Credit Card Tips: Is paying rent with credit card a good habit? Or is this our loss?
Do you use credit cards to pay house rent? And is it a good habit? Or are your financial burdens unknowingly increasing? Get complete information here..
paying rent by credit card
- Processing Fee: Most owners or rental agencies charge a processing fee when you pay by credit card. This is usually two to three percent of your rent.
- Cash Advance Fee: Instead of treating a rent payment as a regular transaction, some credit card issuers treat it as a cash advance. Cash advances often carry high interest rates and other fees.
- Interest on past due payment: If you do not pay your credit card bill in full and on time, you will face financial burden. Therefore the cost is very high.
- Impact on Credit Score: Paying rent with your credit card will increase your credit utilization ratio. This will reduce your credit score even further.
These are good things.
- earn rewards: Earn cashback or credit card rewards on rental payments. Compare this to your total costs, then subtract the fees charged.
- Credit Building: You can build a credit history with your credit card by making rent payments on time or by always making full, on-time payments.
- Avoid late fare penalties: Paying with your credit card will ensure that you don’t have to pay late fees. This is because it guarantees payment to the landlord on time, even if you are short on cash.
If you don’t know this you will lose.
- Expensive Fees: Processing fees, cash advance charges and interest are also high. This is a burden on us.
- credit risk: Using a credit card for large payments like rent can cost more. Failure to pay the balance will result in higher interest rates.
- Impact on credit utilization: Using a credit card to pay rent can be a great strategy for earning points and building credit, but it also has some disadvantages! You need to know whether this policy suits your financial situation.
- The homeowner does not agree: Homeowners does not accept all credit cards.
(Note- Understand that there is risk with credit cards.)
