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Benefits of Rent Payment Through Credit Card

Credit cards have made lives easier, especially for people who live from paycheck to paycheck. They are also very useful in emergency situations where one might not have enough money with them at that very moment. Paying rent for a house, car, or anything else with a credit card has both advantages and disadvantages. Let’s have a look at the benefits first. 

• Emergency Fund: If a rent payment is about to occur, but you don’t have enough money with you, a credit card could emerge as a saviour in those situations. You can easily make the rent payment through credit card and avoid the penalty for late fees as well. 

• Credit Score: A good credit score is among the many benefits of a credit card. When you make timely payments for the credit card and keep its utilisation low, you will have a good credit score. You can then easily get bigger credits in emergency situations. 

• Convenience: You can set automatic payments on your credit card. This way, you will not have to worry about missing payments or late fees. 

• Reward Points: One of the most exciting benefits of using a credit card is the reward points. Most credit cards offer points every time you pay using the card. You can then redeem those points for gifts, coupons and vouchers.

• Discount and Cashback: Many credit cards offer discounts when shopping online, booking tickets, recharging, and more from selected merchants. Sometimes, you also get cashbacks on your bill payment.  

Drawbacks of Rent Payment Through Credit Card

Paying rent with a credit card does not always have advantages. There are also many drawbacks, which you should keep in mind. 

• High Payment Fees: The major disadvantage of rent payment through credit card is the high fees. Most credit cards charge 2-3% of the rent payment as the platform fee, which can add up quickly if you pay high rent and nullify your earned rewards. 

• Interest Rates: If you fail to clear the credit card balance on time, you might be subjected to high interest rates, up to 30-40% of the amount. So, if you are unsure whether you can make the monthly payments, opting for the alternative methods is better. 

• Overspending: You can not possibly spend more than your money in your hand or your bank account. But with credit cards, you have unlimited money, at least on paper. So, it's easy to overspend when you can not see the low amount of money in your account. 

• Debt Accumulation: If you use your credit card without proper management, you might have huge debt. These debts can become overwhelming if they accumulate over time. They might be hard to pay, especially if you make only minimum payments. 

• Low Credit Score: Rent payment through a credit card can increase your credit utilisation ratio, meaning that you are using a significant portion of your credit ratio. And if you use that credit card for any other expenses as well, it will eventually lower your credit score. So maybe you can get a credit card with a higher limit or use multiple cards to distribute the expenses. 

Check out: How To Transfer Money From Credit Card To Bank Account?

How to Pay Rent with Credit Card? 

If you don’t know how to use a credit card to pay rent, worry not; I've got you covered. 

• Check if you can use credit card as a payment method

Not all the landlords or the property management companies accept rent via credit card. So, it is always better to know about acceptable payment methods in advance to avoid any worry in the future. 

• Choose a credit card provider

There are many credit card companies available, and you can choose what works best for you. Make sure to get your credit card from a reputed and trustworthy company, as the credit card holds many hidden charges. 

• Choose a platform to link the credit card

If you want to opt for a hassle-free monthly payment of your rent, choose a reliable payment gateway and link your credit card to it. 

• Set up your payment information

Enter the details of the receiver, rent amount, due date and other information, if any. You can set the payment mode to auto, and the payment will automatically be deducted from your credit card every month. 

• Keep payment record

Keeping the records of your credit card payments is equally important as making the payment itself. Make sure that your landlord receives the payment on time and record the expenses in your budget sheet as well. 

Summing Up 

Rent Payment Through Credit Card is convenient and has many benefits. However, it is crucial to manage your payments properly so that you don’t get caught up in debt. Also, there are many hidden charges in credit card bill payments, like late fees, GST, over-limit fees, annual fees, etc. Make sure to learn about them all while finalising your credit card with the provider.  

Questions You May Have 

Q. Can I pay my rent through a credit card?

Ans. You have to ask your landlord whether you can pay your rent with a credit card or not. 

Q. Which app is best for rent payments?

Ans. Paytm, PhonePe, and CRED are some of the best apps you can use to make rent payments. 

Q. How much does Cred charge for rent payment?

Ans. Cred charges around 1-1.5% fees on the rent payments. 

Q. Can we pay rent via PayZapp?

Ans. Yes, you can easily pay your rent via PayZapp and its multiple payment providers. 

Q. Can we make rent payment through credit card without charges? 

Ans. Every credit card provider charges a minimum of 1% transaction fee on rent payments. 

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