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There’s a lot to love about paying rent with your credit card – convenience, flexibility, and the potential to earn rewards, to name a few. On the flip side, paying rent with a credit card might be more complicated, and additional costs could be involved.

Let’s take a look at what you need to know about using your credit card to cover your rent.

How to pay rent with a credit card

While paying rent with a credit card sounds appealing, many landlords and property management companies don’t directly accept credit card payments.

They might not want to accept credit cards due to credit card fees or dealing with the process of opting into credit card payments. In some cases, they might prefer the simplicity of receiving checks or money pulled directly from a checking account.

But if your landlord does accept a credit card as a rent payment, here are a few ways you can go about it:

1. Pay your landlord directly. Your landlord might cover the processing fee or ask you to cover it. The transaction fee varies and can be anywhere from 1% to 3%.¹

2. Use a third-party payment service. Existing platforms can enable you to cover your rent with your credit card. Once you pay rent with a credit card, they do the work of converting your transaction into different payment methods – check, direct deposit, or wire transfer – for vendors, businesses, and other parties that typically don’t accept credit or debit card payments.²

Some of these platforms report your rent payments to the credit bureaus, which could increase your credit score. However, they also charge a transaction fee, which may be as much as 2.9% of your rent amount.² These platforms might also have paid plans, which means an added monthly subscription cost.

3. Tap into a cash advance. While not a direct method, you could go to an ATM or bank branch and pull funds via a cash advance to pay your rent. You’ll need to pay back what you took out, plus there’s usually a cash advance fee and a higher APR for cash advances.

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How paying rent with your credit card can impact your credit score

Using a credit card to cover your rent can affect your credit score positively or negatively. On the positive side, consistent, on-time credit card payments can improve your credit history. In turn, this could mean an increase in your score.

However, it could mean high utilization. Credit utilization makes up 30% of your credit score, and the lower your usage, the better. A general rule of thumb is to keep your credit utilization below 30%.

If you’re falling behind on your credit card payments or unable to pay the balance in full each billing cycle, it could negatively impact your score.

Considering homeownership? Read more on the rent vs. buy debate.

Pros and cons of credit card rent payments

Before deciding whether paying rent with your credit card is right for you, consider the advantages and disadvantages:

Pros

Let’s start with the pluses:

  • Can improve credit. Staying on top of your payments can enhance your credit score. Plus, paying your rent with a third-party platform that reports your positive payment history to the credit bureaus can also help build your credit.
  • Automated payments. Linking your credit card to your rent payment and setting up autopay will ensure your rent is paid on time.
  • Credit card rewards. Housing is a big-ticket expense, along with transportation and food. Using a rewards credit card to cover your rent each month could mean earning more travel or cash back rewards.
  • Introductory bonus. Strategically opening a new credit card and using it to cover rent could help you meet the spending minimum for the intro bonus.

For instance, a card might offer 60,000 bonus points if you spend $4,000 within the first months of opening an account. If your rent is $1,500 a month, you can meet the spending threshold by using your credit card to pay your rent.

Cons

Now, let’s look at the downsides:

  • Increased costs. For example, if your rent is $1,500 a month, and the processing fee is 2.9% of the rent amount, then you’re looking at $43.50 added to your rent each month or $522 each year.³ That’s enough to cover a few streaming subscriptions or a dinner out. Plus, while you might earn rewards on your credit cards, the processing fees and interest rates can outweigh them.
  • Potential debt. Carrying a balance could get you into credit card debt – which comes with interest fees. Further, if you start to fall behind on your credit card payments, that could hurt your score.
  • Budgeting woes. If you’re struggling with gaps in cash flow, paying with a credit card could provide short-term relief. But credit card debt could eat into your budget and leave you with less to spend on things like utilities, food, and transportation.

Curious to explore rent-to-own options? Learn more about how rent-to-own works.

Should you pay rent with a credit card?

Now that you’re aware of the advantages and potential pitfalls of going this route, here are some best practices before moving forward:

  • Explore alternative rent payment methods. Instead of paying with a credit card, see if your landlord accepts direct bank transfers or ACH payments. This might offer the convenience of paying with a credit card without the fees and can be more cost-effective.
  • Check your available credit. Make sure your credit limit can comfortably cover your rent without maxing out your card. Even if you won’t max out your card, higher credit utilization can negatively impact your credit score.
  • Find out if there is an extra credit card payment fee. Factor in any fees charged by third-party services. Remember, added fees can make paying with a credit card more pricey.
  • Aim to pay off your credit card statement. To prevent accruing interest, try to pay off the balance in full each month. If this isn’t doable, devise a plan to pay off your balance as quickly as possible.

For a deeper dive into figuring out your rent budget, check out Chime’s rent calculator.

Other options to pay your rent

If covering your rent bill with a credit card might not be well suited for your scenario, here are some alternatives to consider:

  • Debit card payment. Some landlords and property management companies may accept direct debit payments. These usually have lower fees than credit card transactions.
  • Traditional paper check. This method is often preferred by landlords and involves no processing fees. Plus, some financial institutions offer bill payment as an option, and you can schedule your rent each month.
  • Cash payment. While this route is becoming increasingly less common and requires a receipt for proof of payment, it’s direct, no-frills, and immediate. Your landlord will likely appreciate having cash in hand.
  • Bank wire transfer. This method is secure and direct but may involve fees. There are usually two types of wire transfer fees – outgoing and incoming. The typical fee for an outgoing domestic bank wire transfer is $26.⁴
  • Money order. If paying with a check isn’t feasible, or you’re afraid of accidentally running low on funds before your landlord cashes your check, paying with a money order is a reliable alternative. There are fees involved, and they vary depending on where you purchase them. Fees for money orders can be anywhere between $1 and $5, and the amounts of a money order are usually capped at $1,000.⁵

Make the best choice for you

While paying rent with a credit card can be convenient, it might be a more expensive option compared to other payment methods. Before choosing this route, make sure you have the means to cover the credit card payment in full.

Find out more about the rising costs of rent and how to manage them.

Chime® is a financial technology company, not a bank. Banking services are provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC. The Chime Visa® Debit Card and the Chime Credit Builder Visa® Credit Card are issued by The Bancorp Bank, N.A. or Stride Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit and credit cards are accepted. Please see the back of your Card for its issuing bank.

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¹ Information from CNBC's Should You Pay Rent With a Credit Card? 'It Could Rapidly Spiral,' Expert Warns as of March 11 2024: https://www.cnbc.com/2024/01/30/should-you-pay-rent-with-a-credit-card-experts-weigh-in.html

² Information from Plastiq's Pricing Page as of March 5, 2024: https://www.plastiq.com/pricing/

³ Information from Zumper's Zumper National Rent Report as of March 5, 2024: https://www.zumper.com/blog/rental-price-data/

⁴ Information from Bankrate's How Much Are Wire Transfer Fees? as of March 5, 2024: https://www.bankrate.com/banking/wire-transfer-fees/

⁵ Information from Forbes Advisor's Cashier's Check Vs. Money Order as of March 5, 2024: https://www.forbes.com/advisor/banking/cashier-check-vs-money-order/

* To apply for Credit Builder, you must have received a single qualifying direct deposit of $200 or more to your Chime Checking Account. The qualifying direct deposit must be from your employer, payroll provider, gig economy payer, or benefits payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT). Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash loads or deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be a qualifying direct deposit are not qualifying direct deposits.

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