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Credit Cards

How To Pay Rent Using Credit Card

By David Krug 6 minute read

If you need to spend a certain amount in order to qualify for a sign-up bonus, it could be worthwhile. The due date for your rent has come around once more. Have you ever considered using a credit card to pay your rent instead of writing a check or making a bank transfer?

Credit card sign-up bonuses might make sense if you want to maximize your benefits, but it’s not a good option for everyone. Let’s take a look at how you may use a credit card to pay your rent (or mortgage) and see whether it makes sense for you.

Is it a smart idea to use a credit card to pay for your rent or mortgage?

Whether or not you should use a credit card to pay your rent depends on your own situation and ambitions. To begin, most businesses that enable you to use a credit card to pay for your rent or mortgage will charge you a fee. A third-party service provider like Plastiq charges a transaction fee of 2.5 percent. Even yet, if you’re aiming to satisfy the spending requirements for a credit card’s sign-up bonus, you may be able to justify the additional fees. 

A few thousand dollars over a three- or four-month period is what we’re talking about when it comes to credit cards. Considering that your rent or mortgage is likely to be one of your main costs, charging it to your credit card might assist you reach the minimum spend without turning to frivolous purchases.

If you’re short on cash and your landlord’s late charge is more than the processing cost for credit card payments, it may be a smart idea to pay your rent using a credit card. In theory, this strategy might save you some money, but only if you pay off your credit card amount in full and on time. If you don’t, you may end up paying far more than you planned for in interest on your credit card.

Is it possible that this will have an impact on your credit score?

The use of a credit card to pay your rent or mortgage may have further ramifications. Your credit usage percentage might be negatively affected if you use credit to pay for a substantial quantity of money. You may calculate your credit usage ratio by looking at how much credit you have vs how much you’ve used so far. Your credit score may suffer if you utilize more than 30% of your available credit.

As an example, let’s say you have a $6,000 credit limit on your credit card and your monthly rent is $1,000. You’ve already used up 25% of your credit limit if you pay your rent with a credit card. It’s unlikely that a single charge would have any impact on your credit rating.

How can you use a credit card to pay your rent?

If you’re looking for a place to rent, find out if the owner or management accepts fee-free online credit card payments. Because of it, you’re fortunate. Third-party services are required if your landlord or property management does not allow you to pay your rent using a credit card.

Some of the choices below may not accept all credit card types:

  • Paying using a credit card will cost you 2.99 percent more with this service. If you live with roommates, you may divide the rent and set reminders for when it’s time to pay it. Indirect deposit payments will be sent to the landlord or property management firm.
  • Using Plastiq, you’ll pay a 2.5% charge for most major credit cards. Paying your landlord is as simple as writing a check or making an electronic transfer. Plastiq has a referral program through which you may earn points against your monthly subscription price.
  • In order to pay your landlord or property management by check, all you have to do is pay a flat 2.99% fee each transaction on your credit card. Your money will come on time if you divide the bill with your housemates.
  • Use your Visa, Mastercard, Discover, or American Express card to pay your rent and pay a 2.99% service charge. In addition to the ability to set up regular payments, MoolaPerks gives you access to exclusive offers and discounts at well-known stores like Starbucks and Booking

Some third-party providers may see your rent payment as a cash advance, so be aware of that before you pay. Fees or interest expenses might be incurred as a result of this. Don’t get caught spending more than you bargained for by making sure your transactions are counted as purchases.

How can you pay your mortgage with a credit card?

You’ll have a difficult time locating a mortgage business that accepts credit card payments. Aside from that, certain credit card companies won’t let you use credit to pay your mortgage. A careful reading of the tiny print will help you determine whether or not you can participate.

If your credit card company does accept mortgage payments, your best chance may be to use third-party services like the ones listed above.. Contact your mortgage lender and ask whether you may use a credit card to make payments. Check with a third-party provider if you don’t know what the rules are. Plastiq, for example, exclusively accepts Mastercard and Discover credit cards for mortgage payments.

Consider a money order to pay your rent

Purchasing a money order using a credit card is another option for making a rent or mortgage payment. Unlike a check, the recipient of a money order may be assured that they will get their money. An extra charge for manufacturing the money order, which is composed of paper, is normally added to the amount you’re sending in order to acquire a cashier’s check.

Money orders may be purchased at a wide range of locations, including your local post office, bank, convenience store, grocery store, and big-box retailer. One thing to bear in mind before you head to your local Western Union is that money order purchases are typically considered by credit card providers as cash advances. If you buy a money order from a bank, you may additionally have to pay a higher interest rate and an additional cash advance fee to your card issuer. This might increase the cost of the money order.

It’s possible to acquire prepaid general-use gift cards from suppliers like Visa and Mastercard using your credit card. Gift cards with a PIN and the ability to be used as a debit card can be used to pay for money orders at many locations that provide the service.

Many money order providers will not accept a generic gift card with a PIN as a debit card from a credit card company. To avoid wasting time and money on a payment option that won’t work, it’s always a good idea to verify with your credit card and money order provider before making any transactions.

Are the costs justified?

When it comes to fees, it’s up to you to decide what works best for your situation.
Take the Chase Sapphire Preferred as an example. In the first three months, if you spend $4,000, you’ll make $60,000. If your monthly rent is $1,000, you’ll utilize Plastiq to make the payment.

Plastiq’s costs will amount to $75 over the course of three rent payments. These payments might help you meet your spending criteria and earn you the $750 worth of travel through Chase’s Rewards Portal, which is worth 60,000 points. If this is the case, the benefits you receive much outweigh the costs you incurred. In the end, it may not be worth the effort if you’re paying fees every time you pay your rent and aren’t getting any incentives or extra points.