Paying Rent With a Credit Card in Canada

You can pay rent with a credit card in Canada, but it usually comes with fees between 1% and 3% through third-party services like Chexy. While these fees often make this payment process less appealing, it can be worth it if the credit card rewards or signup bonuses outweigh the costs, or even in rare emergency situations.

Chexy stands out with a low 1.75% fee and rewards-optimized processing, allowing you to earn net positive cashback using the right card—like the Rogers Red World Elite Mastercard. Still, if rewards are low, it's usually better to use more traditional payment methods.

In this post, we'll dive deeper into paying rent with your credit card and also, when discussing Chexy as a payment processor, we will introduce a strategic way to save hundreds of dollars in cashback per year by putting your rent on your credit card!

Can You Use a Credit Card to Pay Rent?

The short answer is yes, but there's a catch.

There are ways to pay rent with a credit card for Canadian residents. However, most landlords or property managers don't accept this method.

In these scenarios, a third-party bill payment service such as Chexy, Paytm, Plastiq, or RentMoola should be used.

These services facilitate paying your rent using a credit card, even when your landlord does not directly accept such payment methods.

Keep in mind that there's often a fee associated with these services, but there's still a way to come out net positive with the right credit card.

Cost of Paying Your Rent with Credit Cards

Using a credit card to pay your rent will likely involve additional charges. You might be subject to credit card fees ranging from 1% to 2.5% when using a third-party payment service.

If your landlord accepts credit cards directly, that doesn't mean that there are no fees attached. Banks usually have a 3% transaction fee for these types of transactions. Double-check with your landlord to see who's responsible for this charge. Often, it could be you.

As a rough guide, if your monthly rent is $1,000 and you opt to pay via a credit card, you could be faced with an extra charge between $10 and $30.

Can You Pay Rent with Credit Card in Canada for Free?

Using a credit card to pay rent is rarely without additional charges. Most third-party services impose a service fee, and if your landlord accepts credit card payments directly, they may relay the transaction fee to you.

Is It Worth It to Pay Your Rent with Credit Card in Canada?

Now that we discussed the hidden fees associated with using credit cards to pay rent, lets explore scenarios in which this type of transaction makes sense.

1. Rewards Outweigh the Costs

Let's imagine one of the third-party services reduces its fee to 2%, and your card rewards give 2.5% cashback on all your purchases. You can put the extra 0.5% in your pocket by putting your rent on your card.

In short, When the reward rate of your card is higher than the fees for paying the rent, it makes sense to pay with your card. But as mentioned, finding such a deal is challenging.

2. Qualify for a Signup Bonus

Let's approach this with an example. You aim to qualify for a massive signup bonus of $1K for a card that requires $4K spent on the card in 3 months, but your expenses are only $1K monthly, meaning you will be $3K short.

By putting $3K of your rent on your credit card, you will pay approximately $90 in fees but now qualify for a $1K signup bonus.

In summary, if you are attempting to reach a minimum spend threshold for a credit card signup bonus or if your credit card offers rewards that outweigh the associated fees, then it will be worth it.

3. Emergency Coverage

In a financial emergency where you're short on funds, a credit card can help.

BUT USE THIS WITH A LOT OF CAUTION!

Putting a considerable balance on your credit card and accumulating credit card debt can create a huge monthly interest payment, which might get you into financial trouble, so make sure you have a solid repayment plan.

Read More: How to Get Out of Credit Card Debt

In these situations, it might also be worth talking to your landlord, informing them that you can make the payment right now and see if you can devise an alternative plan.

When Not to Pay Rent with a Credit Card

Here are some scenarios where it makes sense to avoid paying your rent with your credit card:

• If you're considering using your credit card to defer a payment, it's best to reconsider. This approach can lead to a debt cycle that could be difficult to break.
• It's also not advisable if the associated fees outweigh the convenience.
• If you're trying to maintain a low credit utilization ratio to get a better credit score, paying rent with your credit card will increase your credit utilization rate.
• When the rewards you get are not significant. Setting up rent payments on your credit card requires many additional steps which might not be worth your time.
• You need a high credit score to have a credit card with enough limit to pay rent. Typically, Credit cards with a low credit score requirement have a very low limit, meaning you can't put the total amount of rent on them.

How do you put rent on a credit card?

There are two primary ways to pay rent with a credit card:

Directly paying the landlord if they accept credit card transactions or use a third-party service.

1. Chexy

Chexy is our recommended choice for rent payment with a credit card. The other services we recommend further down in the list aren't specifically designed for rental payments with credit cards, so you will have a much better experience with Chexy.

With Chexy, you can pay your rent using any major Canadian card, allowing you to earn rewards and build credit on your rent payments. Chexy charges rent from your card 4 days before it's due and sends an INTERAC e-Transfer to your landlord on your behalf on the due date. The process remains the same for you, but now you can earn rewards and build credit on your rent.

They have also added pre-authorized debit as a form of payment so you can simply share your virtual wallet details with your landlord and let Chexy charge your credit card in advance to reap those rewards.

The charge for using your credit card for payment is 1.75%, which is very reasonable compared to the other methods. One important feature of Chexy is Chexy's Credit Builder, where you can have your largest monthly expense (rent) contribute to building your credit for a monthly fee of $9.99.

The great thing about Chexy is that they are partnered with a payment processor to categorize rental payments as recurring payments on credit cards! This gives you an opportunity to get more rewards than what you pay in processing fees if you use a card with a very high base cashback rate or increased rewards on recurring payments.

Read More: Best Recurring Transaction Credit Cards in Canada

How to gain hundreds of dollars per year in net cashback using Chexy

The math is simple. If you are paying 1.75% in fees and use a credit card that gives you much more in cashback, then you will be left with a net positive amount that you could pocket.

Using our reward calculator and only considering recurring transactions, there's one card in particular worth considering. The Rogers Red World Elite Mastercard is a credit card that can yield net positive value by paying rent. Note, however, that this credit card comes with annual spending caps, so your rent will need to sit somewhere below the yearly threshold, otherwise the rewards won't be worth it. You'll also need to meet some hefty annual income requirements to qualify.

This card's reward rate is highly dependent on whether you have a qualifying Rogers, Fido, Shaw or Comwave service. If you do, you can earn solid cashback on all your purchases when you put your earned cashback towards eligible service payments.

2. RentMoola

RentMoola, as the name suggests, caters to rent payments made with a credit card. It currently does not support mortgage payments. Fees may range from 0.99% to 3.99%, depending on the credit card used.

Always remember to weigh the associated fees and benefits before you pay your rent with a credit card.

3. Plastiq

Plastiq is another trusted third-party bill payment service available in Canada. Plastiq allows you to pay your mortgage provider or landlord, charging a convenience fee of 2.85% or less for all types of credit cards. It can either directly transfer the payment or send a cheque as payment to the landlord.

We have a full guide dedicated to the steps here, which discusses the steps you need to take to pay rent with a credit card using Plastiq.

4. Paytm

Paytm is a popular third-party bill payment service that accepts all rent and mortgage payments.

Unfortunately, Paytm has stopped its operation in Canada, and it can no longer be used to make rent payments; therefore, the alternative methods below must be used instead.

5. Paying Your Rent or Mortgage Directly from Your Credit Card

This option may be possible if your landlord or mortgage provider accepts credit card payments. However, this is typically rare due to the transaction fees banks charge. If your landlord takes this form of payment, you may find the transaction fee is passed onto you.

Conclusion

It is possible to pay Rent With a Credit Card in Canada, but there is no free way of doing so. If the landlord accepts Credit card payments, then there is usually a bank fee of around 3%. If they don't, you have to use a third-party service to make the payments using your credit card, which also charges a fee of around 2-3%.

Therefore, we generally don't recommend this method because, in addition to the fee, it can have a negative impact on your credit score as it increases your credit utilization rate. Also, it's not recommended to put the rent charge on your credit cards to differ the payments because the interest on the amount is very high on credit cards.

While keeping the drawbacks above in mind, the most likely scenario that rent payment with credit cards makes sense is when rent payments can be put on credit cards to qualify for a signup bonus when the signup bonus amount is higher than the fees associated with paying the rent with a credit card.