Can you pay rent with a credit card?
November 14, 2023 6 min read
Rent or mortgage payments are one of the biggest bills people face each month. And who wouldn’t want to get the most out of something they’re already paying for? So it’s natural to turn to a credit card if you’re trying to earn rewards or if you’re in a financial pinch. But it’s not always that simple.
If you have a landlord or management company that allows it, paying rent with a credit card could be an option. But it’s important to look at the big picture when deciding whether it’s right for you.
- In some cases, it’s possible to pay rent with a credit card. But it’s a good idea to weigh the pros and cons first.
- Consider whether you can make on-time payments for the credit card bill each month. Missed or late credit card payments can affect your credit and lead to late fees and higher interest rates.
- You can weigh potential rewards against costs when deciding whether making a rent payment with a credit card might be useful to you.
- If paying your rent with a credit card causes you to come close to maxing out your available credit, this could hurt your credit scores.
Is it possible to pay rent with a credit card?
It might be possible for renters to make monthly rent payments using a credit card. But it typically depends on whether landlords or companies that manage properties allow it.
But whether it’s the right decision for you depends on more than that. If you’re trying to decide, you might ask yourself questions like:
- What other options do I have to pay rent?
- Do I have enough available credit to cover my rent?
- Is there an additional fee to pay with a credit card instead of a check or cash?
- How will a large payment affect factors like my total debt and credit utilization ratio?
- Will I be able to pay off my credit card statement to avoid building debt?
How to pay rent with a credit card
If your landlord accepts rent payment via credit cards, you can usually make your monthly payment to them in person or online. If you use a debit card to pay rent, the process might feel similar. But keep in mind, there may be additional fees if you’re trying to pay with a credit card.
You might also see third-party companies that say they can help tenants pay rent via credit card. In general, these companies accept credit card payments from tenants. The company then makes the rent payment via an acceptable form of payment on the tenant’s behalf. But these companies also typically charge fees for their service.
Do you need a specific type of credit card to pay rent?
If you’re able to pay with a credit card, you don’t typically need a specific type of credit card to do it. If you decide paying rent with a credit card is right for you, you might be able to earn miles, cash back or points by using a rewards credit card.
How much are credit card rent transaction fees?
If your landlord accepts credit card payments, they could add a percentage of the total to your monthly bill to cover processing fees. That could be anywhere from 2% to 3% of your rent. So if your rent is $2,000 a month, your fee could be anywhere from $40 to $60 on top.
Is paying rent with a credit card considered a cash advance?
A cash advance lets you borrow funds against your credit card’s line of credit. Cash advances can come with fees and higher interest rates than typical credit card purchases do. So if you’re using a cash advance to withdraw money and cover rent, then yes, the withdrawal would be considered a cash advance.
Be sure to check with your credit card issuer to understand what transactions might be considered cash advances.
Will paying my rent with a credit card affect my credit?
If your landlord or a third-party billing service reports on-time payments to credit bureaus, your rent payments could have an effect on your credit scores. But that could be true whether you pay with a credit card or not.
If you’re trying to use a credit card to build credit, it’s important to use your card responsibly. According to the Consumer Financial Protection Bureau (CFPB), that means making payments on time, every time.
Another way to use a credit card responsibly is to avoid maxing it out. That’s because one key credit-scoring factor is credit utilization. It’s a ratio that compares the percentage of the available revolving credit you’re using to how much you have available. The CFPB recommends keeping this number below 30%. Using a credit card to pay rent without a way to pay it off could cause your credit utilization to jump—and stay—above that number.
Pros and cons of paying rent with a credit card
Here are a few benefits and drawbacks to consider before you decide to pay your rent using a credit card:
Pros of paying rent with a credit card
Potential advantages of using a credit card to pay for rent include:
- If you use your card responsibly over time, it can help you build a credit history and improve your credit scores.
- You may be able to take advantage of your credit card’s digital benefits. For example, Capital One offers Bill Pay, which can help you pay your bills on time.
- Depending on your card, you may be able to earn rewards miles or cash back when you pay your rent with a credit card.
- If done responsibly, temporarily paying your rent with a card could help ease a financial burden in a time of emergency.
Cons of paying rent with a credit card
Potential disadvantages of using a credit card to pay for rent include:
- Depending on your credit card’s interest rate and processing fees, you could spend more over the course of your lease paying with a credit card than if you used a debit card, paper check, direct deposit or ACH transfer to send money directly from your bank account.
- By using a credit card to pay rent, you’re creating another bill to pay. So make sure you understand the terms of the credit card and can pay the bill on time to avoid credit card debt.
Credit card rent payment in a nutshell
Paying your rent with a credit card might be possible. And it might be a helpful option for cardholders looking to earn rewards or temporarily ease a financial burden. If you decide to pay your rent with a credit card, keep in mind these tips on how to use a credit card responsibly. And make sure you understand how paying rent with a credit card could affect your greater finances and credit.
If you’re looking for the right credit card to help you build credit, check out these credit cards for building credit from Capital One.