You Can Pay Rent with a Credit Card — But Here’s Why You Shouldn’t

published Nov 19, 2023
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With housing prices at record highs, many people have tried to find creative ways to help fit their rental or mortgage payments into their already overstretched budget. Sometimes these methods include trying to finance those monthly payments with the help of a credit card. And while there are some renters who are able to use their plastic when the first of the month rolls around, the financial experts we talked to said that this method is not without its risks. Here’s everything you need to know about trying to pay your rent with your credit card. 

Can You Pay Rent with a Credit Card?

First and foremost, Shinobu Hindert, certified financial planner and author of Investing is Your Superpower says you need a landlord or property manager who is willing and able to accept this type of payment. “Many landlords are not comfortable accepting credit card charges because of the fees they incur and they want to know you are able to meet your monthly obligation without relying on credit,” she says.

Next, she says you’ll have to check the math and see if this is really your best financial strategy. “Determine if there’s an additional fee to using a credit card for your monthly rent payments,” she continues. “Your landlord may charge you transactional fees of two percent or more, so it may not be worth the extra expenses.”

Is Paying Rent on Your Credit Card Bad for Your Credit Score?

When it comes to actually using your credit card for your rent, Rachel Durci, financial wellness coach and founder of Effortless Budgeting, says putting your rent on your credit card isn’t any different than putting something like groceries on your card, as the credit bureaus don’t know what you’re using your plastic for.

That being said, Durci wouldn’t exactly advise her clients to do this. “That’s a good way to really rack up debt,” she says. “Someone needs to make sure they can afford their most basic bills without using a credit card, such as rent/mortgage, utilities, and food.”

If you’re considering paying your rent this way for other reasons — maybe you want to take advantage of cash back options or collect travel rewards — Hindert says there are a few things you’ll need to make sure you understand, like the limits on your credit cards. “If you have a $10,000 credit limit on your combined credit cards, you want to keep your monthly revolving debt under $5,000 to ensure your credit score isn’t negatively impacted,” she explains, adding that you never want to use more than half of your available credit in any given month. 

Paying Off Your Debt

Something else Hindert says you’ll need to know before you attempt this is exactly how you will cover these funds when your card’s bill comes due. “Plan ahead to see if you’ll be able to pay off your credit card balance each month,” she says, adding that if you don’t have the means to completely cover what you’ve put on your card you could quickly find yourself in a tough financial position that will be hard to get out from under. 

Are There Credit Cards That Are Best for Paying Rent?

If you’re sure you understand the risks of doing this, Hindert says you should seek out rewards-based credit cards. “Find out what the cash-back options are on the credit cards you have or travel points,” she continues. “For example, if your credit card gives you two percent cash back but your landlord is charging you a two percent fee to use your card, the rewards get canceled out.”

However, if you get points towards free travel using an airline credit card, Hindert says it may be worth paying those transaction fees. “Ultimately, paying your rent with a credit card could be a great way to rack up travel points or be rewarded with cash-back features, but you need to read the fine print.”

As for the exact cards you should be shopping for, Durci has a few suggestions, like Discover, which she says has a card that will actually match your cash back rewards at the end of the year. “Chase Amazon is also a good one, even if you don’t shop on Amazon that much because they still give cash back,” she says, adding that she prefers cash-back cards rather than miles or gift cards because you have more flexibility on what to do with your cash back, including putting it right on your credit card as part of your payment. 

No matter what you end up doing, the thing to remember is that you’ll need to be able to pay both of these bills on time every month to avoid having late payments showing up on your credit, as these will definitely hurt your scores.