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Yes, You Can Pay Rent With a Credit Card—These Are the Risks and Benefits

Financial experts offer their insight on this payment route.

When it comes to many people's monthly budget, rent is typically the largest expense on the list. For the millions of us renting our living spaces in the U.S., it may seem like the cost is constantly getting higher and higher—making it a harder bill to maintain every month. But as various financial companies have started encouraging people to pay their rent with a credit card, some may see this as the answer to paying on time as pricing pressures mount. This isn't always a fail-safe solution though, according to financial experts. Read on to find out what they say are the risks and benefits of paying your rent with a credit card.

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Millions of people have been falling behind on rent recently.

Pay Rent Note Made Using Red Marker In Paper Calendar

As inflation soared to new heights last year, it took a clear toll on many people's ability to make their monthly payments.

A 2022 report from the commercial real estate site MyEListing found that about 15 percent of people in the country—or roughly six million U.S. households—were behind on their rent payments in the fall. In certain states, this percentage increased to nearly 25 percent of renters.

This in part can be blamed on the fact that the cost to rent an apartment went up by 17.6 percent in 2021. "The ever-increasing cost of rent is causing financial hardship for a relatively large percentage of the population in each state," MyEListing wrote in their report.

But financial companies are pushing credit card services to pay this expense.

BILT Mastercard isolated on blurred background. Renters earn rewards points on rent payments and other spending categories with this credit card issued by Wells Fargo.

Some people may attempt to avoid this problem by taking advantage of a rising trend among renters: using a credit card.

"In the recent years, I've seen how paying rent with a credit card has slowly gained traction," says Joel Comino, who has worked with numerous landlords as the founder of home-building company Next Modular.

This trend has been partly driven by financial companies launching credit card programs that push younger people to consider covering large expenses like rent this way, BuzzFeed News recently reported.

Jack Lamarre, a 24-year-old social media manager living in San Francisco, told the news outlet that he started paying for his $2,600 monthly rent with his credit card after signing up for a new Wells Fargo credit card that encourages this.

The well-known financial company partnered with Bilt Rewards and Mastercard in 2022 to "issue the first credit card that earns points on rent payments without the transaction fee," as stated by a press release. In other words, using the Bilt Mastercard from Wells Fargo allows renters to bypass any transaction fees landlords may charge for credit card payments.

But a quick Google search shows that this is not the only financial company pushing credit card services designed for paying rent. Melio and Plastiq are two popular offerings in this space as well.

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There are benefits to paying your rent with a credit card.

Close up hands of a woman giving bank credit card to man.

This trend isn't rising without reason. After all, there's the obvious benefit to paying with a credit card—which is that you can make your rent payment on time even if you don't have enough money in your bank account at that moment.

"The most significant benefit of paying the rent with credit cards is that you can honor the rental obligation even when you do not have liquid funds," says Tom Koesternen, a chartered financial analyst who works as a consultant for The Guaranteed Loans. "The credit card option allows you to pay now and repay later."

But that's hardly the only benefit. Renters can earn rewards and bonuses by paying with their credit card each month too, says Bill Ryze, a certified chartered financial consultant from Tennessee and a board advisor at Fiona. "You can later redeem the reward points you earn and enjoy great discounts," he explains.

Ryze notes that paying rent with a credit card can also help improve your credit history, in turn boosting your credit score. "Most young people struggle with their credit scores because they lack a credit history," he says. "So, if you are young, using your credit card to pay rent can build your history."

But experts warn that this can also come with risks.

Young woman doing an online shopping for new home

These benefits might make paying your rent with a credit card seem like a no-brainer—until you consider the risks, that is.

Jake Hill, a finance expert and the CEO of DebtHammer, tells Best Life that this can quickly and easily become a "disaster rabbit hole for debt."

"I would never recommend people to follow through with this," Hill says. "If you are already prone to carrying over a large balance each month and struggle to achieve a debt-free lifestyle, then this credit card would only lead you to more despair and distress."

This is why Jeanne Kelly, a credit coach with over 20 years of experience offering personal services, says you should only consider this strategy if you are sure you can pay off your credit card's balance every month. "You risk the possibility of accruing interest charges if the balance is not paid off in full before the due date," she warns.

You should also pay attention to credit utilization, which is the percentage of your credit limit you're using, according to Kelly. "If using your credit card for rent causes your credit utilization to increase significantly, it could have a negative impact on your credit score," she explains.

So at the end of the day, "whether the benefits outweigh the risks of paying the rent with a credit card depends on individual circumstances and preferences," says Marcus Arcabascio, the chief financial officer of USA Credit Unions. "Ultimately, it's best to weigh the pros and cons before deciding whether paying the rent with a credit card is right for you," he advises.

Best Life offers the most up-to-date financial information from top experts and the latest news and research, but our content is not meant to be a substitute for professional guidance. When it comes to the money you're spending, saving, or investing, always consult your financial advisor directly.

Kali Coleman
Kali Coleman is a Senior Editor at Best Life. Her primary focus is covering news, where she often keeps readers informed on the ongoing COVID-19 pandemic and up-to-date on the latest retail closures. Read more
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