Pay Rent With a Credit Card

Updated on March 12, 2024
At a Glance: Paying rent with a credit card is possible if your landlord accepts it, but there may be extra fees involved. Some third-party services like Plastiq, PlacePay, and RentTrack allow credit card payments, but they also charge convenience fees. It’s important to understand these fees and the terms of the service. Paying rent with a credit card offers flexibility, but high fees and potential impact on credit scores are drawbacks. Exploring alternatives like seeking assistance, finding roommates, or discussing options with the landlord may be helpful in difficult situations.

The pandemic and rising rent have been brutal on most people’s wallets. There might come a time when you don’t have any other choice but to borrow the rent money with your credit card. If you didn’t know, this is absolutely possible. But before you decide to do so, know the procedure, benefits, and consequences that can come of it.

Can You Pay Your Rent With a Credit Card?

Paying the rent with a credit card depends on whether your landlord accepts credit cards as a payment mode. If they don’t, some workarounds will allow you to pay via credit card using third-party services, but you might have to pay extra fees. Some housing agencies allow tenants to pay rent via their Visa or MasterCard credit cards. But they could charge you a convenience fee of around 2.25%.

It can be confusing. You are using a credit card to pay your rent because you are financially struggling or don’t have the cash right now, so why are you being charged an extra fee? This is because every time you make a credit card transaction, the merchants levy a processing fee. They are securing their profits on the money you are borrowing by charging this convenience fee.

You might even be required to pay additional fees depending on your landlord. For example, if your monthly rent is $1,000, a convenience fee of 2.5% will add $25 extra to the payment you are making. In a year, these fees will amount to $300, which is about 33% of the rent you pay monthly.

If your landlord does not accept payments by credit card, you can use third-party online services like RentTrack, RadPad, or Plastiq. These third-party services will help you build a good credit history and stay on time with your payments. But they also charge a convenience fee to convert the credit card payment into a payment that the landlord accepts.

You can inquire with your landlord about acceptable payment methods. Even if you are not paying by cash, they could accept a check, automatic ACH, money order, Venmo, PayPal, Square, and other options.

How To Pay Your Rent with a Credit Card

If you are using a third-party service to pay your landlord with a credit card, make sure you understand the terms of services of that application. Some of them might require your landlord’s involvement.

Plastiq

This app does not need your landlord’s involvement to pay by credit card. It doesn’t even need your landlord to have an account with the app. Every time you use a credit card, they will charge a transaction fee of 2.85%, or 1% if you are using a debit card. You can schedule your payments or do them manually. Your landlord will receive the money electronically.

PlacePay

This app charges a 2.99% fee for a credit card transaction and a $1.95 flat fee for ACH payments. However, this requires your landlord to be involved and manually accept the payment to make the deposit. It also lets you schedule the payment or make it manually through your phone.

RentTrack

The website’s terms and conditions say that you don’t need your landlord’s approval to make payments. This service will send a paper check to your landlord. They charge a 2.95% transaction fee for credit cards and $6.95 for ACH payments. They also let renters improve their credit rating by issuing a credit card. They are registered with all three major credit bureaus: Expedient, Equifax, and TransUnion.

You should ask whether your landlord accepts payment methods via credit card and whether they report these payments to credit bureaus. Credit bureaus calculate your credit score, which could impact your possibility of buying any property, getting a loan, or credit down the line.

Lenders use this information to review your credit history and decide if you are trustworthy to borrow money from them.

Pros and Cons of Paying Your Rent With a Credit Card

Sometimes you might not have a choice but to pay with your credit card. But understand the implications of doing so.

Pros

  • Paying via credit card is extremely flexible. You don’t have to write physical checks.
  • If you have a good credit history and pay off your credit card debt in full every month, this is a good option.
  • You might earn rewards that could help recover some of the convenience fees.

Cons

  • The processing fee can be quite high. A 2.5% monthly fee willl become a substantial amount in a year and could prove to be a financial burden. It could also eliminate any rewards you are receiving via credit cards.
  • The credit utilization ratio could be off balance, which ultimately impacts your credit score. This ratio is to keep track of the credit you are borrowing. The ideal ratio is on the lower end, below 30%. Going above this percentage will really impact your credit scores.
  • If you were not responsible with your credit card payments, it could be maxed out. This means you will not be able to make any other essential transactions, and it could have a huge impact on your credit score.

Alternatives To Using Your Credit Card for Paying Rent

If using a credit card to pay the rent is not an ideal option for you, there are other choices available.

You can look for assistance if you are unemployed and cannot make rent payments. There are local government agencies, nonprofit groups, or charities that could provide help. You can also check with your landlord for assistance if you have an amicable relationship.

Utilize the following resources to reach out for help:

If it is feasible, you could look for roommates to share the burden. You could also move to a cheaper part of the city, helping you stay on top of your rent. Inquire if the landlord has a bonus policy if you can refer new tenants.

You could discuss with your landlord the option of helping with any labor in exchange for a reduction of rent.

Reaching out to family and friends in a time of need is also an option. In fact, if paying rent does not seem like an option, you could also consider moving in with them at least temporarily.

Recalculate your budget and figure out if you have the money to cover your share of the rent every month.

Read More

Conclusion

Hopefully, this article provided you with enough insight into utilizing credit cards for rent payments. Sometimes, credit card rewards are just not worth the debt that you accrue in fees. If necessary, consider utilizing credit cards for a brief period, and make the full payment each month to keep on top of your credit score.

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Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

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