How to Pay for Housing with a Credit Card and Maximize Rewards
Housing is typically the largest monthly expense for most people, and finding ways to pay rent or mortgage with a credit card can open up a new avenue for earning rewards. But while using a credit card for housing payments can be an attractive option, it’s important to weigh the potential rewards against the risks, including debt accumulation and hidden fees. Here’s everything you need to know about paying for housing with a credit card and making the most of it.
Can You Pay Rent or Mortgage with a Credit Card?
Yes, you can pay for both rent and mortgage using a credit card, but not all landlords, property managers, or mortgage companies accept credit cards directly. Some may impose processing fees, which can negate the rewards you’d earn from the credit card. However, there are increasingly popular housing-specific credit cards that facilitate such payments without hefty fees.
Two noteworthy options that make paying for housing on a credit card easier are the Bilt Mastercard and the Mesa Homeowners Visa® Signature Preferred Credit Card. These credit cards allow you to pay your rent or mortgage while also earning rewards. Here’s a breakdown of how they work and other relevant details:
The Bilt Mastercard: A Card for Renters
The Bilt Mastercard is one of the most prominent cards designed to help renters make housing payments while earning rewards. This card allows users to pay rent without incurring transaction fees, which is a game-changer for those looking to earn points on rent payments.
Bilt’s rewards program offers 1 point per dollar on rent, up to 100,000 points per year. The card also provides higher points on other categories like travel and dining (typically 2x to 3x points). Renters can redeem points for a variety of perks, including travel, fitness memberships, and even statement credits for rent payments. The Bilt card also allows you to report rent payments to the credit bureaus, which can positively impact your credit score.
The Mesa Homeowners Visa® Signature Card: A Card for Homeowners
For homeowners, the Mesa Homeowners Visa Signature Card is an excellent choice. While it’s not as widespread as the Bilt card, it offers strong rewards for mortgage payments and home-related expenses. The Mesa card gives you 1x points for mortgage payments and 3x points on home-related purchases like utilities and home improvement, making it a great choice for people who want to earn rewards on a wide range of home expenses.
In addition to earning points, Mesa cardholders also get perks like memberships to Sam’s Club, which can be a valuable bonus for those who shop at warehouse stores. You can redeem points for statement credits, gift cards, travel, or even toward your mortgage payments.
Advantages of Paying Housing Payments with a Credit Card
- Earn Rewards: The most obvious benefit is the opportunity to earn rewards, such as points, miles, or cash back, on housing payments. These rewards can then be redeemed for travel, gift cards, or statement credits, providing extra value on your largest monthly expense.
- Build Credit: Regularly paying your rent or mortgage via credit card and keeping your balance low can help improve your credit score. Many cards, like Bilt, offer the option to report rent payments to credit bureaus, which can boost your credit over time.
- Convenience: Using a credit card is convenient and allows you to keep track of your spending in one place. Plus, many credit cards come with added protections, such as fraud alerts and zero-liability coverage, which can help secure your housing payments.
The Risks of Paying for Housing with a Credit Card
- Accruing Debt: The primary risk when using a credit card for large payments like rent or a mortgage is accruing debt. If you’re unable to pay off the balance in full each month, interest charges can quickly spiral out of control. The APR on credit cards can range from 15% to 30% or more, meaning carrying a balance can significantly increase the cost of your housing.
- Processing Fees: While some housing-specific credit cards waive transaction fees, your landlord or mortgage provider might still charge a fee for credit card payments. It’s important to check with your landlord or property manager to see if they impose any additional charges.
- Credit Score Impact: Although paying with a credit card can help improve your credit score if done correctly, carrying a high balance relative to your credit limit can negatively affect your score. It’s essential to manage your credit responsibly to avoid a drop in your score.
- Not Universally Accepted: Not all landlords or mortgage companies will accept credit card payments. If they do, they might only do so through third-party services that may charge fees. Be sure to check before making a credit card payment to avoid surprises.
How to Maximize Rewards and Minimize Costs
If you’re committed to using a credit card to pay for housing, here are some tips to maximize your rewards and minimize potential costs:
- Pay Off Your Balance in Full: To avoid interest charges, make sure you can pay off your entire credit card balance each month. Ideally, this means paying as soon as your statement arrives or using automatic payments.
- Use Housing-Specific Credit Cards: Cards like the Bilt Mastercard and Mesa Visa offer the best rewards for housing payments and usually have lower fees than generic credit cards.
- Watch for Processing Fees: Always check with your landlord or mortgage provider to see if there are any fees for paying by credit card. If possible, use services like BiltProtect (available with Bilt) to avoid tapping into your credit line.
- Diversify Spending: To ensure you earn rewards in other areas, consider using your card for more than just rent or mortgage payments. Using the card for utilities, groceries, and entertainment can help you rack up additional points.
- Take Advantage of Introductory Offers: Many credit cards come with sign-up bonuses or promotional offers. These can significantly boost your rewards balance in the first few months, so look out for limited-time deals when applying for new cards.
Conclusion
Paying for housing with a credit card can be a smart financial move if done correctly. For renters, cards like the Bilt Mastercard provide a chance to earn rewards on rent payments, while homeowners can benefit from the Mesa card’s rewards on mortgage payments. However, it’s crucial to understand the risks, such as accruing debt and paying hidden fees, before committing. If you can pay off your balance in full each month, using a credit card for housing payments can be a rewarding way to make the most of your largest expense. Always do your research, understand the terms and conditions, and make sure it fits within your overall financial strategy.
