Rent Payment through Credit Cards

Rent payment is the biggest monthly expense for any family which is living in a rented accommodation. So, if there is an option of getting some part of rent back as credit card reward points or as cashback, we should definitely go for it.
Over the last few years, many websites/apps have come up who can help you save on your rent payment by helping you pay rent through credit cards. The details for the same I will share in the below post and how you can benefit from this to add to your savings.

Benefits to pay rent through credit cards

Rent payment through credit card helps you in three ways:
1. Interest free credit for 40-45 days (You earn some interest on this amount by delaying your cash based rent payment)
2. Earn Credit card rewards points /cashbacks (This Helps you achieve annual spending targets to earn even more spend milestone reward benefits or helps you in annual fee waiver)
3. Builds credit history which will help you in future.

Why should you use credit cards to pay rents

I think definitely yes considering the above mentioned benefits associated with paying through credit cards. However, please be mindful that there are some charges / convenience fee being charged by the apps and your credit card reward benefits must be higher for you to achieve NET BACHAT in your transactions.

Net Bachat Formula

In this case of rent payment through credit card, the NET BACHAT is below:
NET BACHAT = Credit card rewards – Transaction charges + Savings over Interest period + Annual Target achievement Benefit

 As an example, if one rent payment app charges 1% fee

• You are earning 2% credit card reward points, then Yes (Net Benefit is Positive)
• You are earning 0.5% credit card reward points, then No (Net Benefit is Negative)
• You are earning 0.9% credit card reward points, then ‘Maybe Yes’ (Net Benefit may be Positive, Because it will help you improve credit score and help you achieve annual spends and move to the higher 2% card)

Comparison between Different Rent Payment Apps

There are many apps and websites which can help you process the rent payments through credit cards at a small fee to either UPI or direct account transfer.
I have done comparison of all the rent payment options using credit cards and associated transaction charges and other features in below table. Hope this is useful for you.

	Redgiraffe	Cred Pay	Paytm	Nobroker	Housing.com	Freecharge	Magic Bricks
Transaction Charges*	0.46%	1.55%	1.55%	1%	1%	1.06%	1%
Rental Agreement Copy Reqd	Yes	No	No	No	No	No	Yes
Transfer Method	Bank Account	Upi/Bank Account	Upi/Bank Account	Upi/Bank Account	Upi/Bank Account	Bank Account	Upi/Bank Account
Auto Payment	Yes	No	No	No	No	No	No
Convenience Rating	3	4	4	4	4	4	4

* The transaction charges include the GST.

Which Method I use for Rent Payment

You can guess it right. I use Redgiraffe to pay my rent to landlord.

I have tried all the above methods to pay rent using my credit card but after the initial offer period and discounts on transaction charges, the normal transaction charges start and leave NET BACHAT very low.

Although its cumbersome to setup the account and give rent agreement and bank account etc. but there are few reasons for continuing with Redgiraffe as preferred rent payment option for last 4-5 years :

• Redgiraffe has lowest transaction charges at 0.46% (0.39%+GST)
• Auto-Bill generation happens and auto-pay option is there. Once you setup like I did in HDFC SmartPay, it automatically gets deducted (Based on new RBI rules, you may need to manually pay)
• They would send you a receipt mentioning landlord’s PAN etc. which I could submit to my organization

The strategy should be to use the first few transactions at each platform, use the highest cashbacks and then settle for the one with the most convenience and lowest transaction fee. And Hence, I settled for Redgiraffe.

If you also want to earn credit card rewards and save on your rent spends, please use my referral link for using redgiraffe: https://rdgrfe.co/2n6n (Register using my referral link & we both earn Rs 1000 each worth of RedGirraffe CASH Points)

Keep reading and please keep sharing… More Bachat on the way!!!