So, you want to pay rent with credit card. Sure thing— it’s a cool way if you want to rack up those rental rewards and credit card reward points, save money on rent, or snag some cash back.
But before you jump headfirst into credit card payments with a decision that could put a dent in your credit and overall financial health, take the time to consider all the pros and cons.
In this article, we will discuss paying rent with plastic — the good, bad, and ugly — plus alternative payment options to credit card payments, how to negotiate rent, and tips for safe swiping.
The ups and downs of paying rent with a credit card: Let’s talk pros and cons!
Just because you’re paying with your credit card doesn’t mean you get cheaper rent. Let’s take a closer look at the pros and cons.
Pros
- Rewards points and cashback opportunities: credit card payments are a great way to save money and score rewards – why not pay your rent with one? It’s an awesome way to rack up points or even get cash back for the purchases you make.
- Convenience and flexibility: Paying rent with a credit card is a game-changer when it comes to convenience and flexibility. Life can be busy, so this option eliminates the need for checks or cash and allows you to set up automatic payments.
- Ability to improve credit score: Got bad credit? Paying your rent with a credit card can be a real lifesaver! Make sure you pay on time and keep your utilisation low.
Cons
- High transaction fees and interest rates: Paying your rent with a credit card can be a real drag when it comes to those hefty transaction fees and sky-high interest rates for one-off payments. Those costs can add up in the blink of an eye and could make that much-hoped-for cashback or reward completely pointless.
- Potential debt accumulation: It’s oh-so-tempting to pay your rent with a credit card, but this can spell big trouble if you’re not careful. The reason is that before you know it, the debt can quickly spiral out of control! If you don’t pay off the balance each month.
- Possibility of damaging your credit score: If you’re not careful, paying your rent with a credit card can hurt your credit score – late payments or carrying a high balance might just do the trick!
David Boyd, a credit card expert from Australia’s popular credit card comparison site CreditCardCompare.com.au, provides a nuanced view of the trend of paying rent with credit cards.
“While using a credit card for rent payments presents an enticing opportunity to earn rewards and improve flexibility, it’s a double-edged sword,” Boyd cautions.
“The allure of points and cashback must be balanced against the reality of transaction fees and the potential for accruing high-interest debt. This strategy requires discipline; timely payments and low credit utilisation are key to avoiding the pitfalls of debt accumulation and negative impacts on your credit score.
Consumers must weigh the benefits of convenience and rewards against the costs and risks to make informed financial decisions.”
Alternatives to charging the rent: Got other ideas?
Automated Clearing House (ACH) payments
Making rent payments can be a hassle—between the high transaction fees and interest rates, it’s no wonder it can leave you feeling rushed! But with Automated Clearing House (ACH) payments, you can easily and securely transfer funds directly from your bank account to your landlord’s.
Online payment platforms
There are some awesome online payment platforms out there, like PayPal and Venmo, that let you pay the rent through your bank account or debit card quickly and easily. These usually come with a tiny fee, but compared to credit cards, it’s a bargain!
Personal checks or money orders
Making rent with personal checks or money orders—now that’s old-school! It’s easier than you’d think and usually comes without any extra fees or interest rates.
Direct deposit
Bank transfers are secure for one-off payments! Forget worrying about searching for lost checks or rushing to the bank; send your rent money straight from your account to your landlord’s.
Debit card payments
Direct debit payments are a way better deal than credit cards when it comes to making rent payments – no high-interest rates, no direct debit fees, and no pesky transaction fees.
How to pay rent with a credit card?
If you’re thinking of using a credit card to pay the rent, here’s how to do it right:
Check with your landlord
Before you switch up your payment style, double-check with your landlord to see if they’re cool with or accept credit card payments and if there are any extra fees or specifications.
Choose the right credit card
It’s important to pick the right credit card, especially if your landlord takes plastic! If you’re one of the lucky ones, opt for a card that offers rewards, no payment processing fees, or even cashback on purchases.
Set up automatic payments
Set up autopay and prevent the headache of late payments! Coordinate your due dates with automated payments to guarantee your bills are taken care of on time – but be sure to pay attention to avoid accumulating debt.
Monitor your credit score
It pays to keep an eye on your credit score – literally! Using a credit card to pay rent can have a positive effect on your credit, so long as you make sure things are paid on time and don’t over-extend yourself.
People also ask
Can I pay rent with a credit card in Australia?
Absolutely! But make sure they accept this card or payment method and also see if there are any extra charges or stipulations for credit card payments.
What is the average rent in Australia?
According to the latest info from Domain and real estate agents, the weekly average rent in Australia for a house in Oz sits at a sky-high $469, while units come in slightly lower at $390 per week. Rent prices really can differ significantly depending on where you live, what type of property you’re after, membership fees, and factors like that!
