Credit cards are not usually the most accepted payment methods for rent however, there is a way to pay rent with credit card without having to pay any fees. Keep reading to know how.
One of your largest recurrent expenses is most likely your rent or mortgage. And there is now only one publicly available no-fee credit card payment option.
Accepting most credit cards without a surcharge would result in most landlords and banks losing 2% to 3% of the monthly mortgage payment or rent due due to bank interchange fees.
Every tenant will always want to pay for their rent in the most convenient way possible.
Bilt Rewards, a new credit card and reward program that allows tenants to pay rent without fees at any apartment or rental unit and provides Mastercard World Elite benefits without an annual cost, is one option that has surfaced.
This article focuses on showing you how to pay rent with credit card without fees.
Table of Contents
What Is A Credit Card?
As per Wikipedia, a credit card is a payment card that is issued to users (cardholders) to allow them to pay a merchant for products and services based on their existing debt (i.e., promise to the card issuer to pay them for the amounts plus the other agreed charges).
The card issuer (typically a bank or credit union) opens a revolving account for the cardholder and extends a line of credit from which the cardholder can borrow money for merchant payments or cash advances.
Consumer credit cards and business credit cards are the two types of credit cards available.
The majority of the cards are plastic, however there are a few metal cards (stainless steel, gold, palladium, and titanium) as well as a few gemstone-encrusted metal cards.
How Does A Credit Card Work?
A credit card allows you to borrow money to spend for your purchases.
For unsecured credit cards, you typically receive a credit limit based on your credit scores, whereas for secured credit cards, you often receive a credit limit based on your deposit amount.
You can use the card to shop at a variety of stores once you've reached your limit. The limit is reduced each time you use your card to make a purchase.
If your credit limit drops to zero, you won't be able to borrow again until you pay off your debt.
Every time you make a payment, your card issuer saves information about your card usage and sends it to the credit bureaus once a month, who use the information to compute your credit scores and create your credit report.
To continue using the card's services, you must repay your debt at the conclusion of the billing cycle.
After you pay, you'll be given a new limit, which will increase over time based on how much you use your card.
How Do You Get A Credit Card?
When you apply for a credit card with your bank or credit union, you will be given one.
If you apply for an unsecured card, you may be subjected to a credit check.
After your application is approved, you can apply for a credit card with a limit that corresponds to your credit score.
For secured cards, all you have to do is pay a security deposit and then you can have the card you want. Your deposit amount determines your limit.
The more money you put down, the higher your loan limit becomes, and vice versa.
A credit card can be applied for online or in a branch. When you apply online, your card is delivered to your home and activated. If you apply in person, you can bring your card with you.
How To Pay Rent With Credit Card Without Fees
There are few apartment complexes and landlords who will accept a credit card without fee through an online system or their own small business.
If this describes you, consider yourself extremely fortunate.
Because of the potential reward value in a year's lease, this should be a question on your checklist whenever you go apartment looking.
If your rent is $1,200 and you pay with a Chase Freedom Unlimited card that earns 1.5 percent cash back (1.5x points), you'll have earned 21,600 Ultimate Rewards points, which are worth $432 according to TPG's estimates, after 12 payments.
Using Bilt Mastercard is another way to pay rent with credit card without fee. This card, which has no annual fee, is currently the only one that does not levy any rent fees.
After the first month, you can earn up to 2x points on rent, with a monthly cap of 4,000 points (but unlimited earnings for non-rent purchases). Bilt points can be redeemed for a variety of things, including 1:1 point transfers to the following travel partners:
- American Airlines AAdvantage.
- Air Canada Aeroplan.
- Emirates Skywards.
- Air France-KLM Flying Blue.
- Turkish Miles&Smiles.
- Virgin Atlantic Flying Club.
- Hawaiian Airlines HawaiianMiles.
- World of Hyatt.
You might find a landlord or perhaps a bank prepared to accept a debit card for payment with no additional fee on rare occasions.
The Durbin Amendment, passed in 2010, reduced debit card interchange fees, making it a more acceptable form of payment.
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5 Ways To Pay Rent With A Credit Card
Fortunately, there are many more possibilities for paying rent using a credit card than there are for paying your mortgage.
Keep in mind, though, that this will require a few extra steps.
There's a low chance you'll be able to pay your landlord directly with a credit card when it comes to paying your rent.
Most landlords, however, would not accept credit cards as a form of payment due to the fees. If they do, you're in good shape.
If not, it's time to start looking for something different.
So, if you really want to pay your rent using a credit card, you'll almost certainly have to enlist the help of a third party. Five payment platforms are listed below for your consideration.
Remember that these alternatives are only for rent payments and may not apply to other debts such as mortgages, bills, and other obligations.
| Company | Fees |
|---|---|
| Plastiq | 2.5% |
| Radpad | Credit Card: 2.99% Debit Card: $4.95 |
| RentMoola | 2.99%-3.99% |
| Venmo | Credit Card: 3.0% Debit or Prepaid: Free |
| PayPal | 2.9% + $.30 |
1. Plastiq
Plastiq is a third-party payment service that lets you pay your rent with a credit card. Plastiq normally charges a flat cost of 2.5 percent on each transaction, while they occasionally run specials when their rates are reduced.
So, if you're looking for a way to boost your credit card benefits, Plastiq is only useful if you're looking for a signup bonus.
While this platform places restrictions on which cards you can use to pay your mortgage, those restrictions are eliminated when it comes to paying rent using a credit card.
You can pay with Visa, Mastercard, American Express, and other credit cards.
After you've completed your transaction, you can pay your landlord with a check or an ACH transfer.
2. Radpad
Another simple option for paying rent with a credit card is Radpad. In fact, it's the only way you can pay with Radpad!
Unlike some of the other choices, getting money does not require your landlord's approval. When paying with a credit card, the company charges a 2.99% fee.
It charges $4.95 to use a debit card for payments under $5,000 and $9.95 to use a debit card for payments beyond $5,000.
ACH payments are completely free. Remember, though, that using a debit card or an ACH transfer will not earn you points!
All major credit cards, including Visa, Mastercard, American Express, Discover, and Apple Pay, are accepted.
3. RentMoola
You can pay your rent using a credit card through RentMoola for a cost of 2.99 percent to 3.99 percent, depending on the card.
You'll earn MoolaPerks in addition to credit card rewards, which give you discounts on items like travel and shopping.
RentMoola offers Visa, Mastercard, American Express, Paypal, and eCheck as forms of payment.
RentMoola does, however, require your landlord's approval before paying your rent with a credit card.
4. Venmo
If your landlord has a Venmo account, it's a simple method to pay rent using a credit card.
Simply log into your account, locate the person you desire to pay, and click the "Pay Now" option.
All major credit cards, including Visa, Mastercard, Discover, and American Express, are accepted.
Paying with a credit card incurs a 3.0% fee; however, paying with a debit or prepaid card is free.
5. PayPal
If your landlord has a Paypal account, he or she may be willing to accept payments through it. You're in luck because Paypal accepts credit cards.
Of course, there is a charge for using a credit card. This is normally 2.9 percent of the transaction + $.30 in the United States. Credit cards of all major denominations are accepted.
Steps To Pay Rent with a Credit Card
Let's look at how to pay rent with a credit card the right way now that we've discussed the various payment methods accessible and which cards to consider.
The steps to take are as follows:
- Pick your card — Choose a rewards card that offers a great signup bonus.
- Select your payment option — Use the list of payment options above to find the third-party payment system that’s best for you.
- Contact your landlord — If needed, contact your landlord and inform them of your plans.
- Pay your rent — A few weeks before your payment is due, use your third-party account to pay your rent – especially if you choose a "pay by check" option. Depending on the provider, you may be able to set up automatic payments.
- Pay off your card — It is extremely important to pay off your credit card every month! Not doing so could completely wipe out the benefits you may earn and could send you thousands of dollars into debt.
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When to Pay Rent with a Credit Card
You're just kicking the can down the road if you try to pay your rent with a credit card because you don't have the cash. This isn't going to turn out well, believe me. If this describes you, I feel compelled to urge you: DON'T DO IT!!!
Seriously. This is a potentially deadly game that should only be played in specific situations. Take this as a warning.
So, what are the "ideal" conditions? Is paying your rent or mortgage using a credit card ever a good idea? I'm grateful you asked.
The following three conditions must be met in order for paying your rent with a credit card to make sense:
1. You want to earn additional points and miles
The only reason you should pay your rent using a credit card, in my opinion, is to receive additional credit card benefits.
I mean, isn't that what it's all about? Rent or mortgage payments are large-ticket items that could earn you a lot of points!
While a cash back card isn't usually worth it, cards with travel benefits (and unlimited earning potential on purchases) can be.
We've traveled the world for pennies on the dollar using points and miles. You can, too, if you do things correctly.
To be more explicit, unless you can avoid paying a fee, the main reason you should try to pay your rent using a credit card is to obtain a signup bonus.
Many of the greatest rewards cards provide massive incentives if you achieve certain spending criteria.
The best method to take advantage of these tremendous point hauls is to pay your rent or mortgage using a credit card.
Here's how it works: Assume you're aiming for a $750 welcome bonus in the form of free travel or gift cards.
If you pay your rent with a credit card through Plastiq, you'll be charged a 2.5 percent transaction fee. So, if you charge $3,000 in rent, you've paid $75 in fees in exchange for $750 in free goods.
That means you've made a $675 profit. Isn't it amazing?
Its however, important to keep in mind that caution is to be considered when doing such.
2. You can pay off your card immediately with cash
As I have mentioned, paying rent with a credit card is a highly risky game.
Only if you pay it off in cash right away will this work in your favor.
If you don't, you'll end up paying a service fee, credit card interest, and — in the case of a mortgage - loan interest.
As a result, it's critical that you understand how to make a budget and keep to it on a regular basis.
If you're looking for a signup bonus, this method makes the most sense — unless you can avoid paying a charge to a third party.
3. You have no consumer debt
If you don't have any consumer debt, this is the only method you should try it. Zero. Zilch. None.
That means you won't have any credit card debt. There are no car payments. There is no furniture that has been financed. Nada.
To get out of debt, start with the debt snowball strategy. Then you can focus on earning additional travel rewards afterwards.
Who Should Avoid Paying Rent with a Credit Card?
People in the below conditions should avoid paying rent with a credit card.
- You don’t have the cash to pay your rent.
- You have a history of struggling with credit card debt.
- You are not attempting to earn a signup bonus on a rewards card.
- You have trouble sticking to a budget.
- You feel the least bit uncomfortable doing this.
Final Thoughts
Unless you're one of the lucky few who can pay your rent or mortgage without incurring any costs, you'll want to consider whether utilizing a third-party payment provider makes sense given the additional fees you'll incur if you use a credit card.
The Bilt Mastercard is another new choice, but it's vital to do the math to determine if it makes sense.
If you have a rewards-earning debit card, I'd check to see if Venmo payments are eligible for your rewards program and ask your landlord to accept Venmo payments.
Otherwise, you should only pay your rent or mortgage with a credit card that levies a fee as a last choice (if it makes financial sense) to fulfill the minimum spending requirements and earn a shiny new sign-up bonus or welcome offer.
Frequently Asked Questions
Can you pay rent with a credit card?
Yes. Although many landlords prefer checks, there are a variety of credit card payment options that landlords may accept. Keep in mind that your landlord may demand you to cover the cost of credit card processing.
Is it smart to pay rent with a credit card?
That depends on why you're doing it in the first place. If you can't afford to pay your rent in cash, avoid paying it with a credit card. If you have the cash to pay off your card and want to earn more points and miles, it can be worth it. Simply make sure that a) the points you earn are greater than the fees you pay to use a card, and b) you pay your account in full every month.
Can I earn miles by paying rent with a credit card?
Yes. The primary motivation for using a credit card to pay rent is to earn points and miles. Remember that you may end up paying more in fees than you gain in value. As a result, it's recommended to utilize this method sparingly, such as when looking for a welcome bonus.
References:
https://thepointsguy.com/guide/paying-rent-credit-card/
https://clubthrifty.com/pay-rent-with-credit-card/