Using a credit card to pay rent

It is possible to pay rent with a credit card, but it may be more complicated and costly than you think. Not all landlords offer this option, and if they do, it's likely with an added charge to cover their transaction fees. Still, many people find that the benefits – namely, convenience – could outweigh these fees.

To learn more about the different ways to pay rent with your credit card, let's explore the following topics:

• Four ways to pay rent with a credit card.
• The advantages and disadvantages of paying rent with a credit card.
• Paying rent by credit card: Are the fees worth it?

4 ways to pay rent with a credit card

Depending on your landlord, there are several ways you can use your credit card to pay your rent. 

1. Pay through your landlord

Most landlords do not accept rent payments via credit card, and those who do may tack on a fee that will outweigh any potential rewards you would earn. Your landlord or property manager may offer one of these scenarios:

Allows you to pay by credit card with no added fee: Though many credit cards may work, if you happen to have a rewards credit card, you're in a great position to pay with a rewards credit card and earn cash back, miles or points.

Allows you to pay by credit card but adds a fee: Credit card companies typically charge landlords a merchant processing fee. The landlord will likely pass that fee onto you so they don't incur that cost themself. Make sure to calculate how much the merchant fee will add to your rent each month and decide if it's worth it.

One-time exception: If you're in a pinch, you might ask them to make a one-time exception. They may be willing to accommodate and tack on a processing fee.

2. Use a third-party service

A third-party service or app allows you to pay rent, mortgage and most other bills using a credit or debit card, but transaction fees will be added. For some of these services, landlords have the option of covering the fee for you.

Third-party services for paying rent with a credit card 

Story by J.P. Morgan

• Transaction Fee: Currently no transaction fees for tenants or landlords (pricing subject to change).
• Needs landlord involvement? Yes, eligible landlords need to create an account and onboard a property to accept rent payments through Story.

Third Party Provider: RentPayment

• Transaction Fee: 2.95%
• Needs landlord involvement? Yes, landlords have to accept a direct deposit 

Third Party Provider: Rent Track

• Transaction Fee: 2.95%
• Needs landlord involvement? No, landlords receive a paper check
• Note that there is a subscription fee to use this service.

Third Party Provider: PlacePlay

• Needs landlord involvement? Yes, landlords have to accept a direct deposit
• Transaction Fee: 2.99%

Third Party Provider: Paypal, Venmo, Zelle, etc. 

• Transaction Fee: 2.9% - 3%
• Needs landlord involvement? Yes, landlords have to have an account

3. Use a cash advance

You have the option of taking out a credit card cash advance. You can do this at your bank branch, at an ATM or through a convenience check. Consider if a cash advance is your best choice though. There may be a cash advance fee and you will likely have a higher cash advance APR, which usually begins immediately. 

4. Use a balance transfer

You can use a credit card with a balance transfer option. With this method, you move an existing high-interest balance to a new card with a lower rate. Balance transfers usually offer 0% APR for an introductory period. Paying less interest (or no interest) for a period of time frees up money to put towards rent and debt. 

The pros and cons of paying rent with a credit card

Putting your rent on a credit card usually involves a fee, but it has some advantages. For some, convenience is the biggest benefit. Others may find that the value of rewards (cash back, points, miles, etc.) outweigh the associated fees.

Advantages of paying rent with a credit card

• Introductory bonus: Some premium rewards cards offer a sign-up bonus if you meet their minimum spending requirements. Putting rent on your credit card may accomplish this.
• Rewards: Earn rewards, like miles, cash back and points while paying rent.
• Convenience: Pay online or by phone if you're traveling. This can also help you avoid late fees.
• Financial coverage: Credit cards allow you to pay rent, even if you don't have the cash. This is helpful for those with sporadic paychecks.
• Build credit history: Paying your credit card bill in full and on time is one of the most impactful ways to build and improve your credit score.
• Safeguards: Paying through a third-party app allows you to schedule on-time payments, avoiding any late fees. 

Disadvantages of paying rent with a credit card

• High fees: Using a third-party app to pay rent can cost you an additional percentage of your payment.
• Interest charges: If you don't pay your credit card balance in full each month, you'll pay interest on all charges, including your rent.
• Budgeting issues: Using a credit card to pay rent could entice you to use available cash for other things and debt can accumulate.
• Credit score damage: Rent is a large sum of money that can increase your credit utilization ratio and could hurt your credit score. This is especially true for those with low credit lines. A rule of thumb is to not exceed 30% of your available credit.
• Limited credit line: If you have limited credit or bad credit, you may have a low card limit that won't cover rent. 

Paying rent by credit card: Are the fees worth it?

Take a look at your rent, which payment methods you can use, associated fees and benefits — and then decide the best option. For example, let's say your rent is $1,500, and the third-party app you choose charges 3% to use a credit card. This means you'd be paying $45 for this service each month. If you pay using a rewards card offering 1% cash back, this means you've gotten $15 back in value, lowering your overall monthly app fee to $30.

In conclusion

Try to avoid processing fees by negotiating with your landlord. Either way, it's best to find a rent that doesn't overextend your budget and make it hard to pay for your basic living expenses. Remember that credit cards can be helpful when paying for rent, but you don't want to exceed a 30% credit utilization ratio.

Chase has many credit cards to choose from and some may fit your needs perfectly.