Rent is usually a significant recurring expense, so you might be thinking about paying it on a credit card for rewards points or for better cash flow.
Paying regular bills such as rent is an easy way to make a minimum spend on a credit card and unlock the card’s sign-up bonus.
However, bank transfers and BPAY are usually the preferred methods of payment in this industry, as fees are minimal (or even non-existent) for both the tenant and the landlord or real estate agency.
Not many places will accept credit card payments outright but may offer that option through a third-party service. Either way, paying rent by credit card is likely to incur fees. We see if the rewards are worth it.
Can I pay my rent by credit card?
It depends on what options are given to you. While direct debits and BPAY are certainly preferred, you may be offered the option to pay your rent via credit card directly, or through a third-party company.
Fees usually apply, so be sure to weigh up how much more you would pay for the convenience of using your credit card, compared to what benefits you could get from earning more reward points.
Here is a non-exhaustive comparison of some ways to pay your rent (and other bills) with a credit card.
RentPay is a service that is available to tenants whose real estate agents are also signed up to the scheme. It offers credit card payments, direct debit, BPAY and cash at Australia Post.
While monthly membership fees apply for the latter three payment methods, it’s waived when you only pay by credit card. The credit card payment fees are:
- Visa/Mastercard: 1.25%
- American Express: 2.50%
On a $500 payment, you would be charged $6.25 in fees for a Visa/Mastercard transaction and $12.50 for American Express.
RentalRewards boasts a list of major agencies. The service promotes its ease-of-use, including email and text reminders where you simple reply ‘Yes’ to get the appropriate amount charged to your stored card.
However, RentalRewards has a confusing system of membership fees and payment charges. Be sure to read all the fine print before committing. These fees below are for credit card payments:
- Monthly ‘membership fee’: $5.00
- ‘Convenience fee’ for all card payments: 1.10%
- Additional ‘card transaction fee’: $2.00
- Payments over $499.99 by ‘premium & corporate’ cards: $10.00
- Payments over $2,999.99: 1.76%
Using Citibank PayAll
In early 2020, Citibank introduced its PayAll system for its consumer credit card customers, such as those with the Citi Prestige card. It allows you to make payments to any Australian bank account while charging it to your credit card.
PayAll is a very user-friendly system as you’ll be able to use it for private rentals and those organised through agencies alike. Citi PayAll has a simple fee structure:
- All PayAll transactions: 2% of the transaction amount
Read our guide to Citibank’s PayAll.
Managed by Macquarie, DEFT is a simple way to pay registered billers (yes, the real estate agent will need to be signed up to DEFT). You don’t need an account to do one-off payments by credit card. Payment fees are:
- Visa/Mastercard: 1.50%
- American Express: 3.30%
- Diners Club: 3.773%
- Any payment via Australia Post: additional $2.75
Paying business rent
If you have a business with an ABN that is paying rent, you could unlock even more options to pay fees by a credit card. Plus, transaction fees could be tax-deductible under some circumstances.
1. RewardPay fees
- American Express: 1.65% + GST up to 2.15% + GST, depending on the amount of a single transaction.
2. B2BPay fees
- Visa/Mastercard: 1.2% + GST
- Premium/Corporate Visa/Mastercard: 1.55% + GST
- American Express: 2.2% + GST
- Diner’s Club: 2.4% + GST
Is it worth paying rent by credit card?
First up, you should decide why paying rent by credit card is a good option for you. For most readers here, that is probably to earn reward points. But for others, it might be the cash flow benefits with having interest-free days.
The second step is to know what fees you’re paying. Let’s look at an example where you pay $400 in rent a week for 52 weeks — that’s a spend of $20,800 a year.
A look at credit card fees and rewards
For a quick comparison, we’ll estimate the fees you would pay if you charged that weekly amount to a Visa or Mastercard that earns 1 Qantas Point per dollar spent.
|Ongoing fees||Transaction fee on $400/week||Total fees paid per year|
|DEFT||Nil||$6 per payment||$312|
|Citi PayAll||Nil||$8 per payment||$416|
|Rental Rewards||$5/month membership||$6.40 per payment||$392.80|
|RentPay||Nil||$5 per payment||$260|
In this case, you’re looking at paying between $260 to $416 a year to earn 20,800 Qantas Points, depending on the payment processor. Now take a look at our rough valuation of those points.
|Total value||Value per Qantas Point|
|Our valuation of 20,800 points||~$395||1.9 cents|
|One-way Perth-Sydney flight in Economy (18,000 points)||~$350||1.78 cents|
|One-way Sydney-Melbourne flight in Business (18,400 points)||~$715||3.72 cents|
|$100 JB Hi-Fi gift card (18,690 points)||$100||0.54 cents|
Essentially, if the reward you get with your points is worth more than the fees you’re paying, then it’s probably worth switching over to pay rent on your credit card.
Flights tend to have that sort of high value and are a good use of points, whereas you would definitely be losing out if you used your points on a gift card or item from the Qantas Store.
Just don’t forget the usual traps: pay off your balance in full every month as any interest and late fees will wipe out any benefits you would have gained from earning those reward points.
Paying rent by credit card is not as easy as direct debit, but it can be done in some situations and the benefits can be worth it. You’ll be able to unlock the full potential of your points-earning credit card and take advantage of up to 55 cash flow days, depending on the card.
The main issue is that you are at the mercy of whichever payment processor that your real estate agent or landlord is partnered with. If it’s one with very high fees, you might want to reconsider your strategy.
Remember, there’s nothing wrong with passing up a points-earning opportunity if the fees to do so outweigh the benefits that you would get.
Frequently Asked Questions
You will need to check the fees chargeable and decide if the benefits received by paying with a credit card would outweigh the fees.
In most cases, paying rent on your credit card through a payment processer will count as a standard purchase.
Check with your landlord or real estate agent on what payment methods they accept. Some may offer PayPal as an option.