Using a Credit Card to pay rent: the pros and cons

How can you pay rent with a credit card?

It’spossible to pay your rent using a credit card—depending on the platforms and options your landlord or rental agency offers. If you pay your rent online via portals or apps, a credit card could be one of the potential payment options available to you.

Using your credit card to pay rent could potentially let you earn points via rewards programs. However, additional fees and surcharges could also apply in some cases when paying your rent with a credit card. Rental payments via a credit card can also be treated as cash advances in some cases, which could charge higher interest rates and not earn you rewards points.

The pros and cons of using your credit card for rent

Pros

• You could earn rewards points.
• Payment convenience: you can pay online or via an app in some cases.
• It may assist in meeting your minimum spend to earn bonus rewards points.
• It could help you build your credit score if you make payments on time.

Cons

• Fees and surcharges could outweigh the benefits you may receive from redeeming reward points.
• Putting rent payments on your card could lead to high interest costs and increased debt if not repaid in time.
• It could lower your credit score if you don’t pay your card balance on time.

What platforms allow you to use your credit card for rent?

Some agents use third-party platforms to outsource the rental payment process, which could allow tenants to pay by credit card. These services may add surcharges to each credit card transaction, and membership and payment processing fees could also apply.

Some payment platforms include:

DEFT

This platform is owned and operated by Macquarie Bank and allows users to pay rent with their credit card. It offers convenience and security, rather than a rewards program. You can also sign up for an account and use other payment options. DEFT charges a $0.85 fee per transaction, as well as having a 1.50% Visa credit, 1.20% Mastercard credit and 1.50% American Express (AMEX) card surcharge.

To use DEFT to pay rent, your agent or landlord must be a registered biller. Many agents from large real estate franchises, such as Harcourts, Ray White and LJ Hooker, as well as many independent agents and landlords, currently use the DEFT system.

Pay.com.au

Pay.com.au is a business owner focused platform that allows users to earn points from bills paid through the site. Bills can include rent, payroll, taxes and superannuation. PayRewards Points are earned for every $1 processed through the site (fees apply). Their PayRewards Points can then be exchanged for points from several different airline and hotel reward programs.

Pay.com.au offers a free membership, as well as regular and premium memberships, which cost $85 and $165 per month respectively. These paid memberships allow users to access better fee rates, as well as booking concierge and advice services. For the free membership, Pay.com.au charges a 1% Mastercard credit, 1.2% Visa credit and 2.10% AMEX fee on transactions.

RentPay

RentPay users can earn cashback on electricity and gas bills if they are an Origin customer; and up to 15% off retailers such as Coles, Bunnings, Woolworths and Uber Eats with the Paylab app.They also offer a feature which can help you increase your credit score while using the service.

RentPay charges a $2 monthly fee and 0.99% transaction fees for both Visa and Mastercard credit payments. RentPay works without needing your agency or landlord to sign up, as they align the payment to their preferred method, be it BPAY/DEFT or Bank Transfer/OSKO.

Rental Rewards

Rental Rewards allows tenants to pay their real estate agent through one-off or recurring payments once they have registered online. It has a $1.51 set up fee, a monthly membership fee and other associated card fees. According to Rental Rewards, agents from some of the leading real estate groups in Australia, including Ray White, Raine&Horne and Professionals, offer the service to tenants.

One of the highlights of this service is the ability to use your credit card, with the payments not being treated as cash advances, therefore earning points towards selected rewards programs. Rental Rewards also offers 1,000 Qantas Frequent Flyer points each year for using a participating card.

Sniip

Sniip is an app that allows you to pay any bills, including rent, with your credit card. Business and rewards credit card holders may also be able to earn points by making payments via this app. Sniip charges no monthly account fees for personal or business usage. Transaction fees vary, with personal usage fees for Mastercard and Visa credit incurring a 1.5% surcharge and AMEX personal cards a 1.29% surcharge.

Should you pay your rent with a credit card?

Building your credit card reward points each time you pay rent may seem like an appealing prospect. Plus, there are the rewards offered by certain payment platforms to consider.

But before you start paying your rent with a credit card, it’s important to consider the fees, interest charges and potential impact that a credit card can have on your credit score.

It’s also important to consider how you use your credit card. As rent can be a significant household and/or business expense, it can quickly increase the size of your monthly credit card statement. If not managed carefully, it can cause increased interest charges and potential debt, such as if you aren’t able to pay off your statement each month before incurring interest.

What other bills can you pay with your credit card?

Some of the bills you may be able to pay with your credit card could include your:

• electricity
• gas
• water
• internet
• phone
• insurance

It’s important to note that while this could help you build up points with a rewards credit card, it can also risk financial strain if not managed correctly.

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