How to Pay Rent With a Credit Card in Canada: Get Those Points!

Have you ever stared at your wallet and wished you could pay rent with a credit card in Canada? Well, you can. Credit card churners rejoice because it’s your time to shine. The biggest monthly expense for most people is rent, and for credit card churners, it’s a golden opportunity to rack up substantial points. But there’s a right and a wrong way to do it. Here’s a comprehensive guide on how to maximize your rewards when you pay rent with a credit card in Canada.

This Article is Not For You If…

You Googled “How to pay rent with a credit card in Canada?” because you don’t have enough cash in the bank. If you can’t pay rent this month without charging it – that’s a massive red flag. Treating your credit card like an emergency fund is a highway to the danger zone. Consider calling your landlord right away, then your bank. There are other, less terrible options available to you. Unless you’re here to snatch credit card points like the Hamburgler, then move along, this article is not for you.

Understanding the Basics of Credit Card Churning

Credit card churning is the strategy of opening credit cards primarily to benefit from the sign-up bonuses and then, often, closing them once the bonuses are earned and before annual fees kick in. It’s a game that requires finesse, discipline, and impeccable timing. But it’s not for the faint of heart, or people who hate spreadsheets.

Why Pay Rent with a Credit Card in Canada?

Simply put: volume. The average cost of rent just hit a new all-time high in August 2023, making it our biggest monthly expense. Transforming this unavoidable payment into an opportunity to earn points is akin to turning a lump of coal into a sparkly diamond – for credit card churners. And it’s one more way to throw your proverbial middle finger up to the rising cost of living. How so? Well, check out the 4 main ways paying rent with a credit card can boost your financial situation now and down the road:

1. Bank Those Welcome Bonuses

There’s a wonderful world where you can pay rent with a credit card in Canada and get a free flight or cash in your pocket – and you’re living in it! Some cards offer tantalizing welcome bonuses, which can be within your grasp if you channel big expenses through them, like rent. Premium credit cards typically have the best welcome offers, but super high spend requirements to qualify. You could easily pocket those coveted welcome rewards if you pay rent with a credit card. 

2. Maximize Your Total Rewards

Each transaction can bring in travel points, cash back, shopping rewards, and more, making your rent work a little harder for you. In Canada, the average cost of rent is roughly $2,100 per month (at the time of writing). If you pay with a cash back credit card, for example, you could earn up to $1,000 worth of rewards per year! Just keep an eye on the associated fees to make sure you’re actually coming out ahead. 

3. Build Your Credit Score

If you want to boost your credit score, pay rent with a credit card and then immediately pay off the balance. By consistently paying off this significant charge each and every month in full, you’re showing the credit world how responsible you are. 

A positive payment history is one of the quickest and easiest ways to increase your credit score. This can open the door to better interest rates and loan terms down the road, which makes it easier to save money and achieve your financial goals. 

Keep Your Banking Info Private

Your account info is like your opinion on controversial pizza toppings — keep it to yourself. When you pay rent with a credit card in Canada, it ensures fewer people have access to your private banking details. If you’ve ever dealt with fraud or unauthorized transactions, you know how stressful and expensive it can be.

How to Pay Rent With a Credit Card in Canada: 3 Platforms Making It Happen

Platforms like Chexy, RentMoola, and Plastiq are your new best friends. They bridge the gap between hesitant landlords and tenants eager to hack their rent payments. But choose wisely, because fees are definitely not your friend!

Chexy

Credit card fee: 1.75%
Debit card fee: $1.00

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Chexy is the go-to platform for savvy tenants who want to pay rent with a credit card in Canada. It’s also the most affordable. Just upload your lease and link your preferred credit card to start earning rewards. On RentDay, Chexy will charge your card and automatically eTransfer the funds to your landlord. 

This platform allows you to earn rewards in two ways: earning credit card rewards when you pay rent, and earning cash back rewards from Chexy by shopping on their marketplace and referring people. Chexy cash back rewards can be used towards future rent payments, effectively reducing the cost of rent. 

However, the cost to pay rent with a credit card through Chexy is steep. They charge 1.75% per credit card transaction or $1 per debit card transaction. Based on the average rent of $2,100 per month, it will cost you approximately $441 in Chexy transaction fees per year. And that’s before we factor in your annual credit card fee (if there is one). 

Luckily, you can use the Chexy Rewards Calculator to see which credit card gives you the best bang for your buck. In the example below, using the American Express Cobalt card to pay rent will net you $113 after Chexy takes its cut. Keep in mind, this number does not include any Amex rewards earned from the welcome offer plus all your other card spending besides rent. Nor does it account for the $155.88 annual credit card fee.

RentMoola

Credit card fee: 1-3%
Debit Card fee: Not disclosed

RentMoola is a portal for landlords that allows their tenants to pay rent with a credit card, debit card, directly from a bank account, or even in-store with cash at Canada Post. You can choose between one-off payments as needed, or set up recurring payments using your preferred method. Unfortunately, you can’t just join. Your landlord has to sign up and offer the service to you.

Need to revisit a payment? You can easily access your transaction history, dissect individual charges, and loop in your property manager with handy notes.

You can also access exclusive MoolaPerks upon sign-up. Dive into a plethora of deals spanning travel, shopping, and home services, all while accumulating more points every time you use your credit card to pay rent. 

If you’re in a hurry, the RM QuickPay feature lets you bypass account creation, but won’t get access to MoolaPerks. Just punch in your details, arrange your payment, and voilà—rent’s sorted. Plus, an e-receipt is immediately sent to your inbox

The exact fees are not disclosed and vary based on the amount and payment method. But you can expect to be charged approximately 2.5% to pay rent with a credit card. That’s pretty pricey. Based on the average rent cost of $2,100 per month, you’ll pay roughly $630 in RentMoola fees over the course of a year. Ouch! 

Plastiq

Credit & debit card fee: 2.9%

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Plastiq is a platform that lets you pay for almost anything with your credit or debit card, even when those payment methods are not accepted by the recipient. Think utilities, mortgage, rent, tuition, and even your taxes! If you want to pay rent with a credit card in Canada, Plastiq steps up by either directly transferring the funds to your landlord or dispatching a cheque on your behalf. 

You can also take future payment worries off your plate with the scheduling feature. Set it up once, and like clockwork, Plastiq will handle your rent every month. They’ll automatically draw the funds from your credit card and send it to your landlord. 

Unfortunately, Plastiq is the most expensive platform to pay rent with a credit card, charging a whopping 2.9% transaction fee. Based on the average cost of rent, you’re looking at roughly $731 in fees over 12 months. I need a drink!

But there’s kind of a silver lining if you squint. You can offset these fees by earning rewards through the Plastiq referral program. By using a referral link during sign-up or introducing businesses to Plastiq, you can earn bonus Fee-Free Dollars.

Fee-Free Dollars can be used towards your rent payment, and the fee is then calculated only on the remaining amount charged to your credit card. The catch? The person you refer must make payments totalling $2,500 within the first 30 days of signing up. 

Costs to Consider Before You Pay Rent With a Credit Card in Canada

As discussed earlier, really the only reason to pay rent with a credit card is to maximize your rewards. But there are costs that could reduce the net value of your rewards, or even nullify them altogether, such as: 

Transaction Fees 

Platforms that allow rent payments via credit card charge you for this convenience, eating into any rewards you earn. On top of that, some credit cards might treat the transaction as a cash advance rather than a regular purchase. That’s bad news because cash advances are almost always subject to a higher interest rate. This leads me to my next point…

Potential Interest Charges

Unless you’re religious about paying off the full balance every month, interest will creep up on you. Most credit cards have a 21-day interest-free grace period. That means you have 21 days from the purchase date to pay off your charges before they start accruing interest. You should only pay rent with a credit card if you actually have the means to pay rent in full within 21 days. This ensures you can clear your credit card balance ASAP to avoid said interest. 

Credit Utilization Ratio

High balances, especially if you’re near your credit limit, can impact your credit score negatively. Financial gurus often advise staying below 30% credit utilization. For example, if you have a $1,500 credit card limit, you shouldn’t carry a balance over $500. As a former lender, I advise keeping your balance at $0 by paying off the balance in full every month, ideally every 2 weeks. 

Even if you’ve never missed a payment on anything in your entire life and you are not over-indebted, a balance of more than 30% of your limit still hurts. A lower credit score can result in higher interest rates on future borrowing, and even prevent you from accessing credit if the damage is severe enough. 

Cost vs Benefit Analysis: Let’s Get Mathing!

The decision to pay rent with a credit card hinges on a simple math problem: Do the rewards earned outweigh the transaction fees and other related costs? Let’s break down the process to determine the value and decide whether it’s a financially savvy move.

1. Calculate the Transaction Fee:

This is the fee a third-party platform charges you for using your credit card to pay your rent. Most platforms have a fixed percentage, usually ranging from 1% to 3%.

For example, if your rent is $1,500 and the platform charges a 2.5% fee:

Transaction Fee = $1,500 x 0.025 = $37.50

2. Calculate the Value of the Rewards:

Determine how many points or miles you’ll earn on the transaction. This calculation depends on the rewards rate of your credit card.

For instance, if your credit card offers 2 points for every dollar spent:

Reward Points = $1,500 x 2 = 3,000 points

Next, calculate the cash value of these points. Different cards have varying values for their points, which can range from $0.005 to $0.03 per point or even more.

Using a conservative estimate of $0.01 per point:

Total Rewards Value = 3,000 points x $0.01 = $30

3. Determine the Net Benefit or Loss:

Subtract the transaction fee from the value of the rewards:

Net Benefit/Loss = Total Rewards Value – Transaction Fee

= $30 – $37.50

= -$7.50

4. What’s the verdict?

In this scenario, you’d be at a net loss of $7.50, suggesting it might not be worth paying your rent with that credit card via that platform. Why did I show you a loss instead of pumping you up with a massive benefit?

To demonstrate how careful you need to be. Paying rent with a credit card can absolutely be worth it, but the numbers absolutely cannot be overlooked. For this to work, the math has to math in your favour every-single-time. So move your calculator app to the home screen, right now!

Why Aren’t Landlords Shouting “Charge It!”?

In Canada, paying with plastic is a national sport. But not every landlord is chomping at the bit to accept your credit card. In fact, you’ll be hard-pressed to find one who does. Why? Because credit card payments are super risky for them. Here’s why:

Processing fees

For every dollar you pay, a slice goes to the credit card company. It’s like having someone constantly nibbling at your Nanaimo bar. Over time, these fees add up, making some landlords a little hesitant.

Payment processing time

Unlike an eTransfer or cash in hand, credit card payments can take a wee bit to process. This delay can be a headache for landlords who have bills to pay.

Risk of credit card chargebacks

Imagine this: You dispute a charge, and the landlord is dragged into a whirlwind of paperwork and potential loss of funds. Yep, chargebacks can be a logistical nightmare that puts landlords at risk of dealing with deadbeat tenants. We know you’re an excellent renter, but the horror stories are real and financially devastating for landlords.

Other Reasons to Pay Rent With a Credit Card in Canada: Because Traditional Methods Kind of Suck

The age-old methods of rent payment are as familiar as your double-double, but let’s be honest, they often leave a bitter aftertaste. From the clumsiness of writing cheques to the risk of “losing” cold hard cash, traditional rent payment methods often feel outdated in our tech-driven world. Especially since they don’t put cash back in your pocket with rewards, and they’re not even that safe for you. Here’s why:

Cash is not king

The good old toonie and loonie method is tangible but also fraught with risks. There’s no transaction history, which can be problematic if disputes arise. And let’s not even talk about trying to lug a month’s rent in cash to your landlord. Dare I suggest not all landlords are above board (gasp!)? What if they “lose” it? You have almost no recourse when cash payments come up short or mysteriously go “missing.” 

Personal cheques violate privacy

Right there at the bottom of a cheque is your full bank account number, along with the route and transit number of the specific bank branch that holds your account. Do your cheques also have your name, address, and phone number on them? Probably. Holy Tom Cruise, that’s some risky business. 

And I haven’t even gotten to the dance of writing, waiting, and praying the cheque doesn’t bounce. At best, it’s tedious. At worst, it’s financial Russian Roulette. Plus, bouncing a cheque isn’t just embarrassing, it can lead to hefty fees for both you AND your landlord. 

eTransfers are a headache

It’s one of the most popular ways to pay rent, but it has its quirks too. Have you ever had a mini-heart attack wondering if you sent it to the wrong email? Or the mystery of the missing security question? Plus, the recipient has to know the answer to the security question, which means you probably texted it to them. That’s a huge safety no-no!

Pre-authorized debits are inflexible

It’s the easy set-it-and-forget-it way to pay rent but with a side of vulnerability. Giving someone access to pull from your account can feel like handing over the keys to your kingdom. How trustworthy is your landlord or the company that collects payments? How are they securing your private banking information? 

Not to mention, rent is typically due on the first of the month which doesn’t always align with your paycheques. Just like a cheque, a pre-authorized rent payment could bounce. The only way to stop it is to contact your landlord and your bank several days before the payment is due. Which means you also need a crystal ball.  

STOP! When You Absolutely Should NOT Pay Rent With a Credit Card in Canada

The reality that you can pay rent with a credit card in Canada is thrilling but potentially fraught with pitfalls. As tempting as it might be to swipe for shelter, there are moments when relying on that piece of plastic can steer you right into financial disaster. Here’s why you should NEVER pay rent with a credit card:

Cash Flow Crunch 

If your primary reason to pay rent with a credit card is a cash shortage, you’re literally asking for trouble. Treating your credit card as an emergency fund leads to deeper financial troubles that could bury you in unmanageable debt. Find another way.

Financial Hardship

A financial hardship can happen to anyone, like a job loss, health crisis, or even a divorce. If life throws you a mean money curveball, that’s all the more reason to NOT pay rent with a credit card. You’re far more likely to carry the balance month after month, incurring insane interest charges. And if you do this a few times in a row, eventually the minimum monthly payment will also get out of hand. 

Missed payments incur fees and often trigger a higher “default interest rate”, escalating interest charges even more. Not to mention the havoc it wreaks on your credit score, financial well-being, and even your mental health. Just say NO to more financial anxiety.

To Pay or Not To Pay Rent With a Credit Card in Canada?

For credit card churners, paying rent with a card is a powerful strategy to maximize rewards. With careful planning, you can turn every rent payment into a points goldmine with the best credit card in tow. But you must always ALWAYS crunch the numbers first. It’s essential to stay diligent, organized, and always prioritize financial health over rewards.