While it may sound like a total coup to be able to pay your rent by credit card and rack up points, most landlords won’t accept rent payments by credit card because of the roughly 3% (or more) in processing fees they’d have to pay.
Furthermore, accepting payments by credit card subjects the landlord to the possibility of chargebacks (i.e. disputes). Why would a rational landlord give their tenant the opportunity to dispute their rent payment? If the tenant didn’t feel like paying rent this month for whatever reason, should they be able to subject their landlord to a lengthy, onerous and potentially expensive dispute process?
Just remember, there is no free lunch. The credit card points you receive are a partial rebate of the transaction fees that merchants have to pay. As a result, it’s no surprise that most landlords will require you to pay rent by check, cash, ACH, Zelle, Venmo or some other method that doesn’t involve a per transaction processing fee.
How to pay rent by credit card
While most landlords won’t accept rent payments by credit card for the aforementioned reasons, some landlords might use a service that allows credit card payments such as ClickPay (which many condo & co-op buildings might use for maintenance or common charge payments).
However, there still is and never will be any free lunch. You will be asked to pay the full processing fee (~3% usually) on these systems if you decide to pay via credit card vs linking your bank account (which is typically free).
Unless your landlord already utilizes a system that accepts a variety of payment methods, then it’ll be extremely unlikely that you will be able to force your landlord to accept credit cards.
How to get your landlord to accept credit card payments
This is not recommended, especially if it’s not something your landlord has mentioned being open to. Unless you live in an ultra tenant-friendly jurisdiction like NYC or LA where landlords have few rights, it’s best not to make life more difficult for the person who will be deciding how much to increase your rent.
Just remember, while it’s nice for you to be able to rack up credit card points, those points are rebated directly from the ~3% processing fee that your landlord would then have to pay. Furthermore, your landlord has to then worry about you disputing rent payments if you’re not happy.
So instead of trying to figure out a way to force your landlord to take a 3% haircut in rent so you can get 1% in credit card points, you could instead ask whether they’d be open to a service like apartments.com (free ACH rent payments), Zelle or Venmo, none of which charge either side any fees.
Pro Tip: Having issues with your security deposit? Laws around security deposits (i.e. how much they can be, process of getting them back etc.) can be quite strict in places like NYC, and even Miami-Dade County in Florida. Learn more about how to get your security deposit back in our guide.
One of the main advantages of being able to pay rent by credit card is the flexibility it provides. Credit cards allow you to make payments over time, which can be useful if you have a temporary cash flow issue and need some extra time to pay your rent. It can also be helpful if you’re waiting on a paycheck or expecting a large sum of money to arrive later in the month. With a credit card, you can pay your rent on time and avoid any late fees or penalties.
Another benefit of paying rent by credit card is that it can help you build credit. When you use your credit card to pay rent and make timely payments, it shows that you are responsible with your finances and can help improve your credit score. This can be particularly useful if you are looking to apply for a loan or credit in the future, as a higher credit score can make you more attractive to lenders.
Paying rent by credit card can also offer you rewards and perks that you wouldn’t get if you were paying by check or cash.
Many credit cards offer cashback, points, or other rewards for purchases, including rent payments. This means that you could earn rewards for paying your rent, which can add up over time and help you save money or get additional benefits.
Finally, paying rent by credit card can be convenient and easy. You can set up automatic payments so that your rent is paid each month without you having to remember to make a payment manually. This can save you time and hassle and ensure that you never miss a payment. Additionally, you can often view your rent payment history and track your expenses through your credit card account, making it easier to manage your finances.
Pro Tip: With mortgage rates nearly double what they were at the lows, does it still make sense to buy? Learn more about the pros and cons of renting vs buying in our guide.
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While paying rent by credit card may have its benefits, there are also some potential drawbacks to consider. One of the main disadvantages is the cost. Many landlords charge a processing fee when tenants pay rent by credit card. This fee can range from a flat rate to a percentage of the rent amount, which can add up over time and make paying rent by credit card more expensive than paying by check or cash.
Another downside of paying rent by credit card is the risk of debt. When you use a credit card to pay rent, you’re essentially taking out a loan that you’ll need to pay back with interest. If you’re unable to pay off your credit card balance in full each month, you could end up carrying debt and accruing interest charges. This can make it difficult to keep up with your rent payments in the future and could ultimately damage your credit score.
Paying rent by credit card can also be risky if you’re not careful with your finances. It can be easy to overspend when you have a credit card, especially if you’re earning rewards or cashback for your purchases.
This could lead to financial strain or debt if you’re not able to pay your credit card bill in full each month.
Additionally, if you use your credit card for other purchases besides rent, it can be difficult to keep track of your expenses and stay within your budget.
Finally, paying rent by credit card may not be an option for everyone. Some landlords may not accept credit card payments or may only accept them under certain conditions. Additionally, if you have a low credit limit or a high balance on your credit card, you may not be able to cover your entire rent payment with your card, which could create additional financial stress.
Pro Tip: Is your lease expiring soon? Check out our guide on how to negotiate a rent increase.
It’s possible to pay by debit card if your landlord already accepts payment by credit card, as the payment processor they use will typically accept both credit and debit cards.
Assuming this is the case, then it may be a better option than using a credit card. One advantage of paying rent with a debit card is that it eliminates the risk of accruing debt. When you use a debit card to pay rent, you’re spending money that you already have in your bank account, which can help you avoid the interest charges and fees associated with credit card debt.
Another benefit of paying rent with a debit card is that there are typically no processing fees or additional charges involved. Landlords may be more likely to accept debit card payments since they don’t have to pay merchant fees or worry about chargebacks or disputes that can sometimes arise with credit card payments.
Please note that smaller merchants and landlords typically do not have the ability to negotiate a lower processing fee for debit card transactions.
As a result, most landlords will unfortunately still have to pay the same ~3% processing fee regardless of whether their customer uses a debit or credit card.
Paying rent with a debit card can also be a good option for people who are trying to build credit or improve their credit score. While debit card payments don’t directly impact your credit score, they can help you establish a positive payment history, which is a factor that credit bureaus consider when calculating your credit score. By making consistent and timely rent payments with your debit card, you can demonstrate your financial responsibility and potentially improve your creditworthiness over time.
There are several potential cons of paying rent with a debit card that you should consider:
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Fees: Depending on the landlord or payment processor, there may be fees associated with paying rent with a debit card. These may equal the fees charged by using a credit card.
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Security concerns: Paying rent with a debit card requires you to share your card information, which could be compromised in a data breach or other security incident. This could lead to unauthorized debits directly from your bank account and potentially a long and difficult process of disputing them.
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Lack of credit building: Unlike credit card payments, which can help build your credit score over time, debit card payments do not typically impact your credit score. If you are trying to build or improve your credit, using a debit card to pay rent may not be the best option.
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Lack of rewards: Many credit cards offer rewards or cash back for purchases, including rent payments. If you use a debit card to pay rent, you may miss out on these rewards.
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Limited dispute resolution: If there is an issue with your rent payment or dispute with your landlord, you may have limited options for resolution if you paid with a debit card. Credit card payments may offer more dispute resolution options and protections.
Pro Tip: It’s more expensive to buy with mortgage interest rates significantly higher than what they were at the lows, and rents have yet to decline dramatically. If you’re considering moving in with roommates to save money, check out our guide on the 10 best questions to ask potential roommates before you decide on who to live with.
