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Pros, cons of paying rent with your credit cards

Toni Husbands

Charging your rent can be a savvy way to rack up rewards, but is it worth the added cost of paying by plastic?

For some millennials I spoke with, a generation that has grown up in a world in which electronic payments are the norm, the answer is yes.

Miranda Marquit, a freelance writer with PlantingMoneySeeds.com, has paid her rent with credit cards for the past two years since returning to Idaho. “The main benefit is that I receive points for paying with a credit card. Each month, that’s 1,000 points. Just paying with a credit card means one free plane ticket a year,” she says.

Kerri Moriarty, a Boston-based co-founder of Cinch Financial, says she was pleasantly surprised to get a 2 percent discount from her landlord when she put her rent on her credit card. On top of that, she says she earns $24 cash back each month on her rent of $1,200.

Mike Gnitecki, in East Texas, also pays his rent with by credit cards. “I pay a fee, but I also get cash back or miles from my credit cards,” Gnitecki says.

If your landlord doesn’t directly accept credit cards, you still have options. Plastiq, RentMoola, and PayPal allow you to score credit card rewards while paying your rent on time.

PayPal, RentMoola and Plastiq charge a service fee of 2.9 percent + 30 cents, 2.99 percent, and 2.5 percent respectively for U.S. credit cards. That would add $25-$30 a month to your rent of $1,000.

Check with your property manager first to compare the potential fees, and then determine if your credit card rewards and annual fees make the math work.

Matthew Massee, a marketing specialist for Utah Advocates injury attorneys in Salt Lake City, ran the numbers, and paying rent with a credit card works in his favor. “There is a $3 fee to pay rent with a credit card, but that is only $36 a year. I profit $84 if I get only 1 percent cash back – $120 a year,” he says.

Another plus of paying your rent with your credit card? You can also build a positive credit score history each month when you pay your credit card bill. This strategy can backfire, though, if you don’t pay your credit card bills on time or in full.

Massee says he has had no problems paying all of his family’s fixed expenses with his credit cards to capitalize on miles and cash back rewards. For him, the convenience of paying with his cards also helps his family to keep spending in check.

“I can easily pay all of my bills on a single card, rack up rewards, then use my checking account to pay the credit card bills,” he says. “This way I never have overdraft fees, and I can clearly see my monthly expenses, which helps my wife and I keep track of our budget.”

See related: Paying a utility bill on a rewards card to earn points, 8 creative ways to build credit card rewards points quickly

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