Paying Rent with a Credit Card: Weighing the Pros and Cons

If you’re among the 45 million American households renting their homes, your monthly rent is likely one of your largest expenses. Have you ever wondered if you could pay rent with a credit card? While it’s possible, it’s not always the most straightforward or cost-effective option. Paying rent with a credit card could offer benefits like earning rewards or gaining extra time to cover the bill, but it also comes with potential drawbacks like hefty fees and financial risks. Below, we explore the different ways to pay rent with a credit card, the associated costs, and what you need to consider before making this decision.

Directly Through Your Landlord

Some landlords or rental companies make it easy to pay rent with a credit card by offering an online portal or using tools like Square. However, this convenience often comes at a cost. Landlords may pass processing fees onto tenants, which can range from 2.6% to 3.5% of the rent payment. For example, paying rent through Square could cost you an additional $52 to $70 on a $2,000 monthly rent payment. Similarly, platforms like PayPal or Venmo charge fees of at least 2.99% or 3%, respectively, for credit card transactions.

While paying rent directly through your landlord’s portal may count as a "purchase" for credit card rewards and 0% introductory APR offers, the high fees often outweigh the benefits of earning points or cash back. However, if you’re working toward a minimum spending requirement for a welcome bonus, paying rent with a credit card might make sense. Before proceeding, call your credit card issuer to confirm that rent payments qualify for rewards.

Using a Third-Party Payment Service

If your landlord doesn’t accept credit card payments directly, you can use third-party services like Plastiq to pay rent with a credit card. These platforms allow you to enter your landlord’s payment information and charge your credit card for the transaction. Unfortunately, these services come with significant fees—Plastiq charges 2.9% per transaction, which could add $58 to a $2,000 rent payment. While Plastiq payments may earn credit card rewards and help you meet minimum spending requirements, the company has faced financial instability, including a Chapter 11 bankruptcy filing in 2023.

Paying Rent on a Landlord Management Platform

Some apps and websites, like DoorLoop or TurboTenant, enable tenants to pay rent with a credit card while assisting landlords with managing their rental properties. However, these platforms typically charge renters a processing fee of around 3.25% to 3.49%. For a $2,000 rent payment, this could add $65 to $70 in fees each month, which often negates the benefits of earning rewards on most credit cards. Landlords may also be reluctant to use these platforms, so getting them on board could be a hurdle.

Consider a Specialty Credit Card for Rent Payments

For those interested in earning rewards on rent payments without incurring extra fees, the Bilt Mastercard is a unique option. This card allows you to pay rent with no transaction fees, provided your landlord accepts ACH payments or checks. The Bilt Mastercard offers 1X Bilt Points on rent payments (up to 100,000 points per year), 2X points on travel, and 3X points on dining. You can redeem these points for travel, merchandise, or even a future home down payment.

To use the Bilt Mastercard for rent, you can provide your landlord with a virtual account number to process the payment like a bank transfer. Alternatively, you can opt to have Bilt mail a check directly to your landlord or use the BiltProtect feature to pay your rent without impacting your available credit. This card has no annual fee and requires at least five purchases per statement period to earn rewards.

What to Know Before Using a Credit Card for Rent

Paying rent with a credit card can be convenient, especially in emergencies when you need extra time to cover the bill. However, it’s essential to approach this decision carefully. Credit card rewards, such as 2% cash back, are often overshadowed by high processing fees. For example, a 3% fee on a $2,000 rent payment adds up to $720 annually, far exceeding the value of any rewards you might earn.

Additionally, putting rent on a credit card can impact your finances in other ways. A high credit utilization ratio (the percentage of available credit being used) can hurt your credit score, especially if you’re charging large expenses like rent. If you’re unable to pay the balance in full by the due date, interest charges can pile up quickly, with average credit card APRs around 20%. For those looking to build credit, services like Experian Boost allow you to report rent payments directly to the credit bureau without putting the payment on your credit card.

In conclusion, while paying rent with a credit card offers convenience and potential rewards, it’s crucial to weigh the pros and cons. For most people, the high fees and financial risks outweigh the benefits, making traditional payment methods like checks or ACH transfers the safer and more cost-effective choice. However, if you’re strategic about earning rewards or need temporary financial flexibility, a credit card could be a viable option—as long as you pay the balance in full and avoid unnecessary fees.