Paying rent is often the largest monthly expense for many individuals. While traditionally done via check or bank transfer, using a credit card to pay rent can unlock valuable rewards, build credit, and provide a buffer during tight financial times. However, not all credit cards are suitable for this purpose, and understanding the fees and rewards structures is crucial. This article will guide you through the best credit cards for paying rent in 2024, focusing on maximizing rewards and minimizing costs.
Best Credit Cards for Paying Rent: A Comparison
| Card Name | Key Features & Benefits | Potential Drawbacks |
|---|---|---|
| Bilt Rewards Card | Earn 1x points on rent payments (up to 100,000 points per year) with no transaction fees; 2x points on travel and 3x points on dining on the first day of every month; No annual fee. Transfer partners include airlines and hotels. | Requires rent payment through the Bilt Rewards app or website. Rent payment may not be reported as credit utilization. |
| Chase Sapphire Preferred | Earn 5x points on travel purchased through Chase Ultimate Rewards, 3x on dining, online grocery purchases (excluding Target, Walmart and wholesale clubs) and select streaming services, 2x on travel and 1x on all other purchases. Points can be transferred to travel partners or redeemed for travel through Chase Ultimate Rewards at 1.25 cents per point. | Annual fee of $95. May require a higher credit score for approval. Rent payments typically require a third-party service and incur a fee. |
| American Express Blue Cash Preferred | Earn 6% cash back at U.S. supermarkets (on up to $6,000 per year, then 1%), 6% cash back on select U.S. streaming subscriptions, 3% cash back at U.S. gas stations and transit, and 1% cash back on all other purchases. | Annual fee of $0 intro annual fee for one year, then $95. Rent payments typically require a third-party service and incur a fee, potentially negating some cashback value. |
| Capital One Venture Rewards Credit Card | Earn 2x miles on every purchase, every day. Miles can be redeemed for travel purchases or transferred to travel partners. | Annual fee of $95. Rent payments typically require a third-party service and incur a fee. |
| Citi Double Cash Card | Earn 2% cash back on all purchases (1% when you buy and 1% when you pay). | No bonus categories, so rent payments receive only 2% cash back. Rent payments typically require a third-party service and incur a fee. |
| Wells Fargo Active Cash Card | Earn 2% cash back on all purchases. | No bonus categories, so rent payments receive only 2% cash back. Rent payments typically require a third-party service and incur a fee. |
Detailed Explanations
Bilt Rewards Card: The Bilt Rewards Card is specifically designed for renters. It allows you to earn points on your rent payments without incurring transaction fees, a unique offering in the credit card landscape. This is a huge advantage as it directly addresses the main problem of paying rent with a credit card – the fees. The card earns 1x points on rent payments (up to 100,000 points per year), 2x points on travel and 3x points on dining on the first day of every month. These points can then be redeemed for travel, merchandise, or even used towards a down payment on a home. This is the most attractive option if your primary goal is to earn rewards directly on your rent payments. The key requirement is that you must pay your rent through the Bilt Rewards app or website. The application process is straightforward, and the card boasts no annual fee.
Chase Sapphire Preferred: The Chase Sapphire Preferred is a popular travel rewards card offering a wide range of benefits. While not specifically designed for rent payments, its robust rewards program and travel perks make it a strong contender. The card earns 5x points on travel purchased through Chase Ultimate Rewards, 3x on dining, online grocery purchases (excluding Target, Walmart and wholesale clubs) and select streaming services, 2x on travel and 1x on all other purchases. The flexibility of the Chase Ultimate Rewards program is a major advantage. Points can be transferred to various airline and hotel partners, significantly increasing their value. However, paying rent with the Chase Sapphire Preferred typically requires using a third-party payment service, which usually charges a fee. This fee can erode the value of the rewards earned, so careful calculation is necessary. The card has an annual fee of $95.
American Express Blue Cash Preferred: The American Express Blue Cash Preferred card is a strong contender for everyday spending, offering high cashback rates on common categories like groceries and gas. The card earns 6% cash back at U.S. supermarkets (on up to $6,000 per year, then 1%), 6% cash back on select U.S. streaming subscriptions, 3% cash back at U.S. gas stations and transit, and 1% cash back on all other purchases. This card is ideal if you spend heavily on groceries and gas. Like the Chase Sapphire Preferred, paying rent with this card usually involves using a third-party service and incurring a fee. Whether the cashback earned outweighs the transaction fee needs to be assessed based on your spending habits and rent amount. The card has an annual fee of $0 intro annual fee for one year, then $95.
Capital One Venture Rewards Credit Card: The Capital One Venture Rewards Credit Card offers a simple and straightforward rewards structure, earning 2x miles on every purchase, every day. This is a good option if you prefer a flat-rate rewards program. Miles can be redeemed for travel purchases or transferred to travel partners. Similar to other cards, paying rent with this card typically requires using a third-party payment service, which charges a fee. This fee needs to be factored into the overall cost-benefit analysis. The card has an annual fee of $95.
Citi Double Cash Card: The Citi Double Cash Card offers a flat 2% cash back on all purchases (1% when you buy and 1% when you pay). This card is a great choice for simplicity and consistent rewards. While it doesn't offer bonus categories, the 2% cash back on all purchases can be valuable. However, using it to pay rent will likely involve a third-party service fee, which will reduce the overall return.
Wells Fargo Active Cash Card: The Wells Fargo Active Cash Card offers a flat 2% cash back on all purchases. This card provides a simple and straightforward cashback structure. Similar to the Citi Double Cash, the 2% cashback is attractive but doesn't offer any bonus categories, so it's essential to consider third-party service fees when using it for rent payments.
Understanding Third-Party Rent Payment Services
Paying rent with a credit card often requires using a third-party payment service like Plastiq or RentPayment. These services act as intermediaries, accepting credit card payments and then sending the rent to your landlord via check or electronic transfer. The primary drawback of these services is the transaction fee they charge, typically ranging from 2.5% to 3% of the rent amount. Before using a credit card for rent, it's crucial to calculate whether the rewards earned will offset this fee. For example, if your rent is $2,000 and the service charges a 2.5% fee, you'll pay an extra $50. You'll need to earn at least $50 in rewards to break even.
Factors to Consider When Choosing a Credit Card for Rent
- Transaction Fees: The most crucial factor. Calculate the fees charged by the third-party payment service.
- Rewards Rate: Determine the rewards rate offered by the credit card on all purchases or specific categories.
- Annual Fee: Factor in the annual fee of the credit card.
- Credit Limit: Ensure your credit limit is high enough to cover your rent payment.
- Spending Habits: Consider your overall spending habits to maximize rewards on other purchases.
- Redemption Options: Evaluate the redemption options for the rewards earned (e.g., travel, cash back, merchandise).
- Credit Score: Ensure you have a good credit score to qualify for the best credit cards.
- Landlord Acceptance: Confirm that your landlord accepts payments through the chosen third-party service.
Strategies for Maximizing Rewards
- Choose the Right Card: Select a card that offers the best rewards for your spending habits and minimizes transaction fees.
- Pay on Time: Always pay your credit card bill on time to avoid interest charges and maintain a good credit score.
- Maximize Bonus Categories: Utilize bonus categories for other purchases to earn more rewards.
- Redeem Rewards Strategically: Redeem rewards for the most valuable options, such as travel or cash back.
- Consider a Balance Transfer: If you're carrying a balance on another credit card, consider a balance transfer to a card with a lower interest rate.
- Negotiate with Your Landlord: In some cases, you may be able to negotiate with your landlord to accept direct credit card payments without fees.
Frequently Asked Questions
- Is it worth paying rent with a credit card? It depends. If the rewards earned outweigh the transaction fees, it can be beneficial.
- Will paying rent with a credit card improve my credit score? Yes, provided you make on-time payments and keep your credit utilization low.
- Are there any credit cards that don't charge fees for paying rent? The Bilt Rewards card is the only one that waives transaction fees when paying rent through their platform.
- What are the best third-party services for paying rent with a credit card? Popular options include Plastiq and RentPayment, but fees vary.
- Can I use a credit card to pay rent if my landlord doesn't accept credit cards? Yes, by using a third-party payment service.
- What credit score do I need to pay rent with a credit card? A good to excellent credit score (670 or higher) is generally required for the best rewards cards.
Conclusion
Choosing the best credit card for paying rent depends on your individual circumstances and spending habits. The Bilt Rewards Card stands out as the only card that allows you to earn rewards directly on rent payments without transaction fees. However, if you prioritize travel rewards or cashback on other spending categories, cards like the Chase Sapphire Preferred or American Express Blue Cash Preferred may be more suitable, provided you carefully consider the impact of third-party service fees. Always calculate the total cost and potential rewards before making a decision to ensure that paying rent with a credit card is a financially sound choice.