Paying rent is one of the biggest monthly expenses for most people, but what if I told you there’s a way to make this chore more enjoyable and rewarding? Pay rent with credit cards! Not only can this method be incredibly convenient, but it can also help you earn rewards and even improve your credit score. Intrigued? Let’s dive into the details!
Why Pay Rent with Credit Cards?
Paying rent with a credit card offers several advantages:
- Convenience: Automate your monthly rent payments, ensuring you never miss a due date. No more writing checks or setting reminders.
- Rewards: Earn reward points, cashback, or miles with each rent payment. This can add up quickly, especially with large transactions.
- Credit Score Boost: Regularly paying your rent with a credit card and paying off the balance on time can positively impact your credit score.
- Emergency Fund: Using a credit card for rent gives you a financial cushion in case of an unexpected expense, giving you time to gather funds without missing rent.
- Interest-Free Period: Enjoy an interest-free period on your rent payment, ranging from 20 to 55 days depending on your credit card’s billing cycle.
Platforms to Automate Rent Payments via Credit Cards
These services streamline the process, ensuring timely payments and often providing added benefits such as rewards and cashback. Here are some of the notable providers:
1. Redgirraffe (RentPay): Redgirraffe’s RentPay service allows users to automate their rent payments using credit cards. The platform charges a low processing fee of 0.39% plus GST.
2. NoBroker: This real estate application enables users to pay rent using their credit cards. NoBroker supports Mastercard and Visa, and the payments can be automated through their app, ensuring timely transfers to landlords’ accounts.
3. Freecharge: Operated by Axis Bank, Freecharge offers a simple way to pay rent via credit cards. Users can set up recurring payments, making managing their monthly rent obligations easier without the hassle of manual transactions.
4. Housing.com: This platform facilitates rent payments through credit cards with a user-friendly process. Payments are typically settled within an hour, and the app offers an easy setup with minimal documentation requirements.
5. CRED: Pay rent with credit cards and earn exciting deals and discounts on the CRED app. Making rent payments through credit cards offers dual benefits – you get an interest-free credit period on rent and earn CRED reward coins.
6. PayZapp: While PayZapp is not a standalone app/wallet to pay rent through a credit card, it connects with other major services to make rent payments. For example, PayZapp has the option to pay rent through RedGirraffe and get additional cashback/points. Additionally, the PayZapp wallet can be used to pay rent on NoBroker and avail of an additional 5% cashback (as of now). PayZapp covers these two major services by allowing users to pay rent through them.
rent through a credit card? Feel free to share your thoughts in the comments below.
How to Pay Rent with a Credit Card?
Here’s a step-by-step guide to paying your rent with a credit card:
- Check with your landlord or property management company to see if they accept credit card payments. If they don’t, look for third-party services like CRED, NoBroker, or Housing.com that facilitate rent payments via credit cards.
- Create an account on your chosen platform and link your credit card.
- Provide your landlord’s details, such as their bank account information or UPI ID, along with the rent amount and due date.
- Double-check the details and confirm the payment. Be mindful of any processing fees ranging from 1% to 3% of the transaction value.
- Ensure the payment is received by your landlord. Most platforms provide notifications or receipts for your records.
Drawbacks to Consider
While paying rent with a credit card has many benefits, there are some potential drawbacks:
- High Fees: Transaction fees can be a significant cost, sometimes outweighing the benefits.
- Interest Charges: If you don’t pay off your credit card balance in full, interest charges can accumulate quickly.
- Debt Risk: Using credit cards without proper financial management can lead to a cycle of debt.
- Credit Score Impact: Paying rent with your credit card can impact your credit utilization ratio, an important factor in determining your credit score.
- Processing Fee: Banks generally charge a processing fee for rent payments made via credit card, typically ranging from 1% to 3%. Ensure the rewards you earn outweigh these costs.
Comparison of Credit Cards for Rent Payments
Here’s a detailed comparison of some popular credit cards for rent payments, including the GST charges on the processing fee and information about reward points:
| Credit Card | Processing Fee | GST on Processing Fee | Total Fee (Processing + GST) | Reward Points on Rent Payments | Additional Notes |
| HDFC Bank Credit Card | 1% of transaction value | 18% on 1% (0.18% total) | 1.18% of transaction value | No reward points | Avoid rent payments |
| ICICI Bank Credit Card | 1% of transaction value | 18% on 1% (0.18% total) | 1.18% of transaction value | No reward points | Avoid rent payments |
| Axis Bank Credit Card | 1% of the transaction value (Max: ₹1500) | 18% on 1% (0.18% total) | 1.18% of transaction value | No reward points | Avoid rent payments |
| Yes Bank Credit Card | 0.5% of transaction value | 18% on 0.5% (0.09% total) | 0.59% of transaction value | No reward points | Consider if you’re looking for lower fees |
| RBL Bank Credit Card | 1% of transaction value | 18% on 1% (0.18% total) | 1.18% of transaction value | No reward points | Avoid rent payments |
| Kotak Mahindra Credit Card | 1% of transaction value | 18% on 1% (0.18% total) | 1.18% of transaction value | No reward points | Avoid rent payments |
| IndusInd Bank Credit Card | 1% of transaction value | 18% on 1% (0.18% total) | 1.18% of transaction value | No reward points | Avoid rent payments |
Explanation of GST Charges
- GST Rate: The current GST rate on financial services in India is 18%.
- Calculation: The GST is calculated on the processing fee charged by the bank. For example, if the processing fee is 1% of the transaction value, the GST on this fee would be 18% of the 1%, which is an additional 0.18%.
Example Calculation
- HDFC Bank Credit Card: If your rent is ₹20,000, the processing fee would be 1% of ₹20,000, which is ₹200. The GST on this ₹200 fee would be 18%, which is ₹36. Therefore, the total fee including GST would be ₹200 + ₹36 = ₹236.
How to Maximize Rewards and Benefits When Paying Rent with a Credit Card
- Choose the Right Card: Select a credit card that offers the most rewards for rent payments.
- Pay-Off Balances: Always try to pay off your credit card balance in full each month to avoid interest charges.
- Consolidate Expenses: Use the same card for other expenses to maximize reward points.
- Time Your Payments: Schedule payments to maximize the time you have to pay off your credit card bill.
- Utilize Bonuses: Take advantage of sign-up bonuses and introductory offers to optimize your credit card gains.
Should you pay rent through a credit card?
It depends on which credit card you hold. Ideally, you should, as the benefits are well worth it. However, not everyone has premium cards, which can be a problem. If you don’t have cards that give you returns as equal to or more than the service fee, there is no point in using credit cards for paying rent. Most premium and super-premium credit cards provide enough rewards to cover the service fee.
Paying property rent with a credit card has advantages such as earning rewards and ensuring timely payments. However, it also has disadvantages and success depends on the user’s spending and payment habits. By choosing the right platform and credit card, and managing your finances wisely, you can turn your monthly rent payment into a rewarding experience.
So, next time you pay your rent, why not make it work for you? Explore the options, choose a platform, and start enjoying the perks of paying rent with your credit card today!
Note: The credit card interest rates and charges are subject to change.
