Credit Cards

How to Pay Your Rent with a Credit Card (In Canada)

| Last updated on July 27, 2019

Out of the many bills most ordinary Canadians pay in a month, rent is usually among the most important. This is because rent is usually among the largest expenditures for folks who do not own their living space. Providing the appropriate funds to a landlord on the first of the month can be a hassle as a result, especially when you’re required to use analog payment methods such as through cash or check.

While these remain the primary methods of paying rent for most Canadians, new payment methods have begun to evolve and have been embraced by some forward-thinking landlords. If you are fortunate enough to rent from such a landlord, you may be able to pay your rent through an electronic transfer system such as a credit card.

Paying rent through a credit card brings with it a variety of benefits, including an added sense of convenience as well as an opportunity to build your credit. This method comes with its own drawbacks as well, as paying rent with a credit card is a quick way to incur a heavy debt burden if you are unable to rapidly pay down your credit bill.

But even with these positives and negatives aside, it is worth your time to learn about how you can pay your rent with a credit card today. With this knowledge in mind, you’ll be able to make an informed fiscal decision regarding whether or not you’ll be the next Canadian to embrace this new opportunity for digitized bill payment.

Paying Rent with a Credit Card Online

Because of its inherently digital nature, the majority of landlords who accept credit cards or debit cards do so through an online service provider. Often, these payment services are operated by a third party who are contracted by the landlord to accept rent payments. If your landlord incorporates this service among their rent paying options, you’ll be able to pay rent with your credit card without needing to drop off any physical payment method at their office.

For the most part, these payment interfaces mirror those used by other online retailers that accept credit cards. After logging in and connecting your payment account to your renters account, you’ll be able to receive bills from your landlord on the first of the month. In turn, you’ll be able to input your credit card on those occasions and pay your full bill without ever leaving your apartment.

When working through a third party service, you may be charged an extra service fee (typically between 1 to 3% of your credited sum). This fee does not go to your landlord and instead goes to the service provider as a kind of “usage tax”. However, if your landlord operates their own digital payment interface, you may be able to forgo these additional charges on your credit card.

Paying Rent with a Credit Card in Person

Though it is rare, your landlord may enable you to pay your rent with a credit card by showing up to their office in person. Typically, landlords provide this option if they are currently building an online payment interface or have chosen to forgo one entirely. While this isn’t nearly as convenient as paying online, it still provides a firm opportunity to pay down a rent bill without withdrawing cash or writing a check.

If your landlord affords you the option to pay with a credit card in person, they will typically require you to visit their main office and complete a traditional credit card transaction. To be specific, your landlord will run your credit card through a physical credit card reader similar to those used in retail environments. From there, you’ll likely need to provide your signature to certify the “purchase” before completing the process.

In total, this may only take a few minutes if all goes well. From there, your credit card will treat the point of service charge just as it would if you had initiated the process yourself. The appropriate charge will appear on your credit bill in a few days, providing you time to make plans to pay down your credit bill.

Weighing the Pros and Cons

While paying your rent with a credit card is easy enough, you shouldn’t automatically switch to paying your rent with a credit card as soon as your landlord offers the opportunity. Instead, you should take some time to weigh the pros and cons that come with making a substantial charge onto your time-sensitive line of credit.

If you still elect to pay your rent with a credit card after considering these positives and negatives, you’ll be able to make such a bold move with confidence by arming yourself with knowledge regarding everything that can go right and wrong as a result of your choice.

Pro – Improving your Credit

First and foremost, paying your rent with a credit card is a great method for establishing credit in a responsible and manageable manner. This is because responsible credit card users typically pay off their credit bill as soon as their rent-related charge appears on their account with the money they would have otherwise applied to a cash or check payment.

This rapid and reliable payment cycle helps establish stronger creditworthiness in the eyes of a credit card issuer, which in turn helps improve your individualized credit score. While an improved credit score can help you attain higher credit limits from your current credit card issuer, a positive credit score can additionally make it easier to attain future lines of credit in the form of credit cards or loans.

Pro – Wracking up Rewards Points

Depending on the specific terms of your credit card, you may be enrolled in a rewards program that provides incentives to use your credit card more extensively. Often, these rewards are facilitated through a points system that is correlated to how many dollars you spend with your credit card. These points can then be spent on a variety of consumer goods, including electronics and plane tickets.

Typically, the more you spend with a credit card, the more rewards points you incur at the end of the billing period. As such, folks interested in accumulating a high volume of rewards points should consider making their rent payments with their credit card. Because rent payments tend to cost more than other ordinary purchases, charging a rent payment on a credit card can result in a proportionally large number of reward points accruing in short order.

Also, some credit cards provide further incentives to encourage folks to use their credit card for high value purchases. For example, some credit card issuers provide double or triple the ordinary amount of reward points when their card is used to pay down “utilities” such as rent. If used mindfully and with proper fiscal planning, this method of wracking up reward points can make it easier to decrease the price of other large purchases in the immediate future.

Pro – No Check or Cash Necessary

Let’s face it: paying by check or cash can be pretty inconvenient. Though writing a check is fairly quick and easy, you have to monitor your checking account after giving it to your landlord to ensure you have proper funding available when they finally cash the check. While paying in cash cuts out this time-based hassle, it replaces this hassle with the need to withdraw several hundred dollars in cash at once (which may incur withdrawal fees, depending on your bank’s policies).

Paying with a credit card forgoes all of these obstacles by streamlining both the medium and the time table associated with your rent payment. Because a credit card payment is entirely digital, you won’t be forced to carry around large sums of money as you would with a cash payment. Similarly, credit card charges typically appear on your account with reliable frequency, allowing for more stable tracking and resource management.

As with any digital payment, “convenience” is a primary reason to use a credit card to pay rent. So long as you have the appropriate funds to pay down your credit bill, you can even automate your rent payment through your credit card to further simplify what is otherwise a monthly hassle.

Con – Incurring Debt Rapidly

Added convenience and usage incentive come at a price, unfortunetly. To be precise, using your credit card to pay your rent is one very efficient method to incur a large volume of debt in a short period of time. While it usually takes a high volume of regular consumer purchases to cause your credit bill to get out of hand, even a single sent rent payment can cause your credit bill to skyrocket by hundreds of dollars.

Interest on your carried credit card debt can make this situation even more untenable. Because of the high dollar value on a single rent payment, interest charges can reach into the hundreds depending on the terms of your particular card. Without an offsetting source of income, this debt can easily spiral out of hand, making it harder and harder to pay in full. All along your way, your credit score with suffer, making it harder to procure new lines of credit in the future.

In short, if you don’t already hold the funds necessary to pay your rent in full without a credit card, then you should not be using a credit card to cover such high-value bills. Doing so can lead to a debt spiral that grows out of hand in only a matter of months.

Con – Hidden Costs or Fees

Whether on the part of your landlord or the payment service company they work with, some hidden costs or fees may also result from using your credit card to pay rent. These extra costs usually act as a “usage tax” that offsets the time and resources used by your landlord or their chosen third party payment service to fully process your digital payment.

While all credit card transactions carry this type of fee, few know about it because retail businesses typically cover the fee (landlords typically don’t, though). In raw percentages, these extra fees tend to be low at around 1% to 2%. However, when applied to a multi-hundred dollar sum total on a rent bill, the actual per-dollar value of these service fees can skyrocket beyond what some renters are willing to pay.

For this reason, renters who are trying to maintain a tight budget should likely avoid paying their rent with a credit card. These seemingly small service fees can put you over budget quickly when it comes to paying critical monthly bills. Even renters with a bit of money to spare should only elect to pay their bills with a credit card if they are willing to pay extra for the convenience of digital transactions.

The Bottom Line

For many Canadians, paying rent with a credit card is a fresh opportunity to inject convenience into an otherwise bothersome monthly financial transaction. Indeed, paying rent with a credit card is certainly quicker and more efficient than accomplishing the same task with a check or cash. But paying rent with a credit card also comes with its own drawbacks, including the risk of incurring unforeseen fees that lead to unmanageable debt.

Before electing to move your rent payment to your credit card, take an appropriate amount of time to weigh these benefits and drawbacks against your individual financial situation. If you can already afford rent without a credit card and have a history of paying your credit bill on time, you likely already possess the habits necessary to make this a personally beneficial transaction.

On the other hand, if you already hold a descent amount of debt or could not otherwise pay rent without a credit card, you should stick to paying in cash or with a check when you are able. In either case, speak with your landlord and discuss the options they provide for paying your monthly rent. With their various options in front of you, you can more effectively choose a rent payment method that accommodates your personal financial needs.