Every month we have an inevitable and inescapable payment that we have to make, and other than having it serve one general purpose, there really is no other way to capitalize on it. That inescapable and seemingly unnegotiable payment that we make every month on the dot is: rent.
Your rent, unless you worked some incredible deal out with your landlord (your parents can count as a landlord too), is going to most likely be the largest bill you have to pay each month. Because this sizable chunk of your paycheck is not going into the cash pile that is being used to eventually buy the place outright, your rent checks are pretty much going into a black hole—so why not make the most of the situation and at least get some rewards points out of it?
Seems like a nice middle ground, but is this really possible? Paying your rent with your credit card sounds pretty great in theory, but is it great in reality?
Below, we take a look at the steps that would be needed to make paying your rent with your credit card possible, and if it should even be explored for your given situation.
It’s really up to your landlord.
What you need to know right out of the gate is that every landlord is different. Some landlords are very traditional and want a physical paper check in their mailbox by sundown every month on the 15th, and some landlords might be a little more modern and accept a payment via Bitcoin, or even allow you to swipe your debit card into their card reader which is attached to their door mounted tablet (I have never met a landlord who was this current, but I’m sure they are out there somewhere).
It really is up to the landlord on how they want payments to be conducted. No matter what, it is worth a conversation, and the worst they can do is shout at you that they still want paper checks every month.
Realistically, the paper check method is a no nonsense method of rent payment, but in a world where digital currency is how we move all of our funds around, why shouldn’t you be able to use your credit card to make your payment, and also earn some rewards points while you’re at it?
Why is my landlord so against paying with credit card?
The first thing that needs to be understood is why this option of paying rent with a credit card is not normally offered. Truth be told, landlords hate the idea, and they hate it for the exact same reason that every other merchant hates it: the transaction fee.
Whenever you make a payment using a credit card, it brings in a third party into the mix, and that third party wants a piece of the action. Originally the transaction in between you and your landlord via paper check was a straightforward equation of:
A pays B, and B now has money.
When you pay with a credit card, this equation becomes a little more complicated:
A pays B, and now B has to pay C a fee so that A can pay B.
Before you brought in the credit lenders, there was no added fee that B had to pay, but because you are involving the credit service now, using their services cost money, and that cost has to be paid by somebody.
There is a chance that your landlord might be cool about your proposed idea to pay rent with a credit card and just make you pay the transaction fee (which is around as high as 5% of the payment that is currently going through), which because this is your idea to begin with, sounds pretty fair.
If you want this idea to take, then it might be better if you bring up the fact that you intend to pay this extra fee. If it works and your landlord agrees to make this new arrangement works, then congratulations, you can now earn rewards points by paying your rent.
But here is how you CAN pay rent with your credit card.
If your landlord is unmoving on the issue of the merchant’s fee and wants nothing to do with paying it, there is still hope.
This is an age old issue, whether or not you can make payments with a credit card. Although directly, the answer is still a “No, you can’t swipe your card every month”, there are companies that have devised a workaround and set themselves up within the business of making your rent payments happen via credit card.
These are services that act as a stand-in for your rent payments, making it so that you pay them in whatever manner you please (credit card, debit card, gift card, gold coins…) and they make sure that your paid up rent check finds its way into your landlord’s mailbox by the specific time specified. It’s a simple idea, but one that is successful in turning the question around of whether or not you can pay your rent with a credit card.
Companies like RadPad and Plastiq and RentShare are all companies that have built off of the idea of working as a middle man when it comes to fund sharing, but RadPad is a company that bases itself solely upon the idea of paying your rent with a credit card and making it as easy as possible to do so.
When it comes to services like this, especially RadPad, the good news is that your landlord does not have to be on board or sign up to the service. The money is good, so they more than likely will not care that the rent check looks a little different, and the money will always show up in their mailbox on time (according to the time and date that you specify on your account).
Of course, this service is not totally free for those looking to pay rent with a credit card, as the transaction fee is currently 3.49% of your rent (remember that merchants/transaction fee we mentioned earlier?)
The transaction fee for credit cards is a small price to pay for the luxury of being able to earn reward points while paying for rent. It’s a pretty sweet deal to be finally able to earn some pretty sweet rewards on a regular purchase that you otherwise would not be able to. That $2000 purchase that you make every month by the 15th can finally be turned around into rewards through these kinds of services.
When it comes to the rent payment services, just be sure that the rewards that you will be earning are more than the transaction fee. It wouldn’t be worth it to go through all that trouble just so that you can pay a little more for rent for rewards points that really don’t offer you rewards that are more valuable than the cash you spent to earn them. Always be on the look out to make judgment calls to see whether or not the tradeoff you are making to earn the rewards points is worth the purchase.