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Photo: iStock
Photo: iStock

Pay rent by credit card only in an emergency

Any default on your credit card bill payment will only add to the cost substantially and also affect your credit score and the interest rates on credit cards can go up to 30% per annum

House rent is one of the biggest spends that’s non-discretionary in nature. Usually, you pay rent either through post-dated cheques or cash, but what if you could pay it by credit card? While such a big-ticket regular expense on your credit card could help you earn substantial reward points, it could also land you in debt if you are not careful.

Two online platforms, NoBroker.in, a property listing website without any intermediary, and RentPay, a rental payment facility of UK-based fintech Redgirraffe, have come up with a facility to let you pay rent through a credit card. Let’s understand how you can use the facility on both the platforms.

In the case of NoBroker, you first need to register with the platform. You will then have to provide the details of the landlord, including his bank account details. You are then ready to pay by credit card. In the case of RentPay, you will have to fill in the details of both the tenant and the landlord. You also need to upload the rent agreement when filling in tenant details. After you submit all the details, you will be issued a unique Redgirraffe ID. Register this ID with your bank.

You can also give standing instructions to your bank to automatically pay the rent through your credit card. It will take a few days for the rent to be credited in your landlord’s account. For example, NoBroker takes around two days to credit the rent to the landlord’s account. It even allows you to pay the monthly rent using the net banking facility.

Both the platforms will directly send the rent receipts to the email ID of the tenant, who can use them directly when submitting tax proofs to claim a deduction against house rent allowance.

Remember that you will have to bear extra charges to avail of this facility. NoBroker charges 1% of the monthly rent paid as transaction charges. So, on a monthly rent of 20,000, you will end up paying 200 extra. RentPay charges 39 plus GST for every 10,000 of rent paid. For a rent of 20,000, you will end up paying 78 plus GST.

This facility can come in handy in case of a financial emergency as it will give you a month’s time to arrange the required funds. However, remember that any default on your credit card bill payment will only add to the cost substantially and also affect your credit score. Interest rates on credit cards can go up to 30% per annum. Weigh the costs to decide if you really want to go for the facility.

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