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You can pay rent with a credit card, but should you?

You can pay rent with a credit card, but should you?
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Can I pay rent with a credit card in the UK? This is a common question, and the answer is yes, you can. But just because you can doesn’t mean you should. Here’s what you should know. 

Can I pay rent with a credit card?

Let’s start with the basics.

In the UK, it’s perfectly legal to pay rent using a credit card. However, landlords don’t have to accept credit card payments, so there’s no guarantee you can pay this way.  

First, ask your landlord if they accept credit card payments – preferably before you sign the lease. That way, you’ll know if credit card payments are an option.   

Should I pay rent by credit card? 

Even if you can charge the monthly rent to your credit card, it’s not always the best option. Here are three things to consider before you pay rent this way.

Credit score

Running up your credit cards can damage your credit score. Why? Because the more you owe, the more likely it is that you’re struggling to pay your bills. And, if it looks like you can’t pay your bills, you’ll struggle to get other lenders to give you more credit.

If you think you’ll need another loan or credit card anytime soon, think carefully before putting rent on a credit card.          

Processing fees

Business owners incur a charge whenever they process a customer’s credit card payment. The charge is known as a processing fee, and it’s usually between 1% and 3%

If you want to use a credit card, don’t be surprised if your landlord asks you to cover this processing fee. This means you’re paying more than the standard rental amount.  

Interest charges

Remember, you pay interest on everything you put on credit. So, if you put rent on a credit card, you’ll pay interest on the outstanding amount if you don’t pay the balance in full. Credit card interest rates vary, but in the UK, they’re often somewhere between 12% and 30% a year. 

Still want to pay rent with a credit card? Consider choosing a card with 0% interest on purchases for a few months. This gives you time to repay the balance in full without accruing interest charges. Alternatively, think about applying for a low interest rate credit card, if possible.

When should I pay rent with a credit card in the UK?

Sometimes, it might be worth paying rent with a credit card. Here are some examples of when it could work for you.

  • Your only other option is taking out a payday loan. These loans usually come with high interest rates and can be difficult to pay back.
  • You don’t have cash right now, but you’ll soon have the money to pay the credit card balance in full. By paying off the credit card, you won’t pay much – if any – interest.
  • Your credit card offers cash back or other reward incentives, and you know you can pay the full balance without accruing interest charges.    

And remember, if you’re in financial trouble, you can always contact a debt support organisation for help. 

Other ways to pay rent

If you can’t use a credit card or you don’t want to pay rent this way, you can:

  • Pay your rent online, if you’re a council tenant or your letting agency has an online portal 
  • Make a monthly bank transfer 
  • Pay by direct debit 
  • Write a monthly cheque 

You can also use cash, but it’s not the most secure payment method. Many tenants pay by direct debit because the payment is taken automatically each month. 

Again, you should check with your landlord to see what options are available to you.

So, can I pay rent with a credit card in the UK? 

Yes. If your landlord accepts credit card payments, there’s no reason why you can’t pay rent with a credit card. If you don’t have access to cash, a credit card payment may be a good alternative to applying for a short-term or payday loan. But it’s not a good idea to pay by credit card every month. You could damage your credit score and cause yourself more financial hardship down the line.

If you’re struggling to pay your rent on time, consider asking the Citizens Advice Bureau for free financial advice. 

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