In an economic emergency, covering even basic yet important expenses can be tough. For example, in 2020, the coronavirus pandemic rocked the foundations of millions of Americans. The National Multifamily Housing Council found that by Jan. 20, 11.4% of tenants had not sent money for their rent.
The last thing you want is to be evicted from your home because of nonpayment of rent. When used correctly, a credit card can help you through hard situations. Since the card issuer only requires a small minimum payment, it can buy you time before getting back on your feet.
Here’s how to charge rent, not just during a financial crisis but under normal conditions as well, advantageously.
See related: How to earn rewards when paying monthly bills
How to pay rent with a credit card
- How to pay through your landlord
- How to pay through third-party services
- Best credit cards to pay rent
- Pros of paying rent with a credit card
- Cons of paying rent with a credit card
How to pay through your landlord
First, ask your landlord if you can charge your rent. Some have software already set up to accept payments, so all you would need to do is provide your account information and your card will be charged. Larger property management companies are more apt to accept credit cards than individual landlords, but it’s worth an inquiry.
Bear in mind that there will be a processing fee, which typically falls between 2.5% and 2.99% of the transaction. The landlord will probably pass that cost to you, though it doesn’t hurt to ask if they’ll absorb the fee.
For example, if your rent is $1,800 and the fee is assessed at 2.99% of the transaction, the added cost would be $53.82. If the minimum credit card payment is 2% of the balance, your payment would be $36. Add the fee to it and all you’d need to pay is $89.82 – a far cry from the $1,800 due.
If your landlord doesn’t offer this option, consider explaining your reason for wanting to charge the amount. If it’s not a permanent change to the rental agreement (which spells out the method and timing of your payments), your landlord may allow you to send the money via an app such as PayPal or Venmo on a temporary basis.
You would set up the app, attach your credit card to the account, and then follow through with the “pay-to” transaction:
- Locate your landlord’s profile name.
- Hit the “pay” function.
- The money is deducted from your credit card and sent to your landlord’s bank account on file.
- You receive the bill of the transaction amount plus the fee from your credit card company.
Yet another way to use your credit card to cover your rent is to take out a cash advance. It comes with some serious consequences that make this method your last choice, though:
- Fees can be 5% of the amount you withdraw.
- Interest rates are often higher on cash advances than they are on purchases.
- There is no interest-free grace period, as there is for purchases.
Credit card issuers offer cardholders relief amid coronavirus fears
How to manage your credit cards during the coronavirus outbreak
Coronavirus: What to do if you’re unemployed and have credit card debt