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These days, you can pay for pretty much anything with a credit card: your power bill, your car payment, airfare for your next international vacation. Heck, even the IRS accepts credit card payments.
So why can’t you pay your rent with a credit card?
You can, although there’s a fair chance you’ll need to do so through an intermediary unless your landlord is generous enough to eat the processing fee on each rent payment made by credit card. That intermediary will probably charge anywhere from 1.5% to 3% to issue a paper check or direct deposit to your landlord. Whether that surcharge is worthwhile depends on:
- Your motivation for paying your rent by credit card
- The intermediary you’re using (cheaper is not always better)
- Which credit card you plan to use
Read on to learn why you might want to pay your rent by credit card, when you should think twice about it, and how to get the best deal if and when you do.
Why Pay Rent With a Credit Card?
Most tenants who pay rent by credit card do so for one of these four reasons.
1. To Make Progress Toward an Early Spend Bonus
This is the most common reason tenants pay rent by credit card. It’s also, by far, the most cost-effective, offering the greatest likelihood of coming out ahead after accounting for processing fees.
For example, the Chase Sapphire Preferred Card’s sign-up bonus for new cardmembers is 60,000 Ultimate Rewards points. That’s worth up to $750 in eligible travel purchases made through Chase’s travel portal, and possibly more when transferred to partner travel loyalty programs. To earn that bonus, you must make $4,000 in eligible purchases within the first three months your account is open.
If your rent is $1,000 per month, three months’ rent gets you three-quarters of the way to the bonus requirement before you spend another dime. (You’ll need to initiate your third rent payment early to be sure it clears by the end of the bonus window.)
Even if your rent is only $500 per month – lucky you – three months is enough to get you more than one-third of the way to the bonus spend. And if you live in a pricey coastal city such as New York City, three months’ rent will easily get you over the sign-up bonus hurdle.
Processing fees will eat into your haul. For example, a 3% surcharge on a $1,000 rent payment is $30, or $90 for three months. But even so, assuming you redeem your entire Sapphire Preferred bonus for travel, you’ll net $660.
Beyond the typical sign-up bonus window of two to four months after account opening, some cards offer recurring opportunities to earn bonus points. These opportunities typically require hefty spending over a calendar year or cardmember anniversary year (the 12-month period beginning with the account opening date). For instance, you’ll earn a complimentary weekend night certificate at select Hilton properties when you make $15,000 in eligible purchases on your Hilton Honors American Express Surpass Card in any calendar year.
2. To Earn Ordinary Credit Card Rewards
If you have an unusually generous credit card, the ordinary rewards you earn on rent payments may outpace the processing fees. Credit cards that earn cash back at a flat 2% rate, such as Citi Double Cash, pay more than lower-cost rent processors take.
3. For Convenience
Your credit card may well be the most convenient way to pay rent. If you have a mobile wallet app or save your card number securely in your desktop or mobile browser, you can send a payment with a few taps – easier than sitting down to write a check or navigating a potentially cumbersome bank bill pay suite.
4. Your Bank Account Doesn’t Offer Paper Checks or Free Bill Pay
Maybe your bank’s bill pay suite is unreliable or nonexistent, or maybe your account type doesn’t offer paper checks or charges an arm and a leg for them. Sure, some landlords take cash, but if that’s your only other option, paying by credit card is by far the safer choice. If your cash is lost or stolen before it’s safely in your landlord’s hands, you have little recourse to recover it.
When to Think Twice About Paying Rent With a Credit Card
Paying rent with a credit card isn’t always wise. In the following situations, you may want to think twice about it.
1. You Can’t Afford to Pay Your Credit Card Bill in Full
If you’re already struggling to make rent, don’t add to your woes by charging it to your credit card. The amount will still come due, just at a slightly later date, and the long-term cost will be even higher thanks to compound interest.
Instead, tap reputable private or public resources to get help paying your rent. Should your financial situation deteriorate further, consider breaking your apartment lease and moving into less costly housing.
2. Processing Fees Completely Offset Earned Rewards
Unless you have an unusually generous credit card, you’re unlikely to do much better than break even on rent payments made by that card once you’ve unlocked the sign-up bonus. If your card’s effective return on regular spending is less than 1.5%, you’ll probably end up in the red after accounting for processing fees.
If you prize the convenience of paying rent by credit card, you may not mind the persistent out-of-pocket cost. However, if your primary goal is to earn more in credit card rewards than you spend in processing fees, you’ll need to crunch the numbers carefully. Bear in mind that credit card rewards’ redemption value is often dependent on your redemption method – for instance, Ultimate Rewards points earned on purchases made with the Chase Sapphire Reserve Card are worth $0.01 apiece when redeemed for cash, $0.015 apiece when redeemed for travel, and potentially upwards of $0.02 apiece when transferred to an airline partner and redeemed for long-haul airfare.
3. You Have a Cheaper Bill Pay Option
At this point, most banks and credit unions offer free bill pay. In other words, they’ll cut and mail checks to virtually any company or person with a U.S. address, free of charge. Even if your account doesn’t come with free personal checks, you can almost certainly use its bill pay suite to make rent – unless your property owner or management company belongs to the small but growing group of landlords averse to paper check payments.
4. The Payment Spikes Your Credit Utilization Ratio
If you have just one or two low-limit credit cards, even a modest rent payment could spike your credit utilization ratio – the amount you owe on your active credit card accounts divided by your total credit limit across all accounts – and lower your credit score. You’ll compound the damage if you fail to pay off your balance in full and then charge the following month’s rent.
Generally, you should keep your credit utilization ratio below 30%.
5. You Typically Wait Until the Last Minute to Pay Rent
Some intermediaries take up to a week to process credit card payments. Delays are more likely when tenants, landlords, or both prefer payment via paper check, due to the time required to physically cut and deliver a check. Depending on the intermediary and the payment processing policies of your landlord’s bank, direct deposit payments may take up to three business days to settle. If you’re in the habit of waiting until the last minute to pay rent, long processing delays may lead to unanticipated late fees.
How to Pay Rent by Credit Card
You can use any of the following services to pay rent by credit card. Bear in mind that some of these services require landlord approval. If you’re not sure whether your landlord is OK with credit card payments, ask them in advance or choose a service that doesn’t directly involve landlords, such as RadPad.
Plastiq charges a flat 2.5% transaction fee for all credit cards. The transaction fee for debit cards is 1%. Your landlord can choose from check, wire transfer, or ACH transfer payments, and you’ll be notified once payment clears. Electronic transfers take no more than three business days to settle.
Recipients don’t need Plastiq accounts to receive payment, so you may not need to notify your landlord that you’re using the service – though you will need to get their bank account details if they prefer electronic transfers. However, Plastiq’s payment tracking suite and custom payments pages make a compelling argument for landlords to set up their own accounts.
PayPal Checkout has built-in credit card processing capabilities. PayPal charges 2.9% plus $0.30 per transaction, making it one of the costlier options on this list. Its main advantage is near-instantaneous settlement – a boon for last-minute payers.
Landlords must set up their own PayPal Checkout accounts to accept credit card payments. You’re free to suggest to your landlord that they do this, but realistically, small-time property owners without websites of their own are unlikely to take the leap.
Venmo is a peer-to-peer money transfer app that lets users send funds from linked bank accounts, debit cards, and credit cards. It’s free to send money from a bank account or debit card, but credit card transfers cost 3% of the transaction amount. The recipient must have a Venmo account to accept credit card payments, but otherwise, there’s no friction; you don’t need to notify your Venmo-toting landlord that you plan to pay by credit card rather than bank transfer.
RentMoola is a property management portal with a built-in rent payment processing system. Credit card transactions cost 2.99% to process. Landlords are in control here; you’ll likely use a link sent by your landlord to set up your account or make a one-time QuickPay payment without setting up an account. There’s a clear benefit to setting up your own account, though: instant access to MoolaPerks, an in-house repository of exclusive discounts and deals at hundreds of partner vendors.
RadPad lets you schedule credit card rent payments in advance, reducing your risk of missing a payment due date. For a 2.99% processing fee, RadPad converts card payments into checks, which mail out three days before the rent is due. RadPad’s 100% Rent Guarantee means all payments are guaranteed to arrive on time; RentPad absorbs the risk of unanticipated mailing delays and other potential hiccups. Renters receive real-time notifications throughout the process.
Urbanr is the cheapest entrant on this list. As a tenant, the highest credit card processing fee you’ll pay on this platform is 1.5%, and the “Go Dutch” option lets friendly landlords split the fee with their renters. Payments are direct-deposited, reducing the likelihood of payment delays, but Urbanr doesn’t guarantee on-time delivery. It’s up to you to make sure you initiate payment on time – at least five days before your payment due date.
RentTrack stands out for its focus on credit-building; unlike the other entrants on this list, RentTrack makes a point of reporting timely rent payments to the three major consumer credit reporting bureaus. That’s great news for tenants looking to build or improve their credit. The catch: Your landlord must have a RentTrack account and approve your payment choice.
RentTrack’s renter-friendly reporting policy comes at a cost: $9.95 per month for renters who don’t pay their rent through RentTrack. This fee is waived for renters who do pay rent through RentTrack. If you use a credit card to pay rent through RentTrack, expect to pay a 2.95% processing fee.
Best Credit Cards for Paying Your Rent
You’ll come out ahead when you use any of the entrants on our best sign-up bonus credit cards list to pay rent – until you clear the early spend threshold, that is. But the following cards, in particular, give you a solid chance to earn a respectable return on rent spending.
The examples for each card assume that you can clear each card’s early spend hurdle through a combination of rent and non-rent spending, that your monthly rent is $1,000, and that you’re using Venmo, the most expensive processing option mentioned above – meaning your total rent processing fees will be $90 over three months.
These calculations don’t account for annual fees, which may be offset by rewards earned on everyday spending (including rent payments) and valuable perks, such as Chase Sapphire Reserve’s $300 annual travel credit.
1. Chase Sapphire Preferred Card
Chase Sapphire Preferred’s sign-up bonus is worth up to $750 when redeemed for travel, and the card earns 1 point per $1 spent on everyday purchases, including rent. At the per-point travel redemption value of $0.0125, the net gain after the sign-up bonus, ordinary rewards earned, and payment processing fees is $697.50 ($750 + $37.50 rewards – $90 fees).
2. Chase Sapphire Reserve Card
Chase Sapphire Reserve’s sign-up bonus is also worth $750 when redeemed for travel. However, because Ultimate Rewards points earned through Sapphire Reserve are worth $0.015, this value requires 10,000 fewer bonus points than if you were using Sapphire Preferred. At the per-point travel redemption value of $0.015, the net gain after the sign-up bonus, ordinary rewards earned (1 point per $1 spent on everyday purchases, including rent), and payment processing fees is $705 ($750 + $45 rewards – $90 fees).
3. Capital One Venture Rewards Credit Card
The Capital One Venture Rewards Credit Card’s early spend bonus is worth 50,000 points on $3,000 in eligible purchases within the first three months – enough to earn through rent payments alone if your monthly rent is $1,000. And Venture Rewards earns unlimited 2 miles per $1 spent on eligible purchases, including rent. At the per-point travel redemption value of $0.01, that makes the sign-up bonus worth $500, and the net gain on three months’ rent spending is $470 ($500 + $60 rewards – $90 fees).
Keep in mind that all of your carefully considered cost-benefit analysis goes out the window the moment your credit card issuer codes your rent payment as a cash transaction rather than a purchase. Cash and cash-like transactions, such as gift card and casino chip purchases, rarely earn credit card rewards. If your issuer lumps rent payments in with these other transaction types, you’ll have no way to offset the processing fee, and you’ll face an effective rent hike of anywhere from 1.5% to 3%.
Before you make your first rent payment by credit card, pore through your cardholder agreement or contact your issuer to confirm that they will treat the transaction as a normal purchase. If they’ll treat it as a cash transaction, you may want to consider applying for another credit card.
Have you ever paid rent with a credit card? Would you recommend it? Why or why not?
Editorial Note: The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author's alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.