When Should You Use A Credit Card To Pay Your Rent

Credit card companies are targeting Gen Z and making it easier to use a credit card to pay rent. The Bilt Mastercard, for example, is designed to let you earn rewards when you pay rent – fee-free. But is paying rent with plastic actually a good idea? Before diving into the best credit cards for utility and bill payments, here are a few factors to keep in mind.

The benefits of paying for rent with a credit card

Credit cards often come with rewards programs, offering cash back, airline miles, or other perks for every dollar spent on rent. Since rent is probably your most significant expense, these rewards can really add up over time, especially if you leverage introductory offers that come with generous bonuses. Additionally, paying rent with a credit card can help build or improve your credit history, as timely payments contribute positively to your credit score.

The dangers of using a credit card to pay rent

Using a credit card to pay for rent comes with certain risks. One significant danger is the potential for accumulating high-interest debt if you carry a balance on your card. Interest rates are higher on credit cards which means your balance may be bigger every month. There are also processing fees involved for paying rent with a credit card – this can offset the benefits of earning potential perks.

Also, if you miss a payment, it can negatively impact your credit score and lead to late fees or penalty interest rates. Overspending can be a risk as well, as the availability of credit may tempt you to charge more than you can afford, leading to financial strain.

When should you use a credit card to pay your rent?

Using a credit card to pay for rent can be a good idea if those two conditions are met: 1) You are able to pay off the balance in full every month and 2) you’ll earn more in rewards than whatever processing fee is involved in the transaction. If you don’t trust yourself with credit or don’t have an emergency fund built up, it may not be worth it.

Bottom Line

Just because you can pay for rent with a credit card doesn’t mean you should. On the other hand, with the right card and the right approach, it can help you earn significant rewards. Do your research first.