Should You Pay Rent with a Credit Card?

 Post by Azibo Team on May 6, 2021

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

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

By and large, rent is the largest payment most people make every month — according to the U.S. Bureau of Labor Statistics, housing accounts for one-third of the average consumer’s annual spending

For responsible cardholders, paying rent on a credit card can be a great way to earn points and rewards, manage cash flow, and avoid expensive 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 by debit card or credit card for a small 2.99% processing fee. 

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 of them.

In one U.S. consumer payment study, 79% of credit card holders named rewards as the most attractive feature of their preferred card. And for good reason: enough points can score you coveted travel discounts, gift cards, or even cash back. 

Today, there are entire websites 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 the 2.99% processing fee with a range of potential rewards. 

Of course, careful spending is a must. As one financial writer shares, “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

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

The easiest way to build credit and maintain a good credit score is to use credit cards and other forms of loans — and then pay them off in full when the bill comes each month.

But there’s good news — renters who use Azibo now have the ability to send their rent payment history to the credit bureaus in order to build their credit score (even if you don’t pay rent with a credit card). Azibo partners with Esusu to help renters establish or build credit scores by demonstrating a history of on-time rent payments. You can sign up for Esusu through the Azibo Marketplace and use promo code Zibo2021 for an exclusive 10% discount. 

Important caveats to consider 

If you pay your bills in full every month, paying rent on credit card can be a great option — helping you rack up rewards and manage your cash flow while offsetting Azibo’s 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. 

Credit cards provide a flexible, convenient, and even lucrative way to pay rent if you know that you can pay off your balance each month. 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.

Ready to explore flexible online rent payment options?

Interested in inviting your landlord to join Azibo so you can start paying rent online? 

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Want to know what the Azibo experience looks like for your tenants? Read our blog post How Do Renters Sign Up for Azibo? for instructions on the Azibo renter sign-up process.

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