In the era of automation, one way to simplify your finances is to use your credit card for regular monthly payments. Expenses like car insurance, cell phone bills and even your Netflix subscription can all be charged to your credit card and help you simplify your finances. And, if you have a rewards credit card, you can earn travel points or cashback while you’re at it.
One huge monthly expense that doesn’t usually appear on your credit card bill is your monthly rent payments. Typically, you’ll pay your rent through physical checks, money transfers, or automatic debit. But that’s changing, and it’s now possible to pay rent with a credit card. But is it a good idea? While earning rewards points on such a significant recurring expense is appealing, paying your rent with your credit card also has downsides, like incurring interest charges or impacting your credit score.
1. How to Pay Rent with a Credit Card?
If you’re wondering, can I pay rent with a credit card? The answer is yes, and it’s easier than you think.
To pay rent with your credit card, you’ll need to use specialized software like Baselane to set up automatic rent payments in just minutes. Then, you can invite your landlord to sign up, and once they do, you’ll receive an invite email.
Setting up your account is easy and lets you make one-time or recurring rent payments. These online payment systems usually allow you to pay rent in various ways, including through bank transfer, debit, or credit card.
Rent payment software allows you to send payments and receive receipts and manage future payments from various devices. In addition, you can view your payment history, set up reminders to pay your rent, or set up autopay to avoid late fees.
Online rent payment systems are also secure. Baselane uses leading payment technologies, including Stripe and Plaid, and 256-bit bank-level SSL encryption to secure your payment information.
2. The Pros and Cons of Paying Rent with a Credit Card
Paying your rent with a credit card using online payment software is indeed straightforward, but is it wise? There are pros and cons to using your credit card to pay rent, and we break them down below:
- No more checks: Instead of keeping a checkbook and writing and sending checks, pay your rent through an easy-to-use online portal.
- Credit card points: If you have a rewards credit card, you can earn points or cashback on every transaction. Depending on your reward rate, you could make hundreds in cashback throughout the year.
- Even out cash flow: Freelancers, contractors, and business owners understand that cash flow can be cyclical. Paying your rent with a credit card helps smooth out those cycles and ensures you pay your rent on time.
- Fees: Some rental payment software charges fees.
- May impact your credit score: If you charge your rent to your credit card and don’t pay it off promptly, you may see a drop in your credit score as your credit utilization rate goes over the recommended threshold of 35%.
- Interest charges: When you charge your rent to your credit card, you have 21 days before you are charged interest. If you don’t pay off your rent in that time, you’ll face steep interest charges.
3. Should You Pay Rent with a Credit Card?
We’ve answered the question of can you pay rent with a credit card, but should you? Paying the rent with your credit card has several benefits, including convenience and the ability to rack up hundreds of dollars in travel points or cashback. Paying the rent with your credit card can be as easy as paying other recurring bills like your phone bill or Netflix subscription. It is safe, secure, and convenient.
That said, there are some cons. For example, suppose you aren’t disciplined with your spending or regularly carry a credit card balance close to your credit limit. In that case, you could quickly accumulate costly interest charges.
Ultimately, deciding whether to pay your rent with a credit card is a personal choice based on your unique spending habits. However, if you are financially disciplined and your spending is under control, we think that paying your rent with a credit card can be an excellent way to earn rewards and automate this essential monthly service.
Paying the rent with a credit card starts with your landlord signing up to use a rental processing service like Baselane. After your landlord has signed up, you’ll create an account, link your banking information, and schedule one-time or automatic payments. Your rental payment processing service portal will provide you with rental receipts, and you can even configure it to remind you of upcoming rental payments. The service is safe and secure and uses transaction software like Stripe and Plaid and 256-bit bank-level SSL encryption.
There are many benefits to paying the rent with a credit card. The most significant benefit is earning rewards from your credit card – either travel rewards points or cashback. Depending on how much rent you pay and your credit card’s reward scheme, you could earn hundreds in rewards. In addition, paying the rent with a credit card allows you to stop using checks, automate a process, and generate and store receipts.
A common concern when making any online transaction is whether it is safe and secure. In our opinion paying your rent with a credit card is one of the safest ways to make this essential payment. Unlike checks, which can become lost or be forged, paying your rent with a credit card involves leading payment technologies like Stripe and Plaid and uses 256-bit bank-level SSL encryption. In addition, you can stop or change your payment methods at any time. So, unlike with an automatic debit, you don’t have to worry about your landlord withdrawing too much money from your account, and you’ll always have a record of receipt of payment.