Rent Payment Using Your Credit Card: Renting a home is a common practice for many individuals, and the monthly rent payment often represents a significant portion of their expenses. In the past, cash payments were the preferred method for landlords, while some tenants used NEFT, IMPS, and other traditional means. However, the landscape has shifted towards digital, paperless transactions, with credit card payments gaining popularity.
In the wake of the COVID-19 pandemic, digital transactions surged, prompting people to explore alternative methods of paying their rent, such as using credit cards, mobile wallets, and third-party applications. This article delves into the intricacies of paying your rent with a credit card, covering the process, associated fees, offers, and more.
Latest Offers on Rent Payments – November 2023 Update
Freecharge
Win up to 3% reward points on successful rent payments through Freecharge.
Paytm
Get up to Rs. 300 cashback when making your rent payment with Paytm using the code “Sale300.” Additionally, you can use the promo code “RENT200NEW” to receive a Rs. 200 discount on your house rent payment.
CRED
When you pay your rent with your credit card on CRED, you stand a chance to win a cashback of up to 100%. To participate in this offer, you need to redeem 10,000 Cred Coins. This offer is applicable once for each user every month. Plus, enjoy free Acko home appliance protection for items like TVs, ACs, washing machines, and fridges less than five years old. Your cover will renew with each monthly rent payment via CRED, featuring a minimum copay of 30%. This offer is valid after 15 days of activation.
No Broker
Get a chance to win 100% cashback on processing fees when making your rental payments. The maximum cashback available is 100% of service fees, up to Rs. 750. This offer is valid until the 30th of November 2023. For every 100th customer who successfully completes a rent payment transaction on NoBroker Pay, a cashback of Rs. 100 will be awarded. Additionally, every 1000th customer who successfully completes a rent payment transaction on NoBroker Pay will receive a flat cashback of Rs. 1000. To qualify for this offer, the minimum transaction amount must be Rs. 10,000 or higher. This offer is valid until the 30th of November 2023.
RedGirraffe
Make your rental payments and earn 5% of the total transaction value as RedGirraffe CASH Points. The maximum cap is set at 3,000 RedGirraffe CASH Points.
Best Credit Card for Rent Payment
What to Consider Before Making Rent Payments with Your Credit Card
Before you decide to pay your rent with a credit card, there are several crucial factors to consider:
Impact on Credit Score
Rent payments typically involve a substantial amount of money. When you use your credit card for rent, your credit utilization ratio increases, which can negatively impact your credit score.
Processing Fees
Credit card companies and banks charge transaction or processing fees when you make a rent payment using your credit card. These fees can range from 1% to 5%, meaning you’ll incur a significant expense if your rent is high.
Interest
Credit cards come with high-interest rates. Failing to pay your credit card bill on time results in accumulating high-interest charges. When using a credit card for rent, it’s essential to ensure you can clear your dues promptly.
It’s critical to address these factors because mishandling credit card rent payments can harm your credit score and lead to excessive interest payments. Only opt for credit card payments if you are confident about your ability to pay off your bills on time.
Pros of Paying Rent via Credit Card
There are several advantages to making your rent payments through a credit card:
Benefits & Reward Points
Many credit cards offer various advantages and reward points when you use them for expenses. You can earn reward points by paying your rent with a credit card, which can be redeemed for cashback, flight/hotel bookings, product purchases, gift vouchers, and more. Some card issuers also provide exclusive offers for rent payments, adding to your benefits.
Easy Money Transfer via 3rd Party Apps
You no longer need to withdraw cash from an ATM or visit a bank to make rent payments. Credit card payments can be conveniently processed through reliable third-party applications like CRED, Housing.com, and RedGirraffe. These apps streamline the payment process, allowing you to set up standing instructions for automatic rent payments on specific dates.
Timely Payments
For individuals whose salary dates don’t align with their rent due dates, a credit card offers a practical solution. You can set up standing instructions, ensuring that your rent is automatically paid through your credit card, eliminating the need to remember due dates and preventing missed payments.
Improve Your Credit Score
Utilizing your credit limit for rent payments and making timely repayments can enhance your credit score. However, it’s crucial to avoid using more than 30% of your card limit, as this can negatively impact your credit score. If you anticipate difficulties in repaying your credit card dues, consider alternative payment methods.
Achieve Spend-Based Milestones
Many credit cards come with milestone benefits, such as annual fee waivers and attractive rewards based on specific spending thresholds. Given that rent payments can be substantial, you can accumulate substantial reward points by using your credit card, potentially waiving your credit card renewal fee.
Cons of Paying Rent via Credit Card
While there are advantages to using a credit card for rent payments, there are also drawbacks to consider:
High Credit Utilization
Paying a high rent through a credit card can significantly increase your credit utilization ratio. This can negatively affect your credit score, making it challenging to obtain loans or approval for new credit cards.
Higher Bill Amounts
Paying a substantial rent via your credit card can inflate your credit card bill. This may strain your budget, making it difficult to settle your entire credit card bill or even the minimum due amount. This negatively impacts your credit score, and you may incur high-interest charges on the outstanding amount.
Missing Payments
There might be situations where your attempt to pay rent with your credit card fails. It could be due to exceeding your credit limit or an expired credit card. In such cases, you’ll miss payments and need to explore alternative payment methods.
High-Interest Rate
Credit cards impose high-interest rates on outstanding dues. Failing to clear your dues on time can result in substantial interest charges, potentially leading to a cycle of debt.
High Processing Fees
Most banks and card issuers charge a processing fee for paying rent with a credit card. These fees typically range from 1% to 5%. Third-party apps used for payments may also charge convenience fees to customers.
Bank Processing Charges on Rent Payments via Credit Cards
Here’s an overview of the processing fees charged by major banks and card issuers when you pay rent with your credit card:
| Card Issuer/Bank | Processing Charges | Rewards on Rent Payments |
|---|---|---|
| Axis Bank | 1% + GST | Only for Magnus, Reserve, Burgundy Private, Atlas, and Vistara cards |
| HDFC Bank | 1% plus taxes from the 2nd rental payment in a month | None |
| SBI Bank | Rs. 199 + GST | Regular rewards as per variant, Not applicable for Cashback |
| ICICI Bank | 1% + GST | Regular rewards as per variant |
| Bank of Baroda | 1% + GST | Reduced rewards as per variant |
| Kotak Mahindra Bank | 1% + GST | Regular rewards as per variant |
| AU Bank | No charges on 1st transaction. 1% plus taxes on 2nd transaction per month | 1.25% for Zenith, 1 RP for others |
| Standard Chartered Bank | 1% + GST | 2% for Ultimate, Regular Rewards for other variants |
| HSBC Bank | 1% + GST | Regular rewards as per variant |
| RBL Bank | 1% + GST | Regular rewards as per variant |
| IndusInd | 1% + GST | None |
| IDFC First Bank | 1% + GST | Reduced rewards at 3X RP |
| Yes Bank | 0.75% + GST | Regular Rewards as per variant |
How to Pay Rent Via Credit Card
Paying rent to your landlord’s account with your credit card is a straightforward process. You will need to use a third-party rent application, which typically follows a similar procedure. Here’s how you can pay your rent through a third-party rent payment application using your credit card:
Download a rent payment app and complete the registration process by providing your basic personal details.
Enter your landlord’s details, including their mobile number, account number, IFSC Code, and PAN number, if required. Some applications may also request property details like the address and rent agreement.
After adding your landlord as a payee on the application, proceed to enter your credit card details and complete the transaction.
You can also set up standing instructions for auto-payment, ensuring your rent is automatically transferred to your landlord’s account on the specified date.
Most rent payment applications follow a similar payment process, allowing you to choose the one that suits your preferences. Next, we will explore the best third-party rent payment applications available for paying rent with your credit card.
Best Rent Payment Applications and Platforms
Landlords typically lack the infrastructure to accept credit card payments, so using a rent payment platform is the most convenient way to use your credit card for rent payments. These platforms enable you to add your landlord’s account details and facilitate the transfer of funds to their account. Here are some of the best rent payment applications and platforms:
Cred
Cred is a widely used credit card bill payment application that rewards users for timely credit card bill payments. You can use Cred to pay your rent and earn cashback and other rewards. It offers a user-friendly interface and allows payments to UPI IDs. Depending on your credit card network, you will be charged a processing fee ranging from 1% to 1.5%.
How to Pay Rent via Credit Card using Cred:
- Download the Cred mobile application on your smartphone and sign up.
- Click on the “Pay” option in the bottom bar and select “Rent pay.”
- Enter your rent amount, including processing charges.
- Proceed with your credit card details and landlord’s information.
- Complete the payment process.
RedGirraffe
RedGirraffe is a dedicated rent payment app known for being one of the first to offer this service. While its user experience may have room for improvement, it boasts integration with multiple banks and offers a low processing fee compared to other applications. You may need to upload your rent agreement if your rent exceeds Rs. 20,000.
How to Pay Rent via Credit Card using RedGirraffe:
- Visit the official RedGirraffe website and click on “Get Started” under “RentPay.”
- Choose “RentPay” after selecting “Credit Card.”
- Enter tenant and rental details, including the landlord’s bank account information.
- Upload your rent agreement and proceed to make the payment using your credit card.
Housing.com
Housing.com provides a user-friendly and straightforward rent payment feature. To make rent payments, download the app and complete a straightforward sign-up process. No documentation is typically required, and rent payments are processed within an hour.
How to Pay Rent via Credit Card using Housing.com:
- Visit the official Housing.com website and click on “Pay on Credit.”
- Select the “House Rent” category.
- Enter your mobile number, verify it with an OTP, and provide your rent and landlord’s bank account details.
- Enter your credit card details and complete the payment process.
Paytm
As one of India’s most popular platforms for paying bills, mobile recharges, and more, Paytm allows you to pay your rent with your credit card. You can transfer funds to your landlord’s UPI ID or bank account during rent payments. Here’s how you can pay rent using Paytm:
How to Pay Rent via Credit Card using Paytm:
- Download the Paytm application on your smartphone and set up your account.
- Click on “Recharge and Bill Payments” and select “Rent via Credit Card.”
- Choose “House Rent.”
- Provide your landlord’s details, including bank account information.
- Enter the rent amount and complete the payment process.
Freecharge
Freecharge, a platform by Axis Bank, enables easy rent payments with your credit card. You can send money to your landlord’s bank account by entering minimal details and making the payment with your card. Here’s how to pay rent on this platform:
How to Pay Rent via Credit Card using Freecharge:
- Open the official Freecharge website and click on “Rent via Credit Card.”
- Enter your mobile number and verify it with the OTP.
- Provide your personal details, including name, email ID, and pin code.
- Enter the recipient’s name, mobile number, and bank account details.
- Enter the rent amount, property address, and other required information.
- Provide your credit card details and complete the payment process.
NoBroker.com
NoBroker.com is a real estate application that allows you to pay society maintenance and rent using your credit card. Use your Mastercard or Visa credit card to make rental payments and earn exclusive rewards. Here’s how to pay rent on this platform:
How to Pay Rent via Credit Card using NoBroker.com:
- Visit the official NoBroker website and click on “Pay Rent with Credit Card.”
- Enter your mobile number and verify it with the OTP.
- Provide your landlord’s basic information and bank account details.
- Enter the rent amount and proceed to the next step.
- Enter your credit card details and complete the payment process.
Rent Processing Fees of Different Apps
Here’s a summary of the processing fees charged by various rent payment platforms:
| Rent Payment Platform | Processing Fees |
|---|---|
| Cred | 1% to 1.5% |
| Redgiraffe | 0.45% |
| Housing.com | 1.5% |
| NoBroker.com | 1% |
| Paytm | 0.9% |
In Conclusion
Rent payments with credit cards offer an array of benefits, but they also come with potential pitfalls. It’s crucial to weigh the pros and cons and assess your financial situation before making the leap. By staying informed about offers, charges, and the best platforms, you can make an informed decision. As our country increasingly embraces digital payments, rent payments via credit cards are a trend to watch. However, financial stability is key to avoiding a negative impact on your credit score and excessive debt.
Frequently Asked Questions (FAQs) – Paying Rent with Credit Cards
1. Why should I consider paying my rent with a credit card?
- Paying rent with a credit card can be advantageous if you want to earn reward points, make timely payments, or meet spending milestones for credit card benefits.
2. What factors should I consider before using my credit card for rent payments?
- Before using your credit card for rent, you should evaluate your credit score, the processing fees, and your ability to pay off your credit card bill on time.
3. Are there any offers for paying rent with a credit card in November 2023?
- Yes, there are several offers available for rent payments via credit cards in November 2023. These offers can include cashback, discounts, and reward points.
4. How can I pay my rent with a credit card?
- To pay your rent with a credit card, you typically need to use a third-party rent payment application. You’ll provide your credit card details, landlord’s information, and rent amount through the app.
5. What are the pros of paying rent with a credit card?
- Some advantages include earning reward points, making timely payments, and improving your credit score.
6. What are the cons of paying rent with a credit card?
- Disadvantages can include high credit utilization, increased bill amounts, the potential for missed payments, high-interest rates, and processing fees.
7. How can I improve my credit score while paying rent with a credit card?
- To enhance your credit score, ensure you pay your credit card bill on time and maintain a low credit utilization ratio.
8. Which banks and card issuers charge processing fees for rent payments via credit cards?
- Different banks and card issuers have varying processing fees. These fees can range from 0.45% to 1.5% of the rent amount.
9. Can I set up automatic rent payments with my credit card?
- Yes, many rent payment apps allow you to set up standing instructions for auto-payment, ensuring your rent is paid on time without manual intervention.
10. What are the best rent payment applications and platforms for using a credit card?
- Some popular platforms include Cred, RedGirraffe, Housing.com, Paytm, Freecharge, and NoBroker.com. The best choice depends on your specific needs and preferences.