“Can You Pay Rent with a Credit Card? Here’s What You Need to Know”

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Can I Pay Rent With a Credit Card?

Many landlords and property managers prefer rent payments via cash or check due to the fees and hassle associated with credit card transactions. However, some larger property management companies might offer the option to pay by card. If your landlord does accept credit card payments, be prepared for additional fees, typically ranging from 2.5% to 2.9%. For instance, a $1,400 rent payment with a 2.5% fee would cost an extra $35, adding up to $420 annually.

If your landlord doesn’t accept credit cards, third-party services like Plastiq can facilitate rent payments via credit card, but they also charge a fee, usually around 2.85%.

Pros and Cons of Paying Rent With a Credit Card

Pros

Earn rewards: Paying rent with a credit card can help you earn travel, cash back, or other rewards. For example, a $1,400 rent payment could earn you $14 to $28 in cash back each month, depending on your card’s rewards program.

Intro bonuses: Using a credit card for rent payments can help you meet spending requirements for introductory bonuses. For instance, if a card offers a $500 bonus for spending $5,000 in three months, paying $1,400 in rent monthly can help you reach that goal.

Cover expenses: If you’re short on cash, using a credit card for rent can help you manage expenses. However, this should be a last resort, as it can lead to debt accumulation and high interest charges.

Cons

Costly fees: Processing fees can add up, potentially outweighing any rewards earned.

Credit utilization ratio: High credit card balances can negatively impact your credit scores. It’s best to keep your utilization ratio below 30%.

Risk of maxing out: Regularly charging large rent payments can max out your credit card, limiting its use for other purchases and harming your credit score.

What to Do if You Can’t Pay Your Rent

If paying rent with a credit card isn’t feasible and you’re struggling to cover the expense, consider these alternatives:

• Seek assistance from local government agencies, charities, or nonprofit aid groups.
• Get a roommate to share rent costs.
• Relocate to a more affordable residence or area.
• Ask your landlord about referral bonuses for new tenants.
• Barter with your landlord for rent reductions in exchange for repairs or other labor.
• Borrow money from family or friends.
• Move in with family or friends temporarily.
• Create or adjust your budget to ensure you can cover rent each month.

Other Ways to Boost Your Credit

If you want to build credit without paying rent with a credit card, consider these strategies:

• Keep your credit card balances low and pay all bills on time.
• Sign up for Experian Boost® to count certain utility payments toward your credit score.
• Use services like RentTrack to report on-time rent payments to the major credit bureaus.

For any mortgage service needs, call O1ne Mortgage at 213-732-3074. We’re here to help you make the best financial decisions and achieve your homeownership goals.

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