Should You Pay Rent with a Credit Card?

When weighing different rent payment methods, a few common options come to mind: paper check, bank transfer, and debit card. But have you ever considered paying rent with your credit card? 

By and large, rent is the most significant payment most people make every month — data from the American Community Survey (ACS) 5-year estimates revealed that over 19 million U.S. renter households, representing a significant portion of the total renter population, spent more than 30% of their income on housing costs.

For responsible cardholders, paying rent on a credit card can be a great way to earn points and rewards, manage cash flow, and avoid costly late fee penalties. 

As a free financial platform built specifically for renters and landlords, Azibo provides welcome flexibility for rent payments — allowing you to pay rent online for free using your bank account or debit card, or use a credit card for a small 2.99% processing fee.

7 benefits of paying rent with a credit card 

Curious to explore the benefits of paying rent with a credit card? Let's take a closer look.

1. Earn credit card rewards

Credit card points. You know them, you love them, and — if you're like most consumers — you want more. And for a good reason: credit card rewards offer enticing benefits such as coveted travel discounts, gift cards, or even cash back. A Wells Fargo study reveals that credit card rewards are helping many Americans ease concerns about rising inflation, with nearly half of rewards cardholders (49%) relying on their accumulated points to offset the costs of everyday purchases.

Today, entire websites are devoted to helping people maximize their credit card points. Arguably the most popular is The Points Guy. "Using a debit card has no point. Pun intended," explains one blog post. "By using a debit card, you're spending money and not getting anything back in return. When you use a credit card, though… you're earning valuable points and miles you can use on your next vacation."

Putting large monthly rent payments on your credit card can be a strategic way to quickly rack up more points — offsetting Azibo's 2.99% processing fee with a range of potential rewards or cash back. 

Of course, careful spending is a must — the best way to earn credit card points is to pick the right credit card and use it responsibly. 

2. Get your signup bonus faster

Did you activate a new credit card that offers a signup bonus? Paying rent with that credit card can help you hit the minimum spend — and start redeeming rewards — faster. 

For example, say your new credit card promises a signup bonus of 80,000 points if you spend $3,000 in the first three months, and your monthly rent costs $1,500. If you use this credit card to pay rent, you'll hit your minimum spend in just two months — with 80,000 bonus points to show for it. 

3. Enjoy month-to-month payment flexibility

We know that no two renters — and no two months — have the same financial situation. That's why Azibo gives you the flexibility to pay rent via debit card, credit card, or ACH bank transfer. 

As mentioned earlier, paying rent with a credit card can be an appealing solution for those looking to collect points and earn rewards. But if cash is tight, you can consider putting your rent on a credit card, so you can pay it off at a later date. For example, most credit cards give you 30 days to pay off your balance without interest, helping you bridge to your next paycheck if needed. Just be careful to pay your next credit card bill in full to avoid those interest payments. 

Renters should be able to choose the payment method that works best for them. That's why Azibo offers flexible options, so you can decide what makes sense for your financial situation each month. 

Remember: responsible financial planning is a must, no matter which method you select to pay your rent. Before using a credit card to pay rent, make sure you have the means to pay your next credit card bill on time to protect your credit score.

4. Avoid late fees with a backup payment method

At Azibo, we're committed to enhancing the renter experience. One way we achieve this? Help renters avoid late fees by allowing them to select a backup payment method. 

Say your primary payment method is bank transfer, but this month's rent deadline slips your mind. With your credit card already saved as the backup payment method in Azibo, you can easily update your rent payment method to your credit card — saving you from any potential late fees and helping you maintain a positive relationship with your landlord.

5. Manage your cash flow

When used wisely, credit cards can be a helpful tool for conserving cash flow. For business owners, paying rent on a credit card allows them to use cash from this month to invest in marketing or additional inventory to grow the business. 

The same holds true for individual consumers outside of the business world. Perhaps you have a big expense coming up next month, like an international vacation or a friend's wedding, and want to have extra cash on hand. Or you may have an unforeseen expense, like a car repair, and need to use your cash to pay that bill this month. 

Putting rent on your credit card means you can delay having to make an actual cash payment until your next credit card bill, which can be a good option for both business owners and individuals. 

6. Streamline your expenses and financial tracking

You can effortlessly stay updated on your housing-related expenses by including your rent payment on your credit card statement alongside your other transactions. This seamless approach simplifies tracking your living costs and enables effective budget management.

With the convenience of having all your housing expenses consolidated in one place, you gain a stronger sense of financial control. This newfound control empowers you to make informed decisions about your spending habits. You'll have a clear and concise overview of your housing expenses, allowing you to monitor your financial progress, identify potential areas for savings, and ensure that your housing payments align with your broader financial goals.

7. Building credit for financial independence

Many renters would love to buy a house one day or the car they really want but struggle to get the good credit needed to make that possible. Part of the problem is that paying rent on time historically has no impact on a renter's credit capacity or score. 

To establish credit and maintain a strong credit score, one of the simplest approaches is to responsibly use credit cards and other types of loans, paying them off completely when the monthly bill arrives.

The great news is that Azibo now offers renters the ability to enhance their credit score by reporting their rent payment history to the credit bureaus, even if rent is not paid with a credit card.

Introducing Azibo Credit Boost, a valuable service that acknowledges the importance of your rent payments in bolstering your credit score. By reporting your on-time rent payments to major credit bureaus, Azibo empowers renters to build their credit scores and unlock a range of benefits. These advantages include accessing lower interest rates for consumer loans like car loans and mortgages, securing higher credit limits on credit cards, and making your rental application stand out to potential landlords.

Important caveats to consider before using your credit card to pay rent

Now that we have covered the many benefits, we will briefly review the key things to consider before using your credit card for rent payments. Take a moment to consider these factors:

• Interest rates: Remember that credit cards often come with higher interest rates than other borrowing options. If you’re planning to not pay off your balance every month, take a look at the interest charges and weigh them against the benefits of using your credit card for rent payments.
• Rewards and benefits: Check out the rewards and benefits offered by your credit card for paying rent. Are you earning valuable points, cash back, or other perks that make it worth it? Consider whether the advantages outweigh any fees or processing costs involved.
• Credit limit and utilization: Pay attention to your credit card's available limit. Using your card for rent shouldn't push you beyond the recommended 30% credit utilization ratio, as that can impact your credit score. Stay within a healthy range.
• Fees and charges: Make sure you're aware of any fees associated with using your credit card for rent payments. Some cards may have transaction or processing fees specifically for rental payments. Consider whether the benefits outweigh the costs.
• Cash balance: Can you comfortably pay off your credit card balance on time? Ensure you have enough funds to cover the rent payment when your credit card bill is due. Late payments can result in extra charges and potential damage to your credit score. Be confident in your ability to manage your credit card payments responsibly before paying rent on a credit card.
• Landlord approval: Not all landlords or rental agencies accept credit card payments for rent. Before proceeding, double-check with your landlord to ensure they're open to this payment method.

Is paying rent with a credit card right for you?

If you pay your bill in full every month, paying rent on a credit card through Azibo can be a great option — helping you rack up rewards and manage your cash flow while offsetting the 2.99% processing fee.

However, it's critical to recognize your financial limits and only use a credit card if you have the means to do so. Going into debt to pay rent is never a wise decision and will negatively impact your credit score while spurring steep interest payments. 

At the end of the day, there's no one-size-fits-all solution — but with the right planning, you can find the best rent payment method for your financial situation.