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Can I Pay Rent With a Credit Card?

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Should I Pay My Rent With a Credit Card?

Paying your rent by credit card has some appeal. It can mean fewer late payments and no need to deal with checks. That convenience, though, often comes at a substantial cost.

If you’re considering this option, read on for tips on when it might make sense to pay rent with plastic, and when you might just get yourself into trouble.

How to pay your rent via credit card

The easiest method is through a rent payment service. These companies allow tenants to pay their rent with a credit card for a percentage-based processing fee, and many require no additional involvement from your landlord.

Jonathan Eppers, CEO of rent payment service RadPad, notes, “[RadPad] doesn’t require the landlord to be on the service with the renter. The way this works is, the renter basically gives us their debit or credit card information, and we send a check on the tenant’s behalf to the landlord.”

» UPDATE Oct. 17, 2016: RadPad has stopped providing rent payment services. The other services mentioned in this article remain in business. 

RadPad, which started as a way to help renters find new apartments, recently rolled out rent payment via credit card with a 2.9% fee and via debit card with no fee.

“The truth is, most people who build rental sites don’t build them for renters,” Eppers says. “These sites are usually built for landlords and property managers because those are the ones that are typically paying to use it every day, week, month. Renters come and use it once and are gone.”

It’s for this reason, Eppers believes, that renter-focused companies such as his have an opportunity to provide better value to tenants through payment flexibility, and more affordable (or free) forms of payment.

» MORE: Why nearly every purchase should be on a credit card

RentShare offers a similar rent-payment service, charging 2.9% for every credit card-based payment, or a $1.95 flat fee for debit transactions. The platform also allows users to split costs such as utilities, food and other common household goods, creating an all-encompassing solution for roommates to divvy up shared costs.

Plastiq, a company that allows customers to use a credit card for everything from tuition to taxes, charges a slightly more affordable 2.5% fee for rent transactions through credit cards. For those set on paying rent with their credit card, this service is one of the most affordable routes. Plastiq’s FAQ notes that they “cannot guarantee the acceptance of debit or prepaid gift cards at this time,” which means you’re likely doling out a percentage fee when you use this service.

Of course, it is possible to offset some of the associated fees with a cash-back credit card. This credit card, for instance, grants users an unlimited 1.5% cash back on all purchases, which effectively reduces the cost of paying your rent via credit card to 1% with Plastiq and 1.4% with RadPad and RentShare. Plastiq, RadPad and RentShare all allow users to set up recurring payments as well.

Before you sign up with one of these sites, though, be sure to check with your landlord to see if they already offer payment through a sometimes more affordable property management service. AppFolio, for example, offers an online rent payment solution that does require landlord involvement, but charges as little as 1.23% when tenants pay with a credit card. (Costs depend on the size of your rent payment.) At that rate it’s even possible to make money (with cash back) by simply paying your rent.

» MORE: How paying rent can affect your credit

Things to look out for if you do pay your rent with a credit card

Before you sign up for any of these services, here are some things to keep in mind.

First, make sure you have sufficient open credit. Holding too much debt on a credit card or cards at any given time can hurt your credit score. About 30% of a cardholder’s FICO score is determined by amounts owed. This percentage is largely factored by looking at an individual’s credit utilization ratio, or the amount of credit in use against the amount of credit you have available. For example, if you have a $3,000 credit limit and you charge a $2,500 rent payment, you’re effectively using about 83% of your available credit, which would tend to lower your credit score.

Also, make sure you can pay off the credit card bill each month. With credit card APRs often in the high teens and low 20s, monthly interest charges can devour your budget. Tack on a transaction fee from the rent payment company, and you’ve got an expensive proposition.

Should you pay your rent with a credit card?

For those who can afford to pay their rent in full every month, there isn’t much reason to pay an additional fee just to transact via credit card, since even the most generous card reward programs won’t offset the full fee. Doing so may be best for those who occasionally can’t meet their rent late-payment deadline.

“If you look at the average renter on RadPad right now of all renters across the country, it’s about 1,600 bucks. Most landlords charge anywhere from 3% to 5% on a late fee, or they charge a standard flat fee. If you compare that to the credit card fee, the credit card is probably less,” Eppers says.

If having your rent paid automatically each month appeals to you, it’s best to opt for a service that allows you to do so for free (or for a nominal fee) via debit card. You can also set up a regular debit transfer with your landlord. The rent will be paid on time, without the additional fees.

Kevin Cash is a staff writer at NerdWallet, a personal finance website. Email: kcash@nerdwallet.com. Twitter: @kevin_cash.


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