If you’re having difficulty paying your rent during the pandemic, you’re not alone. With many tenants still owing back rent and struggling to keep current, many have found that paying with a credit card can make it easier. For those who need additional time at the beginning of the month, or those who want to continue paying without a buildup of rent, late fees, and interest, it can be beneficial. Read on to learn about paying your rent with your credit card and whether it’s the right move for you.
The Advantages of Paying Your Rent with a Credit Card
While using your credit card for rent payments has many benefits, one of the most basic advantages is that it offers flexibility and convenience. An obvious plus is that you don’t have to put up with the hassle of a check and wait for it to be cashed.
Here are some other advantages to using your card for rent payments:
- You Get More Time: Since credit cards are paid off when you get your monthly statement, paying rent with your card can offer you some financial breathing room. Your pay schedule may such that you receive your paycheck later in the month while the rent is due on the first.
- Reward Earnings: You can get cash back and 0 % APR (no interest on balances or transfers for a certain time period). Travel rewards also apply, even if you can’t get much use during the pandemic.
- You Can Build Up your Credit Score: If you are just developing your score or trying to recover, making rent payments on-time will help you establish good credit.
The Disadvantages of Paying Your Rent with a Credit Card
While paying your rent with a credit card offers convenience and flexibility, it may not be the best option for you. Consider the following disadvantages:
- Additional Fees: The cost of the processing fee can eliminate any reward earnings; there are also processing fees for the convenience of using a card. However, you may think about connecting your bank account for an ACH transfer that won’t include a fee.
- Interest Payments: When you don’t pay your credit card bill in full every month, the interest payments can really add up.
- Negative Impact on Your Credit Score: If you have a low limit or your income is shaky, paying your rent with a credit card can be a risk: It can harm your credit score if you don’t pay it off in time. It can impact your score by increasing your credit utilization ration. This is the total amount of debt you carry compared with the amount of available credit you have.
If you know you might have trouble paying your rent, then you may want to approach your landlord about it and try to make an arrangement like a payment plan.