Your rent is almost due, and you’re looking for a way to increase your credit card spending so you can leverage your card’s sign-up bonus. Or, you’re temporarily low on cash, but you’ve got plenty of credit to leverage. So, you’re asking “Can I use a credit card to pay rent?” Here’s your answer: there are ways, but they require further explanation.
So, here’s everything you need to know to make a rent payment (or multiple rent payments) with a credit card. First, see a summary of your options. Then, look at the pros and cons of each. After that, learn the answers to some relevant questions so you can decide whether paying with a credit card is the right choice for your situation.
3 Top Ways to Pay Rent With a Credit Card
You know you can make rent payments with your credit card. But, what options do you actually have? Here are three methods for getting commercial or residential rent paid with your credit.
- Request a cash advance from your card issuer and pay rent with the money.
- Introduce your landlord to a service that enables them to accept credit cards for rent payments from tenants.
- Use an online payment service like Plastiq or CardUp.
Each of the above options can work in the right situation. So, learn more about each method so you’re sure to make the right choice.
If you’re not a renter, but you need a way to utilize your card’s sign up bonus, learn how you can pay a mortgage with a credit card.
The Ins and Outs of Using a Credit Card to Pay Your Rent
Now, should you ask your card issuer for a cash advance, convince your landlord to try a new system, or leverage an online payment service? Explore each option below to determine which, if any, is best for you and your situation.
Method #1: Take a Cash Advance From Your Card Issuer to Pay Rent on Your Home and/or Commercial Space
The most obvious, fastest, and simplest way to pay your rent with a credit card is to request a cash advance from your card issuer. Basically, you call your credit card company and request a cash advance in the amount of your rent. Then, the card issuer makes a deposit into your bank account.
In exchange, you pay the associated fees and your card payment balance instantly increases. After that, you can use your increased bank account balance to pay your rent. Easy, right?
So, this would typically be the right option when you’re desperate. If you’re short on time, funds, and need to get the rent paid, a cash advance will work. Just be aware that this method will cost you.
According to CreditCards.com, here are the average costs for a cash advance.
- Transaction fees: 5%
- Interest: 25%
Also important to note, on an advance, you don’t have a 30-day+ grace period in which interest will start to accrue. Instead, you will begin paying interest immediately.
The transaction fees alone on a $1,000 cash advance will be around $50. Then, you’ll usually pay even more toward interest, depending on how long you wait to pay it off.
Furthermore, a cash advance will not typically count toward credit card rewards. So, if you’re paying your rent with a credit card to leverage points, this method won’t help you much at all.
Will a Credit Card Cash Advance Help Boost Your Credit Score?
Yes, if you pay your card balance as agreed, a cash advance has the potential to help you increase your credit score. On-time payments can impact your score with all major credit bureaus. And, credit card issuers typically report payment history each month.
However, especially since other methods cost less, avoid a cash advance on your credit card unless you’re in a pinch. And, pay back the advance as soon as possible to avoid paying more than necessary.
Method #2: Introduce Your Landlord to an Online Rent Payment Service to Enables Them to Accept Credit Cards for Tenant Rent Payments
Many property management companies already allow their renters to pay rent online. So, before you finish learning about this method, are you sure your landlord doesn’t already offer an online payment opportunity? If you are sure, read on — you may be able to show them a new, mutually-beneficial system.
Which is the Best Online Rent Payment Service?
There are several modern cloud-hosted property management software options that enable you to pay your rent with a credit card. So, try to get your landlord on-board by introducing them to a new, more convenient option like one of the following.
As you can see from the above chart, this method is much less expensive than taking a cash advance on your credit card. However, you will still pay interest based on the agreement you have with your creditor.
And, when you pay rent on-time, some platforms like RentTrak and PayYourRent will report your payment activity to credit bureaus. So, not only will you receive a credit boost from paying your credit card on-time; you will also get a separate positive mark on your credit report for paying your rent. So, in some cases, this method has double credit-boosting power.
Moreover, in most cases using a credit card to pay rent to one of the above companies will count toward your card’s promotional bonus points. Just double-check your card issuer’s promotional terms and conditions to be sure.
There are a lot of benefits to going this route. The only major hurdle is that you have no control over whether or not your property management company will want to implement this route. So, you’ll have to work out your sales muscles.
And, if you take this route, theoretically, late rent payments can negatively affect your credit score. You will open a new set of risks along with the rewards. But, as long as you consistently pay your rent on-time, you shouldn’t experience any problems.
Method #3: Use an Online Payment Service to Pay Rent on Your Home and/or Commercial Space With a Credit Card
Finally, online payment services can be used to pay rent (and nearly any other bills) with a credit card. In exchange for a small fee, these systems make it easy for you to maintain complete control over which bills are paid from which funding sources (i.e. pay your rent with a credit card).
Online payment services like Plastiq, CardUp, and RadPad invite users to pay bills and buy items with credit cards where cards are not typically accepted. Use your Visa, MasterCard, American Express and other major credit cards to pay your rent using this method.
Essentially, you connect your credit card to the service as a payment method and the system automates your rent payment using the means that your landlord prefers. Your payment can be sent as a check, wire transfer, or ACH transfer.
Online Payment Service Comparison
The following comparison table includes processing fees followed by which cards are accepted by Plastiq, CardUp, and RadPad.
The only downside to this method is that you will pay a fee in addition to your card’s regular interest charges for each transaction. If you opt for an online payment service to automate your rent payments, you will only pay a small transaction fee for using the platform.
So, this can be an excellent option to pay rent with a credit card and simultaneously leverage your card’s sign up bonus and boost your credit score with on-time payments. And, in some cases, the landlord or property manager will opt to cover the transaction fees for their tenants’ convenience.
To pay your rent with a credit card, you can take out a cash advance, introduce your landlord to a new payment platform, or use an online service. Each method comes with a unique set of advantages and disadvantages.
For many people, online payment services like Plastiq or CardUp are wonderful options for paying your rent with a credit card. You can leverage these systems with fewer fees than a cash advance. Plus, you won’t have to convince your property management company to make any internal changes to their business processes.
However, if your main goal is to improve your credit, put in the extra effort and ask your landlord to move to a platform like RentTrak or PayYourRent that enables you to pay rent with your credit card and reports on-time payments to the major credit bureaus.
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