Author Topic: Paying rent with rewards CC, does this make sense?  (Read 3844 times)

Fireman

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Paying rent with rewards CC, does this make sense?
« on: May 08, 2014, 09:06:32 PM »
I recently received my new Barclaycard Arrival CC with 2% rewards on travel.  My apartment complex allows tenants to pay their rent with a credit card but charges a $19.99 fee.  Now, i'm just as much opposed to paying more money than I have to as everyone else here, but...

My rent and the fee combined total about $1200.  If I pay this on the card, i'll receive $24 in rewards plus an additional $2.40 credit back to my rewards balance when I reimburse travel expenses.  To me, this looks like a net gain of about $6.40 despite the fee. 

This doesn't take into account the sign on bonus, i'm just trying to figure out if paying the rent every month to build miles is worth it.

Am I missing something?  Did I forget to carry the three or divide by pi? 

juanofthesedays

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Re: Paying rent with rewards CC, does this make sense?
« Reply #1 on: May 08, 2014, 11:00:02 PM »
Short answer to is it worth it, sort of. There is clearly a positive rate of return from using the card as described (paying the fee and receiving the points worth more than the expense of earning them).

However, it requires you to spend money elsewhere on travel related costs. If you were 100% inevitably going to have non-reimbursable travel expenses for which you can redeem points, I suppose it makes sense if the sign up bonus is large enough. If you lived at a place for two years, your would have $153.60 (24*6.40) to spend on travel, plus perhaps a $200 sign up bonus, or $353.60, net, assuming no annual fees.

 


HairyUpperLip

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Re: Paying rent with rewards CC, does this make sense?
« Reply #2 on: May 09, 2014, 06:57:31 AM »
I recently received my new Barclaycard Arrival CC with 2% rewards on travel.  My apartment complex allows tenants to pay their rent with a credit card but charges a $19.99 fee.  Now, i'm just as much opposed to paying more money than I have to as everyone else here, but...

My rent and the fee combined total about $1200.  If I pay this on the card, i'll receive $24 in rewards plus an additional $2.40 credit back to my rewards balance when I reimburse travel expenses.  To me, this looks like a net gain of about $6.40 despite the fee. 

This doesn't take into account the sign on bonus, i'm just trying to figure out if paying the rent every month to build miles is worth it.

Am I missing something?  Did I forget to carry the three or divide by pi?

Not sure for your card, but I had asked one of my previous landlords if he would accept my AMEX skymiles. I even offered to pay a little extra. Rent was 1100 a month. That's 1,100 miles a month. I would pay an extra $20 for that myself.



nereo

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Re: Paying rent with rewards CC, does this make sense?
« Reply #3 on: May 09, 2014, 07:06:58 AM »
Check the fine-print for your CC.  Many won't count person-to-person (or even small-business) transactions as eligible for rewards. Too easy to 'goose' the rewards programs that way.

The Money Monk

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Re: Paying rent with rewards CC, does this make sense?
« Reply #4 on: May 09, 2014, 07:17:59 AM »
see if you can pay multiple months at once, and then you'll just pay a single $20 transaction fee while paying 3 or so months rent. Save you 40 to 60 bucks.

Assuming you have enough money to pay off that much on your card within a month.

Fireman

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Re: Paying rent with rewards CC, does this make sense?
« Reply #5 on: May 09, 2014, 07:45:46 AM »
If you were 100% inevitably going to have non-reimbursable travel expenses for which you can redeem points, I suppose it makes sense if the sign up bonus is large enough.[snip].assuming no annual fees.

I'm planning a trip to see my sister in England this fall so the travel rewards would go towards reimbursing that cost.  The card has a 40,000 mile sign on bonus and it also returns 10% of miles spent on travel to your rewards bank.  There is an $89 annual fee but it is waived the first year.

Check the fine-print for your CC.  Many won't count person-to-person (or even small-business) transactions as eligible for rewards. Too easy to 'goose' the rewards programs that way.

I haven't had any issues so far with two 5% categories cards and a 1.5% card.  I'll definitely check the card agreement and benefits.

see if you can pay multiple months at once, and then you'll just pay a single $20 transaction fee while paying 3 or so months rent. Save you 40 to 60 bucks.

Since water, trash, and a few other negligible fees are included in my rent, it varies each month by a couple bucks.  Therefore I wouldn't be able to pay the exact amount a couple months in advance.  However, I will give them a call and ask if it's possible.  Good call!

juanofthesedays

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Re: Paying rent with rewards CC, does this make sense?
« Reply #6 on: May 16, 2014, 10:16:50 PM »
Just as a life hacking side note regarding the annual fee, most reward credit cards (especially the airline ones) will have a steep 59-499 annual fee, but like you said are waived for first year. I have signed up for various Citi American Airlines cards, completed the required purchase to receive the 30,000 or so bonus miles, then cancelled 9 months in before the new fee takes affect. I typically reward the issuer with my business (I travel for work and have lots reimbursable purchases), but when I do close, I get an offer to receive a statement credit in the amount of the annual fee, effectively getting the sign up bonus, plus rewards free for two years. Worth a shot.

Also, if you do close before the year is up and wait some negligible undisclosed period of time (typically 9 months - 1 year) you can start the party all over. I am on my third American Airlines Citi Mastercard over the past 6 years and those 90,000 miles let me fly two people to czech republic from us and one round trip to memphis (exotic, I know).

Enjoy the trip!