Our new townhouse allows us to pay rent on a credit card!! None of the places we’ve lived so far has made that option available to us, and at our current place we actually have to mail paper checks, if you can believe it. But after we move in two weeks we’ll have the opportunity to charge an extra $870 per month!
Why are we excited about this? Putting rent on a credit card seems like a terrible idea! Well, if you can’t afford your rent and/or don’t pay your credit cards off in full every month, it is a terrible idea. But our rent is very affordable – obviously we pay it every month with no issues – and we have a perfect track record in paying our credit cards in full, and in the month we spend the money rather than the month the bill is due. So for that part of things, putting the rent on a credit card is, to us, the same as paying with a check. So what are the advantages and disadvantages?
The advantage is credit card rewards, and the disadvantage is transaction fees. The fees are well-defined by the property management company – 3.35% of the transaction. The credit card rewards are a bit more nebulous. For our 1% rewards base card, we would only generate $8.70 in rewards, so that isn’t worthwhile against $30 in fees. However, putting rent on a rewards credit card could enable us to reach minimum spend amounts to achieve signup bonuses.
I’ve been learning a bit about credit card churning from Jacob and Holly, but one deterrent for us participating (aside from not knowing how to use miles!) is that we probably wouldn’t be able to meet some of the higher minimum spending requirements. In a typical (not using targeted savings much) month we only put four or five hundred dollars on our credit cards, so that’s not much progress toward a multi-thousand dollar minimum spend. I have been thinking that we would wait until we were about to book a trip or otherwise make some large expenditures before applying for our next rewards card with a big signup bonus. However, now that we can put rent on a credit card, those charges will go a long way toward helping us qualify for those lucrative signup bonuses, so perhaps we can consider a new card sooner.
We will have to be really careful if we do use the rent toward signup bonuses not to make any mistakes. One mistake would be inaccurately predicting our spending and thinking we needed the rent charge toward the minimum spend when we didn’t, thus incurring more fees than absolutely necessary. Another mistake would be forgetting to switch our payment method from the credit card back to a paper check or whatever.
We’re going to give the idea of putting our rent on a credit card really careful consideration before doing it. If we choose to incur any fees we’ll have to be absolutely sure that the rewards are worth it and totally on top of where the next payment is coming from.
Have you or would you ever put your rent on a credit card? How far have you gone to get credit card rewards or signup bonuses?