How to Pay Rent Through Credit Cards

Paying rent is a significant monthly expense for many individuals in India. Traditionally, rent is paid via cash, cheque, or bank transfer. However, with digital payments gaining popularity, paying rent using a credit card has become an option. This method offers convenience and potential financial benefits, but it also comes with certain costs and considerations.

Using a credit card for rent payments can help manage cash flow and earn rewards, provided one understands the process and associated charges.

In India, paying rent through a credit card is indeed possible, although not all landlords might accept direct credit card payments. To facilitate this, several third-party platforms and apps have emerged, allowing tenants to pay rent using their credit cards even if landlords do not directly accept card payments. 

CRED, Paytm, and RedGiraffe are some popular platforms that act as intermediaries. They collect rent from tenants via credit cards and transfer the amount to landlords through bank transfers. This system enables tenants to leverage their credit cards for rent payments while landlords receive funds in their bank accounts.

This method is gaining traction due to the convenience and benefits it offers to tenants, such as earning rewards and extending payment timelines.

Paying rent through a credit card offers several advantages beyond mere convenience. These benefits can make managing monthly rent payments easier and more rewarding.

• Earn Cashback and Rewards: Many credit cards offer cashback or reward points on rent payments. For example, a card with 2% cashback on rent can help tenants earn a significant amount annually on rent payments. 

• Extended Credit Period: Using a credit card allows enjoying an interest-free credit period of 45 to 60 days, which helps in managing cash flow better. Rent remains in the tenant’s bank account until the credit card bill is due. 

• Build Credit Score: Regular and timely rent payments through credit cards contribute positively to credit history, potentially improving credit scores over time. 

• Avoid Late Payment Fees: Credit card payments ensure rent is paid on time, avoiding penalties from landlords for delayed payments. 

• Convenience and Automation: Platforms supporting credit card rent payments often allow setting up automatic monthly payments, reducing the risk of missed deadlines. 

These benefits make paying rent through credit card an attractive option for many tenants, provided they manage payments responsibly.

Several platforms facilitate rent payments via credit cards. Here is a stepwise guide for three popular ones:

Using CRED

1. Download and register on the CRED app with your mobile number and complete KYC. 

2. Add landlord details including name, bank account, and IFSC code. 

3. Enter the rent amount and select credit card as the payment mode. 

4. Authorise payment using your credit card credentials. 

5. Confirm the transaction; CRED will transfer the rent to the landlord’s account. 

6. Receive payment confirmation and rent receipt through the app. 

Via Paytm

1. Open the Paytm app and navigate to the ‘Rent Payment’ section.

2. Enter landlord details and rent amount. 

3. Choose a credit card as the payment option. 

4. Provide credit card details and authenticate the transaction. 

5. Paytm processes the payment and transfers funds to the landlord’s bank. 

6. Save the transaction receipt for records. 

On RedGiraffe

1. Sign up on RedGiraffe’s website or app.

2. Register landlord’s bank details and rent amount. 

3. Select credit card as the payment method. 

4. Complete payment by entering credit card information. 

5. RedGiraffe transfers rent to the landlord and sends confirmation. 

6. Download rent receipts as needed. 

These platforms may charge a nominal convenience fee but offer the benefit of paying rent via credit card without landlord involvement.

While paying rent through a credit card offers key benefits, it can also involve additional costs. It is important to understand these charges to properly calculate your savings and expenses: 

• Processing Fees: Most platforms charge a convenience fee approximately ranging from 1% to 3% of the rent amount for credit card transactions. 

• GST on Fees: Goods and Services Tax (GST) is applicable on the convenience fee, increasing the overall cost slightly. 

• Cash Advance Fees: Some credit cards treat rent payments as cash advances, attracting higher fees and immediate interest. 

• Interest Charges: If the credit card balance is not paid in full by the due date, interest accrues on the rent amount, which can be substantial. 

• Caps on Fees: Some banks cap the maximum processing fee per transaction, usually around ₹2,500-5,000. 

• Platform-Specific Charges: Different rent payment platforms may have varying fee structures, so it’s advisable to compare before choosing. 

These charges can reduce the net benefit of rewards earned, so tenants should calculate the effective cost before opting to pay rent through credit card.

Certain credit cards offer better rewards, cashback, and lower transaction charges on rent payments. These cards can help optimise rent payments by offering rewards that could offset transaction fees or provide additional value. Below is a table listing some popular options:

Disclaimer: Some of the above mentioned credit cards may not be available on Bajaj Markets. Please check the official websites for the latest and updated information.

While convenient, paying rent with credit cards has certain risks and limitations to consider:

• High Interest Rates: If the credit card balance is not cleared in full, interest charges on rent payments can accumulate rapidly. 

• Overspending Temptation: Using credit cards for large expenses like rent may encourage spending beyond means, leading to debt. 

• Credit Utilisation Impact: Large rent payments can increase credit utilisation ratio, potentially lowering credit scores temporarily. 

• Landlord Acceptance: Not all landlords accept rent via credit card or through third-party platforms. 

• Processing Fees Reduce Benefits: Fees charged by platforms can offset cashback or rewards earned. 

• Delayed Fund Transfer: It may take 2-3 working days for the landlord to receive rent after payment. 

Being aware of these factors ensures responsible use of credit cards for rent payments.

Paying rent through a credit card is a viable option in India, offering convenience, rewards, and credit-building advantages. However, it involves processing fees and requires disciplined repayment to avoid interest charges.

Tenants should evaluate their spending habits, card benefits, and fee structures before opting to pay rent via credit card. When used wisely, it can be a useful financial tool for managing monthly rent payments.