credit card payments for your rent. In place of this, they want checks because they have to pay a fee to accept credit card payments. However, you can still pay your rent with a credit card, but you’ll have to use a third party service and it may cost you.
These companies or platforms such as Cozy, RentShare, Plastiq, Avail and Venmo provide this service. They can charge between 2.5 percent to 3 percent per transaction. Also, some of these services will even report your payments to the credit bureaus, so there is an opportunity to build or hurt your credit.
Pros and Cons of Paying Rent With a Credit Card
Here’s a quick rundown of the pros and cons of paying your rent with a credit card:
- It might help to use a card payment for your rent to reach a credit card’s spending requirements for a cash reward or bonus points.
- It’s a good way to make ends meet before payday and it beats predatory loans, such as payday loans.
- If payments are reported to credit bureaus, it could help your credit score.
- You’ll pay a fee for the convenience.
- If the fee you pay costs more than the cash-back credit card rewards you can earn, you’ll lose money.
- The charge on your card will increase your credit utilization ratio. You want to keep this number as low as possible, so around 10-30%. If your rent payment causes this number to go past 30, then pay with a check.
Paying rent with a credit card can be a great way to earn credit card bonuses as well as build credit since some third party services report to the credit bureaus. Keep in mind that you may be charged fees if you were to go through a third party service.
If this is not your bank or are banking with another institution, you can check out our bank guide master list to help you with your banking questions or browse through our archives.
Leave a Reply