Many landlords nowadays do not reside at the property they are renting out. As a result, collecting rent may prove to be quite a bit of a hassle for them. However, these days there are many options from which tenants may be able to pay their rent without having to have the landlords physically coming over to the rented property just to collect a small piece of paper which they would later bank in. At the same time tenants also may not have to go to the bank to bank in their rent checks. Many people are now opting to pay rent with credit card. Doing so enables them to make payments to their landlords without even leaving their home and landlords may not have to worry about bounced checks.
Tenants love to pay rent with credit card because of the convenience. Many of them may have started out paying by credit card only occasionally such as during the holiday season when they could use the extra cash. Eventually many tenants may have already set it up so that their card is charged for the amount of their rent each month. You may think that charging the rent to your credit card may seem as if you are inviting more financial trouble to come your way. However, if your finances are in good shape, doing so may work to your advantage as long as you keep paying off the balance each month at no interest. This way you may be able to maintain good credit score and have peace of mind that your rent is always going to be on time even if you are a bit short of money in your bank account.
However, you may want to bear in mind that paying your rent with your credit card via online bill pay may not be all bed of roses. Your rent may take up a huge chunk of your available credit. The way FICO scores are calculated, taking up a large portion of your available credit may hurt your score in a big way. This is why if paying your rent with your credit card may leave only little credit balance you may not be gaining much benefit from it, other than the convenience of the method. If one day you decide to buy your own home, you may have to pay extra thousands of dollars on your mortgage because of your low credit score due to the minimum available credit balance you have on your card every month because a huge portion of it is used to pay your rent. It may also be dangerous for you to charge your rent to your card if you simply cannot afford to pay off your rent in cash every month.
If you are already behind on your credit card payments, many financial experts may also advice against setting it up so that you could charge your rent to your credit card on a permanent basis. If you skip paying your credit card balances in full for a month, the next month you may not have to be surprised to find that your credit card balance has grown significantly. If you had paid your rent in cash, the amount would probably take a huge chunk of your paycheck. So if you neglect to pay the balance on your credit card once you have charged your rent on it, you may find that you would land yourself in huge financial trouble rather soon. Credit cards generally may give you a false sense of security and you may feel that you can now finally afford to rent an expensive apartment. You may have to be careful not to land yourself in deeper debt.
Generally many people love paying their rent by using their credit cards because of the convenience. However, if you are not careful you may be setting yourself up to accumulate more debts especially if you have not developed a habit of paying your credit card balances in full.
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