topic Any Way to Charge Rent with Credit Card? in Credit Cards

Any Way to Charge Rent with Credit Card?

tpatterson2k9 — Thu, 30 Jun 2011 16:44:34 GMT

My rent isn't that much per month (i.e., $500), but I would like of course to charge this if possible. I have an Amex Blue Cash Everyday card, a Visa Amazon/Chase rewards card, a Sam's Club Discover card, and a Visa Gold card from my CU. The main challenge with charging my rent though is that my landlords are actually my parents. I currently do an electronic transfer each month from my checking account to my mom's account to pay rent, but with the many payment options available these days, I was wondering if there is some feature that would allow me to use a credit card to pay an individual person (I know Visa announced a similar service not too long ago but it isn't available yet).

I am not sure if it is currently possible for me to charge rent this way or not, but I'd like to find out so I can start capitalizing on as many rewards points as possible. Also, I don't know if it will make a difference, but my Visa Gold card is from the same CU as my mom, and I use this CU currently to pay rent via eletronic banking transfer. Any ideas?

Re: Any Way to Charge Rent with Credit Card?

Anonymous — Thu, 30 Jun 2011 16:54:06 GMT

The apartment complex we live at offers the option to pay rent through a third party processor, but that's different since it's to a major rental company. Even so, they charge an extra $19.99 per payment as a convenience fee, which negates the benefit of any rewards.

As far as paying directly to an individual, usually you need a merchant account to accept credit card payments. The only (simple/cheap) way around it that I can think of is accepting payments through PayPal. But since they charge a fee also (to the recipient in their case), that also doesn't help. What rewards points you'd be getting would essentially be paid by your parents since they'd be covering the fee.

That's more or less the problem with CC payments, the credit card companies ALWAYS charge a fee, so I can't imagine there being any free (fee-wise) way to get it done. If they didn't charge a fee, I could just set up a merchant account, get a rewards card and pay myself up to my max CLI every day, then use the money I got from paying myself to pay the card balance off and pay myself again. You'd basically get unlimited rewards points. But since the fee they charge the merchant/recipient of the payment is always there, there's no way to get ahead on it.

Re: Any Way to Charge Rent with Credit Card?

tpatterson2k9 — Thu, 30 Jun 2011 17:08:55 GMT

@Anonymous wrote:
The apartment complex we live at offers the option to pay rent through a third party processor, but that's different since it's to a major rental company. Even so, they charge an extra $19.99 per payment as a convenience fee, which negates the benefit of any rewards.

As far as paying directly to an individual, usually you need a merchant account to accept credit card payments. The only (simple/cheap) way around it that I can think of is accepting payments through PayPal. But since they charge a fee also (to the recipient in their case), that also doesn't help. What rewards points you'd be getting would essentially be paid by your parents since they'd be covering the fee.

That's more or less the problem with CC payments, the credit card companies ALWAYS charge a fee, so I can't imagine there being any free (fee-wise) way to get it done. If they didn't charge a fee, I could just set up a merchant account, get a rewards card and pay myself up to my max CLI every day, then use the money I got from paying myself to pay the card balance off and pay myself again. You'd basically get unlimited rewards points. But since the fee they charge the merchant/recipient of the payment is always there, there's no way to get ahead on it.

Thanks for your response. That's basically what I figured that fees would of course be charged to offset any potential rewards, I just thought I'd ask in case I missed something. Funny thing is though I remember back a few years ago the government was selling $1 gold coins that people could buy with CCs with free shipping. People were buying up to their CLs and once they got the coins in the mail they cashed them in to pay off their CC and then repeated the process. That didn't last long though before the CCCs caught on and stopped it, but I certainly wish I had known about that at the time. Oh well.

Re: Any Way to Charge Rent with Credit Card?

Anonymous — Thu, 30 Jun 2011 17:11:47 GMT

If your parents would take gift cards for rent perhaps you could buy a gift card with your credit card and give that to them, but if they want cold hard cash I guess you could not go that way
But i doubt I would want gifty cards instead of cash

Re: Any Way to Charge Rent with Credit Card?

tpatterson2k9 — Thu, 30 Jun 2011 17:16:32 GMT

@Anonymous wrote:
If your parents would take gift cards for rent perhaps you could buy a gift card with your credit card and give that to them, but if they want cold hard cash I guess you could not go that way
But i doubt I would want gifty cards instead of cash

Hmm, interesting idea. Don't some retailers allow you to exchange a gift card in for cash? If that is the case, then I could just buy $500 worth of gift cards to that place and then my parents could just cash that in (or I could even do that for them and then just send cash). Seems like there would be a measure in place to prevent something like this though. Anyone ever tried it?

Re: Any Way to Charge Rent with Credit Card?

Anonymous — Thu, 30 Jun 2011 17:23:22 GMT

As far as I know, gift card purchases are usually excluded in rewards, specifically to prevent people from buying gift cards, cashing them out back into cash, and getting rewards. Also, they can end up being charged as a cash advance (extra fees, higher APR).

Thanks to how much people have used and abused rewards programs over the years, it's a lot harder to earn them now. The CC companies have gotten smart.

Edit: Always with the typos.

Re: Any Way to Charge Rent with Credit Card?

Anonymous — Thu, 30 Jun 2011 17:33:38 GMT

@Anonymous wrote:
As far as I know, gift card purchases are usually excluded in rewards, specifically to prevent people from buying gift cards, cashing them out back into cash, and getting rewards. Also, they can end up being charged as a cash advance (extra fees, higher APR).

Thanks to how much people have used and abused rewards programs over the years, it's a lot harder to earn them now. The CC companies have gotten smart.

Edit: Always with the typos.

I have heard grocery stores from the gift card area just have them show as Purchases but maybe that has changed recently...

Re: Any Way to Charge Rent with Credit Card?

Anonymous — Thu, 30 Jun 2011 17:51:06 GMT

That could work (especially if you buy something like a pack of gum along with $500 worth of gift cards). But I'm not sure those gift cards can be cashed out. I think it's usually just the prepaid visa/mc cards that can be cashed out, as far as I know. I could be wrong!

I just get the feeling the CC companies have pretty much closed every loophole by now.

Re: Any Way to Charge Rent with Credit Card?

Anonymous — Thu, 30 Jun 2011 17:57:40 GMT

Thats why I said if they dont want cash

Re: Any Way to Charge Rent with Credit Card?

Itsmeagain — Thu, 30 Jun 2011 18:18:21 GMT

I use PayPal. They allow you to pay an individual and charge it to a credit card. The individual can then collect the cash by having it transferred to his/her bank account.

It is treated as a purchase by the credit card issuer.

Re: Any Way to Charge Rent with Credit Card?

Anonymous — Thu, 30 Jun 2011 18:37:03 GMT

Yeah, but PayPal charges you ~3% for payments received, unless you get mass paid. You cannot do a mass payment by funding it with a credit card. So while it wouldn't cost you as the payer anything, your payee would get charged the fees.

So for his 1-2% rewards, his parents would pay 3% in fees. Not a very good trade, IMO.

Re: Any Way to Charge Rent with Credit Card?

blazerein — Thu, 30 Jun 2011 18:43:29 GMT

I have a Cap1 CC and my DW has an NFCU CC. They sent us some blank checks to use if we want to make any type of payments (we never use it yet). This checks are tied to our CC so maybe you can start asking your CU or your CC company if they provide this type of service.

Re: Any Way to Charge Rent with Credit Card?

tengtengvn — Thu, 30 Jun 2011 20:45:53 GMT

@blazerein wrote:
I have a Cap1 CC and my DW has an NFCU CC. They sent us some blank checks to use if we want to make any type of payments (we never use it yet). This checks are tied to our CC so maybe you can start asking your CU or your CC company if they provide this type of service.

Most purchase checks has x% fee to use it. Read the back.

CapOne sometime sends me the check without fee.

Re: Any Way to Charge Rent with Credit Card?

Anonymous — Thu, 30 Jun 2011 21:14:55 GMT

Ask your parents to sign up with Square (they do not have to have a business)and you can start charging your rent on your card.

https://squareup.com/

Re: Any Way to Charge Rent with Credit Card?

Anonymous — Thu, 30 Jun 2011 21:37:34 GMT

Even with Square, you end up with:

2.75% per swipe for all credit cards. No monthly fees or contracts.

I'm pretty sure there's no way to make more from the rewards than the recipient (parents in this case) will have to pay as a fee. At that point, either they're going to be paying for the rewards through their fees, or you're going to be having to pay them more to make up for the difference, at which point the rewards aren't worth it.

It's unfortunate, but the system is set up so people can't just collect rewards for free. When cards offer rewards, those rewards are really just a part of the merchant fees (usually around that 3%) being returned to the customer using the card.

It would make sense if there's a card with fantastic rewards (5%+ cash back), or a special deal that you have to spent X amount to get Y back, but for a regular 1-2% offer, there's really no way to win.

Re: Any Way to Charge Rent with Credit Card?

Watchmann — Thu, 30 Jun 2011 21:52:26 GMT

Don't lose focus here ...... your goal is to efficiently pay your debt, not to try to rack up points. Trying to squeeze $10-$15 a month out of your rent payment by doing financial tricks and gymnastics leaves too much room for a screwup or a late payment, negating everything. Some things just aren't worrying about, and this is one of them. Continue to write a check and make sure you get it in on time and worry about rewards elsewhere. Do not become rewards focussed ....

Re: Any Way to Charge Rent with Credit Card?

Anonymous — Thu, 30 Jun 2011 21:56:18 GMT

@blazerein wrote:
I have a Cap1 CC and my DW has an NFCU CC. They sent us some blank checks to use if we want to make any type of payments (we never use it yet). This checks are tied to our CC so maybe you can start asking your CU or your CC company if they provide this type of service.

Those convenience checks also don't count towards rewards. They're considered a cash advance.

Re: Any Way to Charge Rent with Credit Card?

kjm79 — Thu, 30 Jun 2011 22:23:23 GMT

See if your parents are willing to let you pay some of the utilities or groceries that equal your rent in lieu of the actual rent payment. They still get their $500 and you get your rewards.

Re: Any Way to Charge Rent with Credit Card?

thobbs — Fri, 01 Jul 2011 03:28:15 GMT

Just a quick note. If you start buying $500 in prepaid gift cards often, you could wind up being investigated for money laundering. Retailers are now trained to question those types of transactions and alert authorities accordingly. This scenario is definitely not worth it. No joke...

Re: Any Way to Charge Rent with Credit Card?

Walt_K — Fri, 01 Jul 2011 13:18:49 GMT

@Anonymous wrote:
Yeah, but PayPal charges you ~3% for payments received, unless you get mass paid. You cannot do a mass payment by funding it with a credit card. So while it wouldn't cost you as the payer anything, your payee would get charged the fees.

So for his 1-2% rewards, his parents would pay 3% in fees. Not a very good trade, IMO.

Just an FYI. When you make a payment using a CC through Paypal, you choose whether you pay the fee or the recipient pays the fee. I've had this conversation with people who have tried to pay me using paypal with a CC.

Still not a good idea to use this service to pay your rent just to get points. But if you were in a spot where you needed to pay your rent using a CC, you could offset that fee a bit by using a rewards CC as opposed to a non-rewards CC. But I'd recommend choosing the option that you pay the fee unless you have discussed it with your landlord.