Using credit cards to pay rent As fintech apps and UPI-based rent payment apps gain popularity, many Indian renters are now paying rent via credit cards. The motivation is simple: you earn reward points, manage cash flows more efficiently, and even gain interest-free periods at times. For high-value monthly rents, especially in major cities, credit cards are a way of maximizing expenditure while staying liquid. However, there are risks and costs, too, which you need to know about.
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The advantages: rewards, flexibility, and emergency liquidity Rent paid via a credit card can earn you points, cashback, or air miles depending on the credit card issuer. Rent payments also contribute to quicker milestone benefits or spend-based annual rewards credit cards. Rent payment also allows you to stretch actual cash outgo by 45-50 days within the interest-free period. This is particularly helpful during emergencies, cash crunches, or when you match costs with your salary credit date.
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Surcharges and convenience fees: hidden charges Most sites that allow rent to be paid through credit cards levy a convenience charge—usually 1% to 2.5% of the rent. For a rent of ₹30,000, this could translate into an additional ₹300 to ₹750 per month. Some issuers also consider rent payments quasi-cash transactions, which means they might not reward points or may penalize in the form of higher interest rates and charges. Check the issuer's terms and site conditions carefully to prevent unexpected deductions.
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Impact on credit usage and risk of debt Large monthly rent payments can increase your credit utilization ratio, which will lower your credit score temporarily. If you pay your credit card charge over time instead of paying in full, the interest fees that are up to 30% to 42% annually on average can make you accumulate debt. Experts recommend using a credit card to make regular, high-cost bills like rent only if you're sure that you can pay the whole bill each month.
Tax reporting and rent receipts Platforms typically provide rent receipts, which can help salaried employees claim HRA exemptions. However, the convenience fee charged is not included in the rent component for tax purposes. If you’re a landlord accepting rent through credit card platforms, ensure that the amount received is net of fees and properly recorded for income tax filing. This will help avoid confusion during tax assessments.
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Use credit cards to pay rent with caution Using credit cards to pay rent in 2025 has advantages some in terms rewards and cash flow flexibility, but also includes additional costs and risks which may weigh against it. Balance your capacity to repay a monthly amount, card terms, and convenience fees before jumping in. It's an easy-to-use tool if used well—but one that could end up being a costly burden if not.
