Rent is a significant recurring expense, so you might be thinking about paying it on a credit card for rewards points and for better cash flow. After all, keeping your money in a savings account for an extra month means even more compounding interest.
Paying regular bills such as rent is an easy way to make a minimum spend on a credit card and unlock the card’s sign-up bonus. Bank transfers and BPAY are usually the preferred methods of payment in this industry, as fees are minimal (or even non-existent) for everyone. But you won’t earn rewards this way.
We’re seeing more and more options to pay rent by credit card to boost your points balance. Of course, you’re going to encounter more fees along the way, but the rewards can make it a worthwhile exercise.
Can I pay my rent by credit card?
It depends on what options are given to you. While direct debits and BPAY are usually preferred, you may be offered the option to pay your rent via credit card directly, or through a third-party company.
Fees apply for card payments, so be sure to weigh up how much more you would pay for the convenience of using your credit card, compared to what benefits you could get from earning more reward points. Here are some ways to pay your rent (and other bills) with a credit card.
Using DEFT
Managed by Macquarie, DEFT is a simple way to pay registered billers (yes, the real estate agent will need to be signed up to DEFT). You don’t need an account to do one-off payments by credit card.
For rewards credit cards, Mastercard has the lowest rate at 1.2%. Both Visa and American Express credit cards are charged a reasonable 1.5% fee.
- Visa Debit: 0.40% surcharge
- Visa Credit: 1.50% surcharge
- Visa International: 4.00% surcharge
- MasterCard Debit: 0.40% surcharge
- MasterCard Credit: 1.20% surcharge
- MasterCard International: 4.80% surcharge
- American Express: 1.5% surcharge
- Diners Club: 3.773%
Paying business rent with Pay.com.au
If you have a business with an ABN that is paying rent, you could unlock even more options by paying the fees on a credit card with Pay.com.au. Plus, transaction fees could be tax-deductible under some circumstances. Fees are dependent on what type of account you have with Pay.com.au.
With the Premium tier (free for the first 30 days, $165/month after), you’ll get the lowest rates mentioned:
- Mastercard fee: from 0.80% to 1.00%
- Visa fee: from 1.00% to 1.20%
- American Express fee: from 1.90% to 2.10%
Disclaimer: Point Hacks is affiliated with Pay.com.au
Is it worth paying rent by credit card?
First up, you should decide why paying rent by credit card is a good option for you. For most readers here, that is probably to earn reward points. But for others, it might be the cash flow benefits of having interest-free days.
The second step is to know what fees you’re paying. Let’s look at an example where you pay $800 in rent a week for 52 weeks — that’s a spend of $41,600 a year.
A look at credit card fees and rewards
For a quick comparison, here’s an estimate of fees you would pay if you charged that weekly amount to the Qantas Premier Platinum which earns one Qantas Point per dollar spent.
| Ongoing fees | Transaction fee on $800/week | Total fees paid per year | |
| DEFT | Nil | $9.6 per payment | $499.20 |
| Pay.com.au | Nil (assuming base tier) | $8 per payment | $416 |
For the other payment processors, you’re looking at paying between $416 to $544 a year to earn at least 41,600 Qantas Points. We roughly value Qantas Points at 1.90 cents each, for comparison.
| Total value | Value per Qantas Point | |
| Return Perth-Sydney flight in Economy (36,000 points) | ~$700 | 1.94 cents |
| One-way Sydney-Nadi flight in Business (41,500 points) | ~$1,400 | 3.37 cents |
| $200 JB Hi-Fi gift card (41,520 points) | $200 | 0.48 cents |
Essentially, if the reward you get with your points is worth more than the fees you’re paying, then it’s probably worth switching over to pay rent on your credit card.
Flights tend to have that sort of high value and are a good use of points, whereas you would definitely be losing out if you used your points on a gift card or item from the Qantas Store.
Just don’t forget the usual traps: pay off your balance in full every month as any interest and late fees will wipe out any benefits you would have gained from earning those reward points.
Summing Up
Paying rent by credit card is not as easy as direct debit, but you can make it work to your advantage. You’ll be able to unlock the full potential of your points-earning credit card and take advantage of up to 55 cash flow days, depending on the card.
The main issue is that you could be at the mercy of whichever payment processor that your real estate agent or landlord is partnered with. If it’s one with very high fees, you might want to reconsider your strategy. It’s only worth paying the fees if you’re disciplined and know what rewards you want to get.
Remember, there’s nothing wrong with passing up a points-earning opportunity if the fees to pay rent outweigh the benefits that you would get.
Frequently Asked Questions
You will need to check the fees chargeable and decide if the benefits received by paying with a credit card would outweigh the fees.
In most cases, paying rent on your credit card through a payment processor will count as a standard purchase.
Check with your landlord or real estate agent on what payment methods they accept. Some may offer PayPal as an option.
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