How to Pay Rent Using Credit Card in India?

Earlier, rent payments were mostly in cash.

Cash was the preferred mode of rent collection because landlords could evade taxes.

Income Tax department knows that cash is hard to trace. So, the IT department made it mandatory to submit the landlord’s PAN for HRA claims more than Rs 1 Lakh per annum.

While some landlords still demand cash, most have accepted that they have to pay taxes. This meant that you could choose digital payments.

Warning: Do not use a random PAN if your landlord refuses to share their PAN. Also, it is illegal to claim HRA if you are not staying in a rented accommodation.

The Digital Payment Era

Now it’s easier than ever to make rent payments.

You have NEFT, IMPS, and even UPI to make rent transfers.

Pro Tip: Use Google Pay to set up payments directly to bank accounts. Select “New Payments,” and then click on “Bank Transfer” to add the receiver’s bank details. The receiving party does not need to be a Google Pay user.

But there’s one downside to all these payment modes.

You need to have money in your bank account to make payments.

What if you are short of cash?

If you have an emergency fund in place, you can dip into it. However, not everyone will have a backup.

Enter – credit cards.

Why Use Credit Cards?

Use your credit card to pay your current rent. Pay it off later. You can even convert your rent into EMIs if you pay using a credit card.

How Does Rent Payment Using Cards Work?

Step #1: Register an account

Choose a service that supports rent pay using a credit card. The next section has two recommendations you can try.

Step #2: Provide the required details

1. Your details
2. The address of the residential property
3. Your card details
4. Landlord’s details
5. Landlord’s bank account details (Receiving account)
6. Landlord’s PAN (optional)
7. Rental information- frequency, the month for which rent is paid, and payment amount
8. Upload rent agreement (some providers ask for this)

Pro Tip: Make sure the bank account details are correct. Send a test transfer using Google Pay or Net Banking before adding it here.

Step #3: Make the payment

Go through the payment flow to make the payment. The payment will be rent amount + additional charges.

Some platforms will also let you set up auto-pay. If you enable auto-pay, your credit card will be charged automatically every month for the rent amount.

Pro Tip: I recommend turning off the auto-pay feature to retain more control.

Step #4: Money Transferred

The platform will charge money to your credit card. They will then transfer the money to your landlord’s bank account.

Both the tenant and the landlord will receive a confirmation message if the transfer is successful.

Depending upon the provider you choose, it can take up to 2 working days for the transfer to complete.

How to Make Rent Payment Using Credit Card?

Here are two popular service providers in India to pay rent using credit cards.

#1: Red Girraffe

Red Girraffe offers the ability to pay rent using your credit card.

PROs of the service:

• At 0.39% + GST fees, it’s the cheapest provider
• Genuine service
• Additional offers/coupons on regular rent payment
• Set it and forget it approach. I have paid 6 months of my rent through Red Girraffe

CONs of the service:

• The interface is clunky. There is an approval process in place
• You need to upload your rent agreement for rent > Rs 50,000 per month
• Payments are fully automated. To cancel your rent payments, you need to email them.
• Limited bank support – IndusInd, ICICI, HDFC, Kotak Mahindra, YES, Standard Chartered, Payzapp, and RBL

Once, I emailed Red Girraffe and got confirmation of cancellation. However, the rent payment still went through, and I ended up paying my landlord twice.

Advice: If you have a supported card, Red Girraffe offers you the cheapest rent payment option. If you don’t mind the outdated interface, consider Red Giraffe to pay your monthly rent.

#2: No Broker

No Broker is another prominent player I have used to make regular rent payments.

PROs of the service:

1. Slick UI
2. No need to upload rent receipts
3. Automated and manual rent payment using cards supported
4. All Visa and Master cards are supported
5. Quick deposit; rent usually gets deposited in a few hours

CONs of the service:

• High fees – 2% (including GST). Currently, they charge a 1% fee as a promotional offer
• Forces you to share your data with Experian in the name of “value add”

Advice: Use No Broker if you want a quick and easy way to pay your rent. Make sure the auto-pay is disabled if you’d like more control.

#3: CRED

CRED is an app that lets you pay your credit card bills. In addition, they also let you pay your rent using credit cards.

PROs of the service:

1. Supports AMEX cards
2. One app to manage all your credit card spending
3. Does not ask for the rental agreement

CONs of the service:

1. Some banks might not give you reward points for spending on CRED. Check with your bank if CRED is eligible
2. Currently, the costliest option for rent payment

#4: Housing.com

Housing.com, along with a bouquet of other services, now offers rent payment option.

PROs of the service:

1. Really simple experience
2. Supports most popular cards except AMEX and Diners
3. No need of rental agreement upload

CONs of the service:

1. Downloadable rent receipt is missing
2. Amex and Diners are not supported

Why Pay Your Rent Using Your Credit Card?

#1: Defer payments when needed

Not having enough money to pay the rent can happen to anyone. You can use credit cards to offset your financial issues temporarily.

Pro Tip: Paying using a credit card comes with a cost. If you have financial troubles, first speak with the landlord. See if they are OK with delayed payment. Use cards only when negotiation with your landlord fails.

#2: Improve Credit Score

For people who just started their career, you might not have any credit score. You can use your credit card to build up your credit score.

Pro Tip: Make sure you pay the credit card in full. Your credit score will drop if you miss payments or revolve the credit facility.

#3: Earn Reward Points

Personally, reward points are the main reason I use credit cards to pay my rent.

If you use Red Girraffe, you will end up paying about 0.4%. If your credit card reward rate is higher than 0.4%, you make money by paying rent using cards.

Pro Tip: Check with your bank if rent payments qualify for reward points. Some banks might not consider rent payments as retail spends that are eligible for reward points.

#4: Earn Additional Interest On Your Money

If you are someone who likes to extract every rupee in value, then card payments might interest you.

If you can defer paying rent for 30-45 days, you can keep the money in liquid funds.

That means you can potentially earn an extra 0.5-0.6% on your money.

For rent of Rs 30,000 per month, the savings translates to roughly Rs 2,000 per year.

Warning: Don’t invest in risky investments like equity or P2P lending for arbitrage. Keep the money in your bank savings account, or move it to a liquid fund.

#5: Automated Payments

If you are someone who constantly forgets to pay rent on time, you can choose automated payments. On the specified day, the rent will automatically be charged to your credit card.

Pro Tip: Most landlords will not charge you a late fee if you delay payments. So use this option only if you really need it. E.g., you constantly travel and might not always be able to make the transfer on time.

#6: Rent Receipts

All salaried employees who receive HRA have to submit rent receipts.

If you pay your rent online, the rent receipts are automatically generated and emailed to you.

That’s one less thing to worry about.