Earn rewards by paying house rent using credit cards
Most of the people who live in a rented house pay their rent using NEFT/IMPS to transfer the money to their landlord. Doesn't this feel like too boring? I mean, no reward points, no credit, nothing! The money just goes from your account to your landlord's account. Recently, many companies have started the feature of doing rent payment using credit cards. Sure, they charge some fees for that, but if you use the option wisely, you'll end up gaining more.
Let us see the benefits of paying your house rent using Credit Cards instead of the conventional methods:
Earn rewards: When you pay the rent using NEFT/IMPS, you get nothing in return. If you pay the same using credit cards, you'll earn reward points for using the card.
Reach Credit Card milestones easily: Many cards have milestone based rewards or spend based annual fees waiver condition. Since rent amount can be significant, it helps to reach the milestones sooner.
Interest free credit: When you pay your rent using Credit cards, you get 10-50 days of interest free credit which you can pay later when the bill arrives. Your money will be in your hands for this period. So why pay now if you have the option to pay after some days?
Online receipts: Most of the platforms provide online receipts after the rent amount has been credited to your landlord's bank account. You can use these receipts for claiming tax benefits.
Improve your credit score: Using your credit card and paying it off in full every month helps improving your credit score.
Set up auto pay: Some of the platforms allow you to setup auto pay for rent payments. So, if you forget your rent payment frequently, you can set up auto pay. Every month on a pre-determined date, your card will be charged with the authorised amount and the rent will be deducted to your landlord's account.
I can see only one disadvantage of paying rent using credit card, which is that you are charged an extra amount which varies from 0.46%-1.5%. However, if you have a credit card which gives decent reward points, you can easily cover this extra charge and it won't be a burden.
I've tried 4 platforms for rent payment using credit cards:
Nobroker Using Nobroker, the transaction is almost instantly. I have used it a couple of times and my landlord received the rent money within 2-3 minutes. They send you a notification at each step: When the rent payment is initiated (money is deducted from your card) and when its credited to your landlord. You get the rent receipts in your email instantly. The charges for using Nobroker for rent payment is 1% of the rent amount. Currently they accept only Visa and MasterCards for the payments which was the main reason I moved away from this and looked for alternative option RedGiraffe, since I could not use my Diners Black here. If you wish to use Nobroker, you can visit Nobroker Pay, enter your and your landlord's details and do the payment.
RedGiraffe This is my personal favourite because of the less charges and hassle-free payments using HDFC Smartpay. You first need to create a RedGiraffe ID by entering the details of the rented house and your landlord, and register this ID with your bank. I've used this with HDFC and Yes bank Credit cards and it works just flawlessly. Every month on a pre- determined date, your card is charged and the money is credited to your landlord. RedGiraffe charges a nominal 0.46% (including GST), with a minimum charge of Rs 53 (including GST). The best thing is that it works with any type of credit card. I've set up payment using rent giraffe using my HDFC Diners Black Credit Card and earn a sweet 3.3% rewards, in exchange for the 0.46% charges. Good deal, isn't it? If you wish to use RedGiraffe for rent payment, you can visit here, enter your and your landlord's details. Post that, a RedGiraffe ID will be generated, you just need to link it as a biller in your card's portal. Currently Redgiraffe can be used with ICICI, HDFC, Kotak Mahindra, IndusInd, SBI and YES BANK Credit cards only. PS: RedGiraffe is mentioned on the HDFC official website also, so I see no reason not to trust the company.
Cred A large number of the credit card users now use Cred to manage their credit cards because of ease of maintenance of cards and ease of bill payments. This month, Cred has also started rent payment using credit cards. This is also almost instantly transferred to the landlord's account. The charges are a little higher than the above two options, 1.5% (including GST) of the total rent amount. But the good thing is that you can use all type of credit cards for the payment. To download Cred, click on this link, go to pay rent, enter your and your landlord's details and the payment will be done.
Housing.com: The real estate search company Housing.com launched platform for paying the rent using credit cards. Currently this feature is available only on the housing app (play store link) and not the website. They charge 1% as the service charge. This is almost the same as NoBroker in terms of service charge and time to credit the rent in landlord's account. A big con is that currently Diners and Amex cards are not supported.
Out of all the above mentioned options, I prefer RedGiraffe because of the lowest fees and that I can use my Diners Black for rent payment. However, the registration process is a little complex in RentGiraffe, unlike the other three where you just enter your and your landlords details and BAM! You are ready to transfer rent. In RentGiraffe, you have to register your property, generate the ID, then wait for the property to get approved and then link it card. But since that is just a one time process, I guess that is fine.
If you have any questions, please let me know in the comments section below. Also please share your experience with these or any other rent payment platforms below.