As a tenant, you can choose the way to pay rent. There are several options, including debit- and credit cards, peer-to-peer payment services or just cash. Here are some pros and cons of each.
If you’re in a good financial situation and you’re looking for a way to pay rent that’s fast and convenient, stick to the cash. Other options that usually don’t include any payment fee are ACH and electronic checks.
Using a debit card can also be an option, because of its simplicity. They’re also sometimes free of fees, or these are less expensive than credit cards. If your landlord doesn’t accept debit cards, you can pay through a third-party provider.
Third-party companies are an intermediary between you and your landlord. They can process your card payment and send a check to your landlord on your behalf. Of course, they charge a fee that’s usually 2.5%-3% of your rent, so be aware of this.
If you are in a difficult financial situation and you need to stretch out costs, you may use your credit card to pay rent. However, consider that they charge high fees and their gains don’t outweigh their costs.
An exception could be paying the rent with a new credit card with a big sign up bonus. If you have to reach a high amount of money in order to earn this bonus, it’s better to charge your rent than to buy products that you don’t need.
It’s also possible to pile up frequent flyer miles quicker with this high monthly expense on your credit card. You should do your math and decide whether the rewards are, for you, worth paying the 3%-3.5% fee.
Lastly, there are peer-to-peer payment services. Although they also include a fee, your money will instantly appear in your landlord’s account. You should check with them if this option is possible, as they’re often required to have an account as well.