For many of us, rent is one of the biggest costs in life. We spend thousands of dollars each year on rent, with the money usually flying out of our bank accounts as a direct debit – and without earning any rewards points.
But what many tenants don’t realise is that there may be a way to leverage this spending and earn points by paying with a credit card. If you’re a tenant and you haven’t looked into this, you could be missing out on a big opportunity to earn points.
Your first step should be to contact your real estate agent to ask if this option is available to you. More and more agents are offering this payment method these days.
(But a word of warning: my agent wrongly told me it didn’t accept credit cards when I first asked. After a quick google search, I discovered the opposite was true. So if you’re told no, double check).
Once you’ve confirmed that you can pay rent by credit card, it’s very important to check the fees involved to work out if it’s a good deal. There is a real risk the cost isn’t worth it.
I recently wrote an article explaining how to work out if the ‘cost’ of paying extra to earn points is worth it, and you can read that here.
In my case, my real estate agent accepts card payments through RentalRewards, which costs $5 per month plus 1.76% of the rent amount. You may think that cost is quite high, but I’m happy to pay it with my Amex Explorer Credit Card, which earns the equivalent of 1.5 frequent flyer points per $1.
Here’s why: the cost per point works out to be 1.2 cents, and since I can deduct some rent in my tax return (as I have a home office), the cost falls below 1 cent per point, which I’m happy to pay.
I’ll easily get much more value from those points when I redeem them for business or first class flights. This is how I know it’s a good deal for me (to work this out for yourself, check out my recent post on the topic.)
There are other services like RentalRewards, and I’ve heard that the fees they charge can vary depending on the real estate agent.
Generally, I’d say you need a high points-earning Amex card to make the cost worthwhile (as Visas and Mastercards have much lower points earn rates).
The three Amex cards with the highest earn rates are:
- Qantas Amex Ultimate Card, which earns 1.5 Qantas Points per dollar
- Amex Velocity Platinum Card, which earns 1.5 Velocity Points per dollar
- Amex Explorer Credit Card, which earns 2 Membership Rewards Gateway points per dollar (equivalent to 1.5 frequent flyer points).
I earn over 50,000 points each year by paying my rent with my Amex card, and it’s a key part of my strategy for earning over 500,000 points each year – and always flying in style!
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