If you live in an apartment or don’t own your home, paying rent is a regular activity.
It’s not something that anyone likes to do, but it’s required if you want to keep a roof over your head.
Depending on your landlord, paying rent can be easily done using an online portal.
Other landlords make it more difficult, demanding a physical check or making you jump through hoops to submit payment.
You may be wondering if it’s possible to pay your rent with a credit card and if it is if it might be easier.
If you must pay your rent with a credit card, there are some services that let you do so, even if your landlord doesn’t usually accept credit cards.
Companies That Accept Credit Cards for Rent
|Company||Credit card convenience fee|
Which companies will work for you will vary with how your landlord accepts payment.
For example, a service like Venmo will only work if your landlord accepts electronic payments. Plastiq is good if your landlord wants to deposit a physical check.
Credit card rewards
You might wonder whether paying your rent with a credit card could be worth it if you’re looking to earn credit card rewards.
With credit card rewards giving you the chance to travel for free or get cash deposited to your bank account, putting a large expense like rent on your card would be a great way to accelerate your rewards earning, right?
This is not worth it.
You have to consider the cost that you pay for the rewards points.
Most credit cards offer 2% or less in value for purchases outside of specific categories. Even on cards that offer additional rewards for category spending, you won’t find a card that pays significant rewards on rent payments.
The fees charged by services that let you pay rent by credit card are almost never below the rates offered by the best cash back cards.
Outside of specific promotions, which are usually very limited, you’ll always wind up paying more than you get in rewards. That makes using credit cards to pay rent in search of rewards a self-defeating action.
There is one, uncommon, situation in which paying your rent with a credit card could plausibly be worth it: earning a credit card sign-up bonus.
Many credit cards offer large bonuses for spending a specific amount of money in the first few months that you have the card.
For example, you might be offered a $200 bonus when you spend $1,000 in the first three months you have a credit card.
Knocking out one of these bonus requirements in a single rent payment is easy, but it isn’t free.
If you could have used the card enough to meet the spending requirement without paying rent with it, you would have made more money.
In some situations, one-time rent payments to earn sign up bonuses can be worth it.
You should avoid doing this unless you’re completely sure you won’t meet the spending requirement.
We Don’t Advise Paying Rent with a Credit Card
Simply put, it's not wise for someone to pay their rent with a credit card.
Credit cards can be incredibly useful financial tools.
They let you make large purchases without having to carry around a lot of cash, and the offer some flexibility when it comes to paying for your purchases.
While you should always pay them off at the end of each statement to avoid interest charges, having that extra week or two to pay can be helpful.
They also provide a number of consumer protections, giving your extended warranties on expensive good and fraud protection against malicious actors. Many credit cards even offer rewards in the form of travel points or cash back.
Unfortunately, these benefits don’t come free.
Why there's a fee to process credit card rent payments
Even if you don’t see the cost of using a credit card, merchants do.
Whenever you swipe your card at a grocery store, restaurant, or anywhere else, the merchant pays a fee to accept your payment. Usually, these fees are a small flat amount plus a percentage of the transaction.
What that means is that when you buy $100 worth of groceries, the store might only receive $97. The other $3 go towards companies like Visa and MasterCard that operate credit card payment networks.
When you get into large dollar amounts, which rent payments usually are, a small percentage of your rent payment is a lot of money.
If you pay $1,500 in rent each month, 3% of that amount would be $45.
Landlords don’t want to give up that amount of money every month, so any landlord (or card processing company) that accepts credit card payments will tack on a credit card payment fee.
You don’t want to pay more for rent if you don’t have to.
What makes paying rent with a credit card even more dangerous is the possibility of carrying a balance. If you don’t pay your card off in full, you’ll have to pay interest on the balance you carry over.
With a balance from a large rent payment, the interest charge will be significant. You could set yourself up to enter a debt spiral that is difficult to escape.
For Emergencies Only
In the end, the real benefit of services that let you pay your rent by credit card is that they can help you out in an emergency situation.
Let’s face it:
If you need to borrow money to make rent at the end of the month, you’re in a dire financial situation.
Whether it’s from some unlucky circumstances that depleted your savings or something else, paying rent with a credit card is a sign of financial distress.
If you find yourself temporarily short on money, paying your rent with a credit card can help you get through the trouble while keeping a roof over your head.
If you carry a balance on the card, you’ll pay a lot of interest, but you won’t lose your apartment.
Having these services available as a last resort can give you a bit of a safety net should you truly need it.
Build an emergency fund
Ideally, you won’t ever find yourself in a financial situation where you’ll have trouble making rent at the end of the month.
The best way to avoid the need to pay rent with a card is to make sure that you always have some extra money available.
You should do your best to build and maintain some form of an emergency fund.
An emergency fund is a stash of extra money that you keep available, but don’t use unless you absolutely have to. That means that it should be kept separate from other stockpiles of cash, such as savings towards a new car or a vacation.
One of the best places to keep an emergency fund is in an online savings account. They pay good rates of interest and help keep the money out of sight and out of mind unless you need it.
How large your emergency fund should be varies based on many factors.
You should consider factors including the stability of your job and income, whether you have any dependents, and how much of a social safety net is available to you.
Ideal Size of an Emergency Fund
|To start...||Ideal goal...||Super safe...|
|$1,000||3-6 months of essential expenses||12 months of expenses|
Most people base their emergency fund off of their monthly expenses.
A common rule of thumb is to keep between 3 and 6 months’ expenses in your emergency fund.
This amount will be enough to handle nearly any unexpected expense that might pop up, such as a medical bill or a car repair. It will also be enough to help you weather a period of joblessness.
Making monthly automatic transfers from your checking account is the best way to start building an emergency fund. Once you’ve built one, leave it as it is. If you ever use the money in it, do your best to replace it as quickly as you can.
Knowing that you have extra money available to help you deal with emergencies can help with your peace of mind. It also helps you avoid expensive debt or fees from paying your rent with a credit card.
Ultimately, there’s little to no reason you should ever pay your rent using a credit card, outside of dire emergencies.
If you find yourself needing to use a credit card to make rent, you should take the time to look at your finances and find something to change.
Whether that be reducing your expenses, finding a cheaper apartment, or increasing your income somehow, using your credit card to pay rent is expensive and won’t be sustainable.