A lot depends on the rewards and your financial discipline
of ConsumerAffairs
The cost of rental housing is near a record high, usually a household's largest monthly expense. So some people have begun paying their recent with a rewards credit card.
The Wall Street Journal recently reported that a couple in Ohio who put their rent on their American Express card accumulated enough points to pay for two roundtrip tickets to Japan.
Daniel Cohen, founding partner of Consumer Attorneys, says for some people, paying rent with a credit card is a savvy move. Yes, you are likely to encounter fees but with the right card, the rewards can outweigh the extra cost. Plus, there could be other benefits.
For some, the convenience that comes from not having to write a check, find a stamp, and walk to a mailbox might make any additional fees worth it, Cohen told ConsumerAffairs.
That allows you to hold onto your money for another week or two after the rent is paid. But failing to pay off the entire amount each month can wipe out any financial benefit, burying the renter in additional high-interest credit card debt.
A lot depends on your landlord
Still, if you have the financial discipline to keep the balance at $0 at the end of the billing cycle, there could be some benefits. But Cohen says a lot depends on your landlord.
If your landlord accepts credit card payments and doesnt tack on fees, your decision becomes easier, especially with a credit card with big rewards. But landlords like this are extremely rare, Cohen said.
Merchants, or in this case, landlords, need to pay the credit card processing fees, which usually range between 1.5 and 3.5%. Most landlords will pass this fee on to their tenants.
Cohen says corporate landlords with multiple properties and hundreds, even thousands of tenants, will likely use a third-party service to facilitate rent payments by credit card. Apps like RentPayment, AppFolio, and RentTrack function like PayPal or Venmo for landlords and typically charge between 2.5% and 3.5% transaction fees.
If your rent is $2000 and youre charged a 3.5% fee, you pay an extra $70 in rent. It may be hard to find a credit card whose rewards make that worthwhile.
Photo Credit: Consumer Affairs News Department Images
Posted: 2024-06-24 10:54:58
