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With the CoronaVirus situation having affected the liquidity of many people around, I finally decided to write about how to pay your rent on your credit cards. I am aware that a lot of people may be at a stretch at the moment with their finances, but in no way am I advising anyone to roll over credit, but I am definitely offering a way out that has existed for a long period of time to pay rent, which I would assume is a significant portion of monthly expenses, with your Credit Cards.
There are many reasons to look at paying rent/lease/howsoever else it is referred to in your contracts to use a residence or an office space with your credit cards:
- Big spends, so get you closer to your milestone spend quicker
- In the case of many credit cards, and depending on the payment processor you use, you get reward points as well
- You get to stretch your liquidity for about another 30-45 days
- As long as you are paying it back in good time, your credit reports get impacted positively.
There are many companies that offer the ability to pay rent and other expenses with your cards. Here are some of the ones I know about, along with their pros and cons, as well as their transaction fees.
RedGirraffe has been one of the oldest service providers offering the ability to pay rent on your credit card in India, and they call their Rent Payment product RentPay. With RentPay, you can pay your home or office rent on a monthly basis with your credit card. The charges applicable for paying with RentPay are minimal, just 0.39% + GST of the amount payable on a monthly basis. The minimum fees are INR 39 per transaction.
For activating RentPay, you need to submit the details of your landlord and their bank account number as well. Not just that, you will need to submit a PDF copy of your active lease and fill up a short form as well. I have been using their services for the past three years or so, and every month, they work like clockwork, debiting the amount from my credit card and doing a wire transfer to my landlord within 2-3 days of debiting the amount. For the landlord, the money comes in as an NEFT transfer, so they don’t have any bother about any deductions to their amount, and for me, I just have to pay 0.39% more for the ability to get reward points for my payments.
However, RedGirraffe works only with select card issuers, which include HDFC Bank Credit Cards, IndusInd Bank Credit Cards, ICICI Bank Credit Cards, Kotak Mahindra Bank Credit Cards, YES Bank Credit Cards, PayZapp, RBL Bank Credit Cards, Standard Chartered Bank Cards and HSBC Bank Cards. Post-registration, verification by RedGirraffe usually takes around a week. Depending on the bank you register with, service activation might take anywhere between 10 working days to a month.
At least to my knowledge, however, RedGirraffe RentPay is not available for Adhoc transactions, and hence you need to do the paperwork to ensure a long-term standing instruction to use RentPay. RedGirraffe states there is an InstaPay service available for ad-hoc payments but I just can’t seem to find it active on their website.
[PS: Mind the spelling, it’s RedGirraffe with a double R and a double F]
NoBroker Pay, as NoBroker calls its rent payment product, has been the second mover in the rent payment market and been around since January 2019. NoBroker works on a fixed fee model, which continues to increase it seems over a period of time.
For activating NoBroker RentPay, you need to submit the details of your landlord, their bank account number and PAN Number as well. Rent transfers are on their way pretty quickly (within 2 working days). NoBroker needs your landlord’s PAN number if you are making a payment above INR 50,000 as monthly rent. No rent agreements are required unless specifically asked for by NoBroker.
You can make an ad-hoc rent payment or you can set a monthly auto-payment. The benefits of using NoBroker are that you will be able to use all sorts of credit cards from any bank. Visa, MasterCard and American Express cards are accepted. NoBroker claims to be having issues with Diners Club cards for the time being. The charges are 2% of rent paid, but for the moment these have been reduced to 1% for payments under INR 75,000 and 1.5% for payments above INR 75,000. With American Express credit cards, NoBroker payments don’t count for Membership Rewards earning but count towards milestone benefits.
In April 2020, CRED has also rolled out a Credit Card based payment platform for the payment of rent called CRED RentPay. CRED’s product does not need any paperwork and is easy to set up to make the payments. You can set up your rent payment to be paid via a credit card or via UPI. In case you choose to pay via your Credit Card, which includes Diners Club, Amex and MasterCard/Visa, you will be paying 1.5% over and above the amount for CRED’s commission and processing fee of the rent. You can pay an amount of up to INR 2,00,000 with CRED’s rent product at the moment. Again, for rent payments over INR 50,000, you will need to provide a PAN card number as well.
CRED does not offer a monthly rent auto-payment option at the moment, and also their fee looks high in comparison to the other more established options in the market such as RedGirraffe.
Housing.com Pay Rent
Joining the rush of new entrants who want to use rent payments to bring customers to their products is Housing.com, the online property search portal. They recently launched a product for Rent payment as well. Housing.com’s rent payment product only works with Visa and MasterCard products for now.
Housing.com launched with a 0% promotional offer, however, they are now charging 1% fees towards rent payment. The rent payment tends to get settled pretty quick, usually the same day.
There are other payment processors in the market as well which can help you with Rent payments, however, these are usually very high, so we won’t go into much detail about them.
- PayMatrix.in: Accepts all sorts of cards including American Express, however, be ready to pay 2.36% on top of the amount you need to pay when using Credit Cards to pay. PayMatrix does not accept Diners Club Credit Cards at the moment. Rent payments are transferred within T+2 working days. In case you want the payment to reach the other party within 24 hours, it would be another 0.3% for the perk (2.7% total).
- PayDeck: Accepts MasterCard/Visa cards. Be ready to pay 2.5% on top of the amount you need to pay when using Credit Cards to pay. PayDeck payments are transferred within T+1 working days. In case you want the payment to reach the other party within 24 hours, it would be another 0.15% for the perk (a total of 2.65%).
Overall, here are the six major options you have towards Payment processing in India for your rent, and in some cases, other products too.
I’ve been doing my rent payments with my credit card for a very long time, and I think it is one of the most convenient ways of making sure your rent gets over to your landlord in time, and also that you end up getting points for the effort. Why leave any points on the table?
As for a landlord’s perspective, I’ve heard from many people they’d like to discuss this with their landlord but there is nothing to discuss here. As long as they get their rent payment in full, they are happy. How it reflects on the bank statements should not be a worry at all.
Have you been using your credit cards to pay rent? Let us know about your experience.
ProTip: Now that PayZapp is on the RedGirraffe platform, you can use RedGirraffe to pay with any credit card and not just those partnered by the company.
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