There are a few different products and services out there that facilitate paying rent with a credit card, allowing you to earn oodles of points or cash back along the way. But before you throw your checks in the recycling bin you should carefully consider the processing fees you might incur in order to pay rent on credit, as well as the influence that this major recurring purchase will have on your credit score.

There are plenty of reasons why you may consider paying rent — one of your biggest monthly expenses — with a credit card.

You could earn points or cash back if you pay with a rewards credit card. Perhaps you might be working toward meeting the minimum spending requirement for a big welcome bonus? Or you may not be able to afford this month’s rent, and putting it on credit can buy you some more time.

Whatever the reason may be, I’ll walk you through how to pay rent with a credit card. I’ll also go over the major considerations to help you decide whether or not it’s a good idea to do so.

How Do You Pay Rent with a Credit Card?

Whether you’re renting an apartment, condo, or a single-family home, you’ll first need to check if your leasing agency or landlord accepts credit cards as a form of payment.

Property managers who use online portals make it clear for renters whether or not credit cards are allowed.

If you can pay with a credit card, there may be a processing fee. While that fee may seem relatively low, it can still add up considerably if your rent costs you thousands of dollars every month.

Otherwise, some rental properties may not accept credit cards at all. You may be restricted to paying rent with a debit card; online checking account; or with an old-school, written check instead.

Despite this, you can still pay rent with a credit card with the help of other tools.

Bilt Rewards Mastercard

The Bilt Rewards Mastercard is a no-annual-fee credit card that is specifically designed to earn points on your rent — and with no processing fees.

There are more than two million rental properties nationwide in the Bilt Rewards Alliance, allowing you to pay your rent and earn points entirely through the Bilt app.

But for renters who cannot pay with a credit card or want to avoid processing fees, Bilt will write a rent check (on behalf of you) directly to your property manager. This means that virtually anyone can earn points on rent by carrying the Bilt Rewards Mastercard.

Bilt comes with a number of other perks aside from allowing you to pay rent with no fees. Highlights include 3x points on dining, 2x points on travel, 1x points on everything else (including rent payments), cell phone protection, and more.

Plastiq

If applying for another credit card is out of the question for you, Plastiq is a third-party payment platform that can serve as a good alternative to the Bilt card.

Through this service, you can pay rent and other expenses where a credit card may not traditionally be accepted. Similarly to Bilt, Plastiq will then deliver a check or an electronic payment directly to your landlord.

There is a processing fee of 2.85%, so you should probably only use Plastiq if you’re trying to meet the spending requirement for a huge sign-up bonus, or if you absolutely need the extra payment flexibility that comes with a credit card.

It’s also worth noting that Plastiq charges the lowest processing fee compared to other competing services, such as RadPad or PlacePay.

Best Credit Cards for Paying Rent

The Bilt Rewards Mastercard mentioned above is an innovative product that was specifically intended for earning rewards on rent. It’s a great pick for renters who want to avoid processing fees or have a landlord that may not accept credit cards in the first place.

But if you’re a lucky renter that is allowed to use a credit card with no additional processing fees charged, you may want to compare the Bilt Rewards Mastercard to other valuable cards on the market. I’ve selected the best credit cards for paying rent based on the introductory bonus, ongoing rewards, and other benefits they offer.

 Bilt Rewards MastercardChase Freedom Unlimited®Capital One Venture Rewards Credit Card
Credit requiredGood to excellentGood to excellentGood to excellent
Annual fee$0$0$95
Intro APRN/A0% intro APR on purchases and balance transfers for 15 monthsN/A
Regular APR16.49% – 24.49% variable APR18.74% - 27.49% Variable variable APR18.99% - 26.99% (Variable)
Sign-up bonusN/AEarn an additional 1.5% cash back on everything you buy (on up to $20,000 in the first year) – worth up to $300 cash back.Earn 75,000 bonus miles once you spend $4,000 on purchases within the first three months from account opening
Rewards3x points on dining; 2x points on travel; 1x points on rent, and all other purchases.5% cash back on travel booked through Chase Ultimate Rewards; 3% on dining and drugstore purchases; unlimited 1.5% cash back on all other purchases.5x miles on hotels and rental cars booked through the Capital One Travel portal and 2x miles on all other purchases.
Perks and benefitsExtended Warranty, Trip Cancellation and Interruption Insurance, Cell Phone Coverage, and more.Trip Cancellation and Interruption Insurance, no foreign transaction fees, etc.Two free visits to the Capital One Lounge annually, Extended Warranty, Travel Accident Insurance, etc.

Benefits of Paying Rent with a Credit Card

Paying Rent with a Credit Card Can Help You Earn a Sign-up Bonus

Surprisingly enough, incurring a credit card processing fee on rent can actually make sense at times. Paying a huge expense like rent can help you quickly reach the required spending amount needed to earn a new credit card’s sign-up bonus, the value for which might exceed a processing fee.

For example, the Chase Sapphire Preferred Card offers 60,000 bonus points after you spend $4,000 in the first three months after opening your account. These points are worth at least $750 toward travel purchases.

The average one-bedroom apartment in the U.S. costs $1,129 per month in rent, according to data from Statista. In this case, the Plastiq processing fee will cost you $32.18. That pales in comparison to $750 in travel rewards.

Rent Payments Can Build Your Credit Score

There are five factors that affect your FICO credit score (percentages are approximate):

  • Payment history: 35%
  • Credit utilization: 30%
  • Length of credit history: 10%
  • Credit diversification: 10%
  • New credit: 10%

Payment history is one of the key components here. Essentially, a responsible payment history indicates to creditors that you can pay your bills on time.

By paying rent with your credit card and exercising consistent, timely payment habits, your payment history will improve and help gradually your increase credit score.

That said, while consistently making on-time rent payments can positively affect your payment history, it will simultaneously increase your credit utilization. (See ‘Drawbacks’ below).

Read more: How Credit Scores Work

Credit Cards Can Offer You Payment Flexibility

Credit cards typically offer a grace period before your payment is due. By charging your rent to your credit card, you’re afforded a bit more time than if you were to pay with a debit card or checking account.

However, it’s absolutely crucial that you pay off your entire bill within that grace period. Otherwise, you’ll be subject to costly credit card interest and late fees, and you might start to accumulate debt.

Drawbacks of Paying Rent with a Credit Card

Subject to High Processing Fees

If your credit card offers 1% cash back, and you use it to make a $1,129 rent payment every month, that adds up to $135.48 in accrued cash back by the end of the year. Sounds like a nice chunk of change, right?

But don’t forget about the processing fees you’ll likely have to pay to facilitate those credit card transactions. In the above scenario, Plastiq’s 2.85% processing fee works out to $386.12 in combined fees over the course of the year. That’s a loss of -$250.64 relative to the cash back you would earn.

Other credit cards may offer more cash back, or rewards points with a higher value depending on how they’re redeemed. As a general rule of thumb, you’ll always want to weigh the value of the rewards earned against the price you’ll pay with the processing fee.

Increased Credit Utilization

Paying rent with a credit card is a double-edged sword when it comes to your credit score.

Remember, credit utilization — or the ratio of your debt to your total available credit — makes up a massive 30% of your FICO credit score. And making a huge rent payment each month can cause your credit utilization to climb precipitously.

Let’s say that you have two credit cards; one with a $1,000 limit and another with a $2,000 limit. In total, you have $3,000 of credit available to you.

By paying the $1,129 rent on a credit card, you’re using about 38% of your total credit limit — which isn’t ideal. In general, you’ll want to keep that credit utilization rate as low as possible — preferably below 30%.

Risk of Taking on Debt

When you’re short on dough, paying rent with a credit card might seem like the perfect temporary solution to buy more time until your cash flow situation improves. But this should be a one-off last resort, not a repeat offense. And you’ll need a plan to pay the card balance off as quickly as possible.

If your credit card’s interest rate is 15%, and you make only the minimum payment on your $1,129 rent charge, it will take you around five years to pay the charge off and you’ll fork over $500+ in interest during that time. That’s a trap you don’t want to fall into.

If you find that you’re routinely short on cash, rather than charging your rent to a credit card it might instead be time to either:

  1. Consider downsizing to cheaper living conditions, or;
  2. Modify your budget to properly accommodate your rental expenses each month.

Read more: How Much of Your Income Should You Spend on Rent?

Summary

Paying rent with a credit card has gotten easier in recent years thanks to products like the Bilt Mastercard or services like Plastiq. 

As with any credit card purchase, paying rent with a credit card can be a smart decision if you’re: A. Committed to paying off your card statement on time and in full, and B. Earning more rewards/cash back than you’re paying in processing fees. 

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