Email FacebookTwitterMenu burgerClose thin

The Pros and Cons of Paying Rent With a Credit Card

Byline profile imageWritten by Rebecca Lake, CEPF®
|
Byline profile imageEdited by Jeff White, CEPF®
Updated on
| fact checked badgeFact Checked
SmartAsset maintains strict editorial integrity. It doesn’t provide legal, tax, accounting or financial advice and isn’t a financial planner, broker, lawyer or tax adviser. Consult with your own advisers for guidance. Opinions, analyses, reviews or recommendations expressed in this post are only the author’s and for informational purposes. This post may contain links from advertisers, and we may receive compensation for marketing their products or services or if users purchase products or services. | Marketing Disclosure
Share

If you normally use your credit card to earn rewards on the things you buy every day, charging your monthly rent payment can be a quick way to rack up even more points or miles. Paying your rent with a credit card is certainly more convenient than writing out a check each month, but it comes with certain drawbacks. Here are some advantages and disadvantages to keep in mind if you decide to use plastic to cover your housing costs.

A financial advisor can help you create a long-term financial plan.

Pro: It Can Help You Build Your Credit

Paying rent with a credit card can be an effective way to strengthen your credit profile, as long as you manage your balance responsibly. Each on-time payment you make contributes to a positive payment history, which is one of the most influential factors in your credit score. Using a card for such a large recurring expense can also help keep your account active and demonstrate consistent usage, both of which can support long-term credit growth.

The key is paying the balance in full every month so the benefits of credit building aren’t overshadowed by interest charges or rising debt. If you’re unsure whether this strategy fits your financial situation, a financial advisor can help you weigh the risks and rewards.

Related Article: How to Really Read Your Credit Report

Con: Your Score Could Go Down If You Carry a Balance

Rent is typically the largest expense most people have, so if you’re charging several hundred (or thousand) dollars each month, your balance is going to balloon quickly if you’re not paying the card in full on the due date. The more of your credit line you’re using, the higher your credit utilization ratio will be. And that can knock points off your credit score. Ideally, it’s wise to aim to use no more than 30% of your available credit at any time.

The other thing to keep in mind if you’re carrying a balance is that you’re going to pay interest on it, making your rent that much more expensive. Unless you’ve got a 0% interest card or you’re absolutely sure you can pay it in full each month, you might be better off sticking to a check or debit card.

Try out the SmartAsset rent vs buy calculator.

Pro: It’s Easier to Split Rent Payments With a Roommate

Using a credit card to pay rent can simplify the process of dividing costs with a roommate, especially when your schedules or cash flow don’t always line up. Instead of coordinating exact transfer amounts on the same day or waiting for someone to reimburse their share, one person can make the full payment on a card and settle up afterward.

This approach can also reduce the risk of late payments if one roommate forgets or is temporarily short on funds. For renters who value convenience and want a clear record of who paid what, a credit card can make shared housing expenses much easier to manage.

Con: It’s Not Free

The Pros and Cons of Paying Rent With a Credit Card

While paying rent with a credit card can be convenient, it often comes with processing fees that add real cost to your monthly housing bill. Many landlords and third-party platforms charge around 2% to 3% per transaction, which can easily outweigh any rewards or cash back you might earn.

Those fees effectively raise the price of your rent, and if you carry a balance, interest charges can make the transaction even more expensive. Before choosing this option, it’s important to add up the true costs and decide whether the convenience is worth the extra money each month.

Bottom Line

The Pros and Cons of Paying Rent With a Credit Card

Paying rent with a credit card can offer convenience, flexibility and even the chance to earn rewards, but those benefits only hold up if you can pay off your balance in full each month. The processing fees many landlords or payment platforms charge can outweigh any points or cash back you earn, and carrying a balance can quickly turn convenience into high-interest debt. For some renters, using a card strategically can help smooth out cash flow or build credit, but it’s not a one-size-fits-all solution.

Tips for Financial Planning

  • A financial adivosr can help you better plan out your finances for the future. They can help with budgeting, retirement planning and other long-term needs. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • By using a budget calculator, you can see how others in your zip code are budgeting their money to see how it might help your own planning.

Photo credit: ©iStock.com/gpointstudio, ©iStock.com/Squaredpixels, ©iStock.com/Marco_Piunti