Nowadays many people have started paying house rent through credit card. Many mobile apps and payment platforms provide this facility. This gives you a few days’ time to make the payment. In some cases, reward points or cashback is also available. But is it a win-win deal every time? The answer is, no. If you are also thinking of paying rent through credit card, then it is important to first understand its advantages and disadvantages.
Fees are charged for paying rent through credit card
When you pay rent with a credit card, in most cases the payment is made through a third party app or platform. These platforms can charge conveyance fees of 0.5% to 2% or even more. Apart from this, many banks no longer give reward points or cashback on fare payment. In such a situation, the benefits you get are no longer as attractive as before.
When can it be beneficial?
Suppose your rent has to be paid on the 1st of every month, but your salary comes on the 5th or 6th. In such a situation, paying the rent through credit card can be a good option. With this, you will not need to borrow from friends or relatives nor will you have to break your emergency savings. If you pay the entire credit card bill before the due date, you will not have to pay interest.
Consider credit card as a payment tool, not a loan.
Experts say that credit card should be used as a medium of payment and not as a way of borrowing. If you pay the entire bill on time every month, the cash flow remains better and in some cases you can also get the benefit of rewards.
Expenses will increase if bill is not paid in full
If you pay only the minimum due every month and leave the remaining amount for the next month, then the problem starts. The interest charged on credit cards is one of the most expensive loans available in the market. On top of this, the conveyance fee that you paid while paying the fare is also added. In such a situation, your rent may cost more than the actual amount.
Every bank has different rules
Please read the rules of your bank and credit card before paying the fare. Some banks offer reward points on fare payment, while some do not offer them at all. Some banks even charge additional fees on such transactions. Therefore, before making the payment, definitely check whether the benefit you get is more than the fees or not.
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