Are you looking for credit cards for rent payments? If Yes, You are at the right place.
In this article, We are sharing all the information about Best credit cards for rent payments.
The most convenient way to earn rewards and get spend waivers has been to pay rent by credit card. Sadly, many banks have capped rewards on rent payments due to misuse. However, plenty of credit cards offer good rewards on rent payments.
Many individuals in our country do not own their own homes, and monthly rent payments are a major part of their budgets. Credit cards are usually used for these expenses since they are usually among their highest costs. Landlords used to prefer cash payments in the past, while some used NEFT, IMPS, etc., but now they are more focused on paperless, digital payments.
The landlord has traditionally kept the details of their bank account private. Digital transactions, however, increased after the COVID-19 pandemic, and many people now pay their rent using credit cards and mobile wallets. It is possible to pay your home rent using your credit card through various third-party apps, even UPI.
Paying your rent with a credit card should only be done if you have a clear plan to pay off your balance in time; if you do not, you may fall into a debt trap. This article will explain how to pay rent with a credit card, the costs and processing fees involved, and the options available.
What are credit cards for rent payments?
A rental apartment or house can be costly, especially if you must figure out how long you’ll remain in the city. This is one of the reasons why many people prefer to rent furnished apartments. If you plan to pay rent with a credit card, choose one that provides the best protection possible. A credit card can earn you big rewards or other benefits when you pay your rent.
Paying rent with credit cards specifically designed for this use is possible. The company allows you to pay rent and pay off the balance each month. The interest rates on these kinds of plans aren’t crazy high so that you won’t get sucked into a spiral of debt.
Also, Read: CHURCHES THAT HELP WITH UTILITY BILLS
Top credit cards for rent payments
Below is a list of the best credit cards with rent payment features and benefits.
Axis Bank Magnus
The Axis Bank Magnus credit card offers a range of exclusive benefits and rewards. The card’s Milestone Rewards feature allows cardholders to enjoy two nights at Marriott hotels once they accumulate 25,000 reward points. The hotel also offers excellent concierge services, including expedited check-in, security screening, immigration assistance, and airport porter services.
Magnus Credit Card users can enjoy one free instruction session and up to four complimentary golf games per year with the Mastercard World Golf benefit. Cardholders can also access airport lounges, earn 5X rewards on Travel Edge’s website, and transfer points to partner programs to maximize their points value.
Axis Reserve credit cards are another premium offering from Axis Bank for high-end consumers. The program also offers dining privileges, hotel discounts, and concierge services. Cardholders can earn points for their spending with the card, which can be exchanged for rewards like travel vouchers and shopping vouchers. There is also the possibility of getting insurance coverage for travel and other contingencies and a fuel surcharge waiver with the card at select petrol stations.
SBI Vistara Prime
In partnership with Vistara Airlines, SBI Vistara Prime is a credit card for frequent travelers. Its key features are discounts with Vistara Airlines, complimentary Club Vistara Silver memberships, and airport lounge access. The card also offers rewards and discounts on dining and movie expenses, making it an ideal choice for daily spending and travel expenses. Additionally, some cards offer golf benefits, such as complimentary rounds and lessons, as part of their rewards programs.
HDFC Bank Infinia
HDFC Bank Infinia is designed for high-net-worth individuals and offers various exclusive benefits. Milestone benefits enable card members to enjoy fee waivers based on annual spending. Several lifestyle benefits come with the card, including dining benefits, savings on meals at Marriott Hotels, and dining discounts.
Various travel benefits include lounge access, low foreign exchange markups, and comprehensive travel insurance. All transactions on the card earn reward points, which are boosted on selected categories. Among the lifestyle benefits offered by the card are concierge services, golf privileges, and dining privileges at special restaurants.
YES Prosperity Edge
Prosperity Edge credit cards are known for their rewards and insurance benefits. The cardholders of selected Indian golf courses can take advantage of complimentary rounds of golf, lessons, etc. Among the insurance coverages it offers are international travel medical insurance, life insurance, and credit shield cover.
Another perk is lounge access, with the option of accessing domestic lounges with Mastercard variants and international lounges. Select petrol stations also waive fuel surcharges when using the card. The program also provides bonus points for reaching spending thresholds and accelerated rewards on specific spending categories.
How to apply for a credit card for rent payments?
It’s simple to apply for a credit card that you can use to make rent payments. The general steps are as follows:
- Check Eligibility Criteria: Make sure you meet the credit card issuer’s minimum income and credit score requirements.
- Application Process: Fill out an application for a credit card on the bank’s website or in a branch. Please provide the necessary details, such as your name, address, and phone number.
- Required Documents: Make sure you have all the required documents, such as your proof of identity, proof of address, proof of income, and a recent photograph. Please submit these documents with your application.
- Verification and Approval: You must submit your application and documents to the bank for verification. Your credit card application will be approved if everything is in order.
- Card Issuance: The bank will issue your credit card as soon as the application is approved and provide you with instructions on how to activate and use it.
Please note that the application process may differ depending on the credit card provider. The most accurate and up-to-date information should always be found on the bank’s official website or by contacting the bank directly.
What to Consider Before Making Rent Payments with Your Credit Card?
The interest rate on credit cards is very high, so you should consider several factors before paying your house rent with a credit card. These are the most important:
Impact on Credit Score: It is usually necessary to pay a large monthly rent. You’ll surely increase your credit utilization ratio when you pay with a credit card. High ratios can negatively affect your credit score.
Processing Fees. The credit card company or bank will charge you a transaction or processing fee when you pay for your rent with a credit card. It is possible to pay anywhere from 1 to 5% in processing fees, so if your rent payment is high, you will need to pay a large amount.
Interest. There is a high-interest rate on credit cards. Defaulting on your card bill will result in high-interest fees and keep increasing over time. Rent can be paid with your credit card, but ensure you are well-prepared to clear the debt on time.
These are all factors you need to consider when paying your rent with a credit card because otherwise, your credit score may suffer, and you may end up paying high interest rates. Paying rent with a credit card should only be done when you are confident that your bills will be paid on time.
How to Pay Rent Via Credit Card?
Paying rent to your landlord with your credit card is relatively simple, but you must use a third-party rent application. You must provide certain information from any application you submit to pay rent, including your details, credit card information, property details, and the landlord’s account details.
Using any third-party rent payment application, you can pay your rent using a credit card and the following steps:
- Register on a rent payment app using your basic personal information.
- The information you need to enter about your landlord includes their mobile number, account number, IFSC code, and PAN number.
- Several applications may ask for information about the property, such as the address, the lease agreement, etc.
- Paying your landlord can be done once you have added him as a payee on the application. Complete the transaction by entering your credit card information.
- Your landlord can even set up automatic payments, ensuring the rent amount is transferred to your bank account on a certain date.
Rent payment applications follow almost the same payment process, so you can use one that suits you.
6 Reasons Why Paying Rent Through Credit Card Is Beneficial
The remaining credit card limit will not be affected, and you can also take advantage of the extra perks and advantages. The following are some points to consider:
Improves Your Credit Score
Your credit score measures your ability to make payments, usually calculated as a three-digit number. You will improve your credit score if you make your credit card payments on time. Credit ratings are calculated according to how much credit someone has used. In this case, it is important to consider the person’s credit history and payback history. A person’s credit score increases if they pay rent using the card.
Payment on Time Without Any Hassles
Payments to your credit card company may even be automated if your credit card company permits it. A credit card payment is automatically debited from the bank account if auto debit is selected. In this situation, there is little chance that the payments will be late. This method can also be used to establish the credit score.
Earn Reward Points
Paying rent online may allow you to earn rewards points depending on the credit card you use. As a result of these rewards points, you can redeem them for gifts, rebates, and payment reductions in the future. Even with high credit card interest rates in this situation, reward points can sometimes be worth the cost. One could thus use these reward points more often to maximize their value and make the cost of credit card use more affordable.
Repay Your Credit Card Bills Interest-Free
If you pay your rent online using a credit card, you can settle the credit card bill within 45 days of incurring the charges without incurring any interest. You won’t be charged interest if you pay your rent by the specified deadline.
Making a Bank Transfer
Transferring money by bank takes a long time and is quite difficult unless you use an IMPS or UPI system. A credit card payment application, on the other hand, transfers the money quickly and without much hassle. You can also automate these payments for a simple monthly transfer on a specific date. Once the transfer is complete, an SMS will be sent to you and your landlord.
Reach Spending Milestones Easily
Today, many credit cards do not charge annual fees, and other milestone-based privileges apply. You will not pay an annual fee and will receive additional rewards/benefits if you meet the requirements. Using SBI Card Prime, for example, eliminates renewal fees if you spend Rs.3 lakh. Using a credit card to pay your rent will make achieving that goal much simpler.
Benefits of using credit cards for rent payments
Using a credit card to pay rent offers a variety of benefits that can help you manage your finances more effectively. The following are some of the key advantages:
- Convenience: Using a credit card to pay rent eliminates the need to arrange cash payments or write checks. Mobile apps or online payments make it convenient for you to make payments.
- Rewards and Cashbacks: Several credit cards offer rewards points and cashback on rent payments, allowing you to get valuable benefits using your credit card.
- Flexibility: Credit cards allow you to manage your rent payments more easily. Your financial situation will determine whether you pay the full amount or opt for EMI payment options.
- Building Credit History: A credit card used for rent payments helps build a positive credit history, which can benefit future financial endeavors.
- Security: Rent payments can be made with credit cards, adding an extra layer of security. You can be more confident about your transactions with fraud protection and dispute resolution features.
Factors to consider when choosing a credit card for paying rent
- Interest Rates and Fees. The best choice is a credit card with a low annual fee and a competitive interest rate. Paying your rent on time without being charged excessive fees is an important aspect of renting.
- Reward Programs: Choose a credit card with an attractive reward program, especially one offering bonus points or cashback for paying rent. Your regular rent transactions will benefit from this approach as well.
- Cashback Offers: A credit card that offers cash back on rent payments can be a significant advantage. Find cards with high cashback rates for rent transactions or attractive cashback schemes.
- Credit Limit and Flexibility: You should choose a credit card with a sufficient credit limit to cover your rent payments. Additionally, ensure that the card provides flexible repayment options, such as EMIs.
- Customer Service and Support: Choose a credit card from a reputable bank or financial institution with a reliable customer service network. By doing so, you are assured that you will be able to receive assistance promptly if you encounter any problem or have any questions regarding your rent payment.
- Compatibility: The process is simplified for rent payments with certain credit cards designed specifically for tenants and tied to certain rental platforms.
Factors to consider when choosing a credit card for paying rent
- Interest rates and fees: Look for credit cards with competitive interest rates and low or no annual fees. This ensures that you can make your rent payments without incurring excessive charges.
- Reward programs: Consider credit cards that offer attractive reward programs, especially those that provide bonus points or cashbacks specifically for rent payments. This way, you can maximize the benefits of your regular rent transactions.
- Cashback offers: Some credit cards provide cashback on rent payments, which can be a significant advantage. Look for cards with a high cashback percentage or attractive cashback schemes for rent transactions.
- Credit limit and flexibility: Ensure that the credit card you choose has a sufficient credit limit to cover your rent payments. Additionally, check if the card offers flexibility regarding repayment options, such as EMI facilities.
- Customer service and support: Look for credit cards from reputable banks or financial institutions with reliable customer service networks. This ensures you can seek assistance promptly if you encounter any issues or have queries regarding your rent payments.
- Compatibility: Some cards are specifically designed for rent payments and may have tie-ups with certain rental platforms, making the process smoother.
Pros of Paying Rent via Credit Card
The use of a credit card for rent payments has several advantages. If you have to pay your rent before you receive your salary, it could be a great option. Credit cards offer several benefits and reward points as well.
Reward Points & Benefits. You can earn reward points for spending money with almost every credit card. The card allows you to earn reward points when making rent payments and redeem these points for cashback, flight/hotel bookings, product purchases, gift vouchers, etc. You can also benefit from exclusive offers from card issuers when you pay your rent with a credit card.
Easy Money Transfer via 3rd Party Apps. Your rent payment does not require visiting a bank or withdrawing money from an ATM. Several reliable third-party applications allow you to pay your rent using your credit card. A minimum of formalities and convenience are required for the payment. These apps allow you to set standing instructions for automatic rent payments so that payment will be made on the date you specify.
Timely Payments: Depending on the individual, their salary may be paid on the 7th or 15th of each month, while their rent may be due on the 1st or 3rd. Credit cards will enable you to make timely rent payments in such cases. If you set one up, standing instructions will automatically pay your rent through your credit card on the specified date. There are no due dates, and you will remember to pay anything.
Improve Your Credit Score: Make timely payments to improve your credit score by using your credit limit to pay rent. You should use at most 30% of your credit card limit to prevent your credit score from being negatively affected. In addition, if you have difficulty paying your card dues, consider using cash or an account transfer instead of your credit card.
Reach Spend-Based Milestones: Many credit cards today offer milestone benefits such as free annual fees and attractive rewards after spending a certain amount. Making a house rent payment earns you reward points because it is usually a high amount. The renewal fee for your credit card can even be waived if you reach a certain spending threshold.
Cons of Paying Rent via Credit Card
The advantage of paying rent through credit cards is undeniable, but it also has disadvantages.
Credit Utilization is High: Your credit utilization ratio can increase significantly when you rent a house because of the rent you have to pay. Using your credit card more than 30% of the time will negatively impact your credit score. In such cases, your chances of getting a loan or receiving a new credit card will be reduced.
Increased Bill Amounts: The high rent you pay for your home will greatly increase your credit card bill, and it could also break your budget. The minimum amount due on your card bill, or even the entire bill, may be difficult to pay if you have a high bill. As a result, your credit score is affected, and high-interest rates are charged on the outstanding balance.
Missing Payments: It is possible to pay your rent with your credit card, but it may not work sometimes. There is a possibility that your credit card has expired or you have exceeded your limit. If this happens, you cannot make payments and must use another payment method.
High-Interest Rate. You will pay a very high-interest rate on any outstanding balance on your credit cards. It is very easy to fall into a vicious debt trap if you fail to pay your dues on time. A very high-interest rate will be charged if you fail to clear your dues on time.
High Processing Fees. Rent payments made with credit cards are almost always subject to a processing fee by the bank or card issuer. You may be charged between 1% and 5%, and if your house rent is extremely high, you might also have to pay a very high processing fee. Third-party apps also charge customers convenience fees.
How Can I Receive Cashback When I Pay My Rent Online?
Credit card companies may reward you with cashback or points if you pay your rent with them. The incentives and cashback are applied to your account immediately, according to the regulations of your issuer.
Can I Set Up Automatic Rent Payments with a Credit Card?
Some credit cards let you set up automatic payments for recurring expenses, such as rent. If you would like to set up automatic rent payments through your credit card provider, please get in touch with them.
Can I Earn Rewards or Cashback on Rent Payments?
With many credit cards, you can earn rewards points or cashback on rent payments. It would help if you looked for credit cards offering rewards or cashback for rent payments.