Key takeaways
- Your ability to pay rent with your credit card depends on your landlord’s rules.
- If your landlord doesn’t accept credit card payments directly, you might have to use a third-party service like Plastiq — but the processing fees involved will likely cancel out any rewards you earn, so it might not be worth the effort.
- Paying rent with a credit card could still be worth it, however, if you have a card that allows you to waive those fees, or if you’re using your rent payments to reach a lucrative welcome bonus.
Credit cards are a convenient option for making everyday purchases, especially if you want to earn rewards or cover expenses until payday. But there are some expenses you usually can’t pay with your credit card, including rent. However, if your landlord doesn’t accept credit card payments, you can still pay rent with a credit card through third-party payment services.
Charging your monthly rent on a credit card may be convenient, but it’s important to consider the benefits and downsides first — especially when it comes to the fees, which often make the process not worth it to try. Here’s what you need to know to decide if it’s the right move for you.
How to pay rent with a credit card
There are two ways you can pay rent with a credit card. You can go directly through your landlord or use a third-party payment service.
1. Pay rent directly to your landlord
If your landlord accepts credit card payments, you can submit your payment directly. Many landlords, especially larger property management companies, have software set up to accept credit card payments, either in-person or online.
Before you use your credit card to pay your rent, check with your landlord to find out whether you’ll be on the hook for any fees. For example, if a payment service charges a 3 percent processing fee, your $1,500 rent payment will effectively become $1,545 — and because most credit cards offer no more than 2X points or 2 percent cash back for bills like rent, your 3 percent processing fee will typically cancel out the rewards you earn.
2. Pay rent through third-party services
If your landlord or property management service doesn’t allow credit cards as a payment option, you might consider using a third-party payment platform service to help you pay your rent with your credit card.
| Name | Overview | Transaction process | Fees |
|---|---|---|---|
| Plastiq |
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| PlacePay |
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| PayPal |
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| Venmo |
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The advantages of paying rent with a credit card
Let’s walk through the primary reasons you might want to pay your rent with a credit card to better understand if it’s a good idea or not.
Buying time to pay off your rent
If you’re short on cash, you may be looking to avoid a late payment fee or stave off eviction by charging your rent to your credit card. This is an understandable use of your credit card, but borrowing to cover rent or other bills can turn into a risky situation if you’re not careful. Make sure to pay your credit card bill before the due date to prevent interest charges from piling up. For this reason, using a credit card to buy time should only be considered as a last resort option as it can lead to a cycle of debt.
Earning rewards
One advantage of paying rent with a credit card is that you’ll earn cash back, travel or other credit card rewards. The base rewards rate you’ll likely earn for a rent transaction is a range of 1 percent to 2 percent (or 1X to 2X points in a rewards program). If you charge a $1,500 rent payment on your cash back rewards card, for example, you could earn $15 to $30 in cash back every month.
Keep in mind:
Fees for third-party payment services are often higher than 2 percent. Unless you use a card or system that waives processing fees, you’ll likely end up paying more in processing fees than you earn in rewards.
Qualifying for a welcome bonus
Credit card sign-up bonuses are some of the most valuable rewards you can earn. And since the best sign-up bonuses can be worth as much as $750 or even $1,000, it’s a smart move to do whatever it takes to clear the minimum spending requirement. Paying your rent on credit is one way to get the job done.
For example, let’s say you’re approved for a credit card that offers a huge haul of bonus points after you spend $4,000 on purchases within the first three months of opening your account. If you charge $1,500 a month in rent payments to the card for those three months, you’ll end up spending a total of $4,500, which is more than enough to earn the intro bonus.
Making it easier to earn welcome bonuses is why Matthew Meier, founder of Las Vegas tour company MaxTour, likes to use his credit card to pay rent.
“I like to pay my rent via credit card,” says Meier. “Paying rent with credit helps me meet the required spending minimums to get sign-up bonuses.”
Of course, you’ll need a solid plan to repay the balance before the due date each month to eliminate your debt and avoid costly interest charges. Then, once you’ve earned your sign-up bonus, you might want to go back to paying your rent via check or direct debit — especially if the fees associated with paying your rent via credit outweigh the cash back, points or miles you might earn.
The downsides of paying rent with a credit card
As with any financial decision, it’s good practice to weigh the benefits versus the risks. Let’s review the following risks to help determine if it’s worth it to pay for your rent with a credit card.
Losing money to fees
If you’re using a third-party payment company to pay your rent, the processing fees you incur could be considerable and could negate any credit card rewards you earn. And, if you continue to pay via a payment service, your transaction fees will add up over time. For example, if you use Plastiq to pay your monthly $1,500 rent payment, you’ll be on the hook for a $43.50 fee each time (2.9 percent). That adds up to a sizable $522 per year.
One way to minimize fees is to take advantage of your credit card’s payment features. “I have the Blue Cash Preferred® Card from American Express and I pay my rent monthly using the card’s Send & Split feature,” says Alex Ward, an audio engineer and entrepreneur.
American Express Send & Split is an easy way to split payments with other Venmo and PayPal users. Send & Split also allows you to send money through Venmo or PayPal without paying the standard Venmo or PayPal credit card fee.
“I pay my landlord through Venmo,” Ward told us.
If your landlord also accepts Venmo, Amex’s Send & Split could be a great way to pay rent with a credit card.
Keep in mind:
Send & Split can allow you to avoid processing fees on Venmo or PayPal, but using the payment feature won’t earn you Membership Rewards points.
Accumulating debt
While it’s convenient to use a credit card, especially if you’re in a financial bind, it can lead to a vicious debt cycle if you’re unable to make your credit card payments on time. Currently, the average credit card interest rate is just above 20 percent. If your balance rolls into the next billing cycle, the interest will mount quickly and likely eliminate any benefits you received by charging your rent to your credit card.
That’s why it’s important to have a plan to pay off your credit card bill — otherwise, your monthly rent payment could turn into credit card debt.
Ward also uses Amex’s Pay It, Plan It® feature, which allows you to pay off large purchases like rent payments with a fixed monthly fee instead of compound interest charges. “Sometimes I use Plan It to stretch the rent payment over several months,” he explains.
Risking your credit score
Paying your rent with a credit card will likely increase your credit utilization ratio, which is the percentage of your available balance you’re using. Your credit utilization ratio is significant because it accounts for 30 percent of your credit score.
Individuals with high credit scores tend to have lower credit utilization ratios, and it’s a smart idea to keep your ratio on each of your credit cards below 30 percent in the long run. While you’re not likely to see much of a difference if you pay your card off completely and aren’t always carrying a balance above 30 percent, it’s still something to keep in mind as a long-term trend.
To quickly determine your current ratio, check out Bankrate’s credit utilization ratio calculator.
Which card should you use to pay rent?
If you’ve decided that paying your rent with your credit card is worth it, then your best option is to do so with a new card that has a large welcome bonus you’re trying to reach or with a card that allows you to avoid processing fees.
Best for avoiding processing fees
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- 3X points on dining purchases
- 2X points on travel-related purchases
- 1X points on rental payments without the transaction fee (up to 100,000 points in a calendar year)
- Double points on purchases excluding rent on Bilt Rent Day, the first day of each month
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The Bilt Mastercard® has no annual fee and is unique in that it’s geared toward renters who want to avoid processing fees. The card issuer eats the cost of any processing fees and offers several fee-free ways to pay your rent using the Bilt app, including by sending a check directly to your landlord. You can also pay rent with the card through Venmo, PayPal or an online portal.
So, a $1,500 rental payment can earn you 1,500 points, and you get to skip the 2 to 3 percent processing fee that many rental portals charge for credit card transactions. You can then redeem your points for:
- Rent
- A future home down payment
- Fitness partner purchases
- Shopping via Amazon or the Bilt Collection
The value of your points may vary depending on how you use them. According to Bankrate’s latest point valuations, Bilt points can be worth 2.1 cents per point on average if you maximize their value with the Bilt Rewards program’s transfer partners. But if you redeem your points toward your monthly rent, they’re only worth 0.55 cents per point.
But, in order to maintain eligibility for 1X points on rental payments, you must have at least five posted transactions per billing cycle, or else you’ll only earn a flat 250 points for paying rent. If you were planning to pay only rent with this card and charge nothing else, its earning power becomes limited. If you plan to use the card at least five times each billing cycle, the Bilt card is worth considering as an addition to your wallet.
Best for a large welcome bonus
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- 5X miles on hotels, vacation rentals and rental cars booked through Capital One Travel
- 2X miles on all other purchases
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The Capital One Venture Rewards Credit Card comes with a flat rate of 2X Capital One miles on all purchases and a welcome bonus of 75,000 miles when you spend $4000 within 3 months from account opening, just like its sibling card, the Capital One Venture X Rewards Credit Card. Instead of its sibling card’s $395 annual fee, however, the Venture Rewards card only costs $95 a year.
While this card’s welcome bonus isn’t necessarily the largest on the market right now, it’s still sizable enough to net you $750 in travel through the Capital One Travel portal. If you transfer your points to a travel partner, they could be worth even more.
Those transfer partners are also what makes this card a good choice from a fee perspective. While the 2X flat rate you’ll get from charging your rent to the card likely won’t outweigh the processing fees you have to pay, it’ll cancel out a larger chunk of those fees than cards with 1X or 1 percent rate — and if you’re able to transfer those points to get more value from a travel partner, then you’d be that much closer to canceling out the charge of the processing fees. This means that you’ll have even more miles saved up when you finally hit your spending threshold and earn your welcome bonus.
The bottom line
If you have a card like the Bilt Mastercard that waives processing fees, paying rent with your card could definitely be worth it. Paying rent with your card may also be worthwhile if the value of your rewards is greater than the processing fees you’d be on the hook for, like in the case of using your rent payments to earn a welcome bonus. For either situation to work out in your favor, however, you’ll have to pay your credit card bill in full each month without accruing interest charges.
However, if you’re unable to pay your credit bill on time each month, paying your rent using your credit card could be a risky move. Failing to pay off your balance on time could harm your credit score and lead to a cycle of debt — not to mention cancel out any potential card rewards you could get. Weigh the advantages and downsides as they relate to your financial situation so you can make the best decision for your circumstances.
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