Are you wondering, “can you pay rent with a credit card?” Well, precisely you can, but you will need to pay a fee. Therefore, you need to make sure that the convenience you are paying is worthy of the probable cost to your wallet or the credit score.
There are advantages to paying your rent with your credit card. If you are just starting off, you do not need to go through the entire trouble of writing a check and waiting for its cashing.
Also, it offers a lot of flexibility. If you have your rent due just before your payday, you may cover the expense with your credit card and pay it back when you get your paycheck. This will help you dodge the entire process of avoiding the whole awkward conversation with your landlord about late fee payments.
If, in case, your landlord does not take credit card payments, you still have other options. There are certain rent payment services that facilitate credit cards. But they charge a fee.
It is convenient, but it ends up costing more than what you would have to pay if you just paid with your checkbook.
If you are looking forward to knowing more about “Can you pay rent with a credit card?” stay with me till the end of the article as I discuss every detail you need to know about paying the rent with your credit card.
How Can You Pay Rent With A Credit Card?
There are many services that provide tenants with opportunities through which they can pay their rent online. While some would need to involve your landlord, others will not.
This platform will let your landlord with a credit card, and it will not require him to have an account. You just need to pay a fee to Plastiq, which equals to 2.9% of the payment each time you use the debit or the credit card. Payment may be done manually or scheduled automatically. Plastic will then deliver the check to your landlord or an electronic payment.
PlactPay, which was known as RentShare previously, needs the landlord to accept the direct deposits. It also charges a fee of 2.99% for each debit card or credit card payment. For each ACH payment, they charge a $1.95 fee. This is a payment that happens directly from your bank account. The platform will allow roommates to split the total rent and choose the payment method that suits them the best. You may also schedule automated payments or pay manually through the app for Android devices and iPhones.
The website of RentTrack notes that you may use its service
“without your landlord’s involvement. We mail them a paper check.”
It will charge you a 2.95% fee to pay with a credit card. For ACH payments, the fee is $6.95. The service also allows tenants to extend their credit portfolio when they pay rent through a credit card. RentTrack will report all of these payments to all of the three major credit bureaus – Experian, TransUnion, and Equifax. They will then record the information to calculate the credit scores. You need to ask your landlord if they report your rent payment to any of the credit bureaus before making this feature a deciding factor.
“When a landlord reports rent payments to a credit bureau, it is presented as a separate tradeline or account on your credit report, much like an auto loan or a credit card,”
as said by the president of consumer interactive at TransUnion John Danaher.
“Lenders will review that, along with your other payment information, to determine your riskiness as a borrower. They will look favorably on consumers who demonstrate they have responsibly managed credit in the past.”
Considering Factors Before Paying Rent With A Credit Card
While you may think paying rent with a credit card may just be a very convenient option, it actually is. However, there are the factors that you may have to consider before you choose this payment method.
Some of the rent payment services look for an opportunity to earn incentives to pay rent with credit card rewards. However, the cost of this processing fee may eliminate any reward you may earn. For instance, if your rent is $1,000 and you are paying a fee of 2.99%, this means you are paying an extra of $29.90 each month.
It is tempting to put your rent on your credit card if you wish to free up the money for anything else or if you are not able to afford it for that month. But you don’t need to do that every month. This will pile up the interest payments on your ongoing balance.
Effect On Your Credit Score
Your credit score may increase if you keep paying rent with your credit card. This will affect your credit score in the long run. The credit utilization ratio is a crucial factor that affects your credit score. You must aim at keeping it low under all circumstances.
Should I Pay Rent With Credit Card?
Credit cards may seem like handy options to pay rent in a rough situation, but they should be your last resort. If you are looking for a flexible way to pay rent without going through the whole trouble of writing checks, a credit card is the best available option. Plus, you will also earn rewards that will help you defray the convenience fees cost.
But, if you have a low credit limit or have an unstable income, putting the rent on your credit card is indeed risky. It may hurt your credit score and your wallet upon failing to pay the rent on time. Hence, you would have to measure the pros and cons and only then make the decision that suits you the best.
Frequently Asked Questions !!! [FAQs]:
Ans: The Bilt World Elite Mastercard is a great option that charges no fees and will also earn you $1 on each of your rent payments. They do not have any transaction fees either.
Ans: The fee that you may have to pay for paying rent with your credit card is between 1% and 2% of the transaction amount.
Ans: There are many benefits to why people try to make rent payments with their credit cards. The bigger reason behind it is the convenience and the lack of hassle that comes with checks or cash payments.
The Bottom Line
Now you know the answer to your question – “Can you pay rent with a credit card?” It is a convenient option, but you must first ensure that your landlord is allowing it.
Also, as convenient as it is, you must not make it a habit to pay rent with credit cards. That will affect your credit score, which is something you need to avoid. You would also have to pay a certain amount of fees per transaction. You may avoid it if you are paying in cash or check.
Therefore, if you are paying rent with your check, you need to keep these factors in mind and only then make the decision that suits you the best.
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