Can You Make Rent or Mortgage Payments with a Credit Card in Canada?
Your or payments are likely some of your largest monthly bills, so at some point you’ve probably contemplated shifting these major expenses onto your , in the hope of either solving a temporary issue or earning back a heap of rewards each month.
It’s indeed possible to or a with a in Canada. That said, it’s an atypical payment method and you’ll likely need to jump through some hoops to pull it off. Are the potential payoffs worth the unavoidable headaches?
In This Article:
What Are the Benefits of Making a or with a ?
It might sound counterintuitive to pay off a large bill like a to or a . or with even more . However, there are several potential advantages to using a
If you have a high-earning or back cardrewards card, using it to pay off large bills like your or can potentially earn hundreds or even thousands of dollars back per year.
Qualify for Sign-Up Bonuses
Paying off large expenses can help you quickly meet spending requirements for big sign-up bonuses, a key strategy for those who churn . cards
If you don’t have an emergency fund, a sudden life expense might make it difficult to pay your or on time, potentially resulting in costly fees, damage to your , and/or eviction. By paying your or with a you might be able to alleviate temporary and secure time to get your finances back on track.
What Are the Drawbacks of Making a or with a ?
Using your to pay monthly bills can help you earn rewards and build up your credit score, but there are also several downsides you should consider before reaching for your plastic to cover housing expenses:
Most landlords and lenders won’t directly accept chequing or savings account to make your housing payments. payments from their tenants or borrowers, so you’ll probably need to enlist a third-party processor to make housing payments with your card. These intermediaries often charge 2.5% or more on payments. If your is $2,000 per month, that’s $50 in fees per month or $600 annually. If your don’t outweigh this cost by a significant margin, you’re better off using funds from a
Your is the percentage of your total available utilization limit that you’re using. Repeatedly using your to pay large expenses can inflate your utilization, and having a high utilization—above 30%—will negatively affect your .
Most landlords and companies don’t accept payments by default, so you should anticipate sending several emails or calling your / to verify that you can actually use a to make your . You should also confirm if any third-party provider is an acceptable method, or if you can only pay via specific intermediaries.
Another downside of using a balance runs the risk of missing payments and incurring a high on your . for paying your or is that you take on additional . If you’re simply looking for and you plan to pay off your card balance immediately with from another account, this isn’t necessarily an issue. But sitting on an outstanding
Many of the best rewards free from credit bureaus Equifax or if you want to check your existing score. cards require a good to excellent or a certain annual household . If you have a low or shaky , you might not qualify for a that’s worth paying your or with. You can request a
How to Make or Payments with a
PaySimply is one platform that lets you pay bills like , utilities, property taxes, and your . options include cards like Visa and Mastercard, PayPal, e-Transfers, and or debit payments at Canada Post. PaySimply charges a 2.5% on all payments. Similarly, Plastiq lets you pay your and via for a 2.85% . However, PaySimply is more flexible since Plastiq only accepts Mastercard and Discover cards for payments.
Alternatively, you can ask your if they’re able to use RentMoola to manage monthly payments. RentMoola helps landlords manage their rental properties, run checks, and accept online payments from tenants. For renters, RentMoola lets you schedule recurring payments, earn , and costs 2.5% for rental payments.
Will Your ? or Accept a
Landlords typically request payment by cheque or transfer from their tenants. Similarly, borrowers normally pay their by setting up automatic withdrawals from a chequing or savings account or by completing payments on their ’s website.
If you want to make your with a , start by asking your if it’s a method they can accept. It’s unlikely that an independent will accept direct payments, and if your is technophobic you might have your work cut out for you convincing them to try new digital solutions like PaySimply or Plastiq.
However, if you’re renting from a rental management company, ask your methods. Large property management companies may have an online portal where you can use your to pay your , and they might charge lower fees than third-party processors. about acceptable
As for paying your lenders are typically wary of accepting -for- payments, so it’s unlikely you can make payments with a without using one of the aforementioned third-party services as the intermediary. with a , it’s a similar scenario.
What Are the Best Cards for Paying or a ?
The main drawback of making a or with your is that you’ll likely incur third-party fees, and your card may not have a high enough rewards or back rate to make up for those. Before you make the transaction consider the below options, which might be better designed for making housing payments than your current go-to card.
|Card||Key Feature||Sign-Up Bonus||Annual Fee|
|Scotia Momentum® Visa Infinite* Card||4% cash back on recurring bills (up to $25K spent annually)||Earn 10% cash back on all purchases for the first 3 months (up to $2,000 in total purchases).¹ No annual fee in the first year, including on supplementary cards.¹ Offer ends April 30, 2023.||$120||Read full card review|
|TD® Aeroplan® Visa Infinite* Card||Earns Aeroplan points†; great for frequent Air Canada and Star Alliance flyers||Special Offer: Earn up to 55,000 Aeroplan points†. Plus, first year no Annual Fee†. Conditions Apply. Must apply by May 28, 2023.||$139 (first year annual fee rebate)†||Read full card review|
|Tangerine Money-Back Credit Card||Up to 2% cash back on recurring bills||Apply by May 2nd, 2023 and earn an extra 10% back (up to $100) when you spend up to $1,000 in everyday purchases within your first 2 months.*||$0||Read full card review|
|SimplyCash® Preferred Card from American Express||Earn 4% cash back on eligible gas station purchases in Canada, 4% cash back on eligible grocery store purchases in Canada (up to $1,200 cash back annually) and 2% cash back on all other purchases.||In your first 10 months as a new SimplyCash® Preferred Card from American Express Cardmember, you can earn a $40 statement credit for each monthly billing period in which you spend $750 in purchases on your Card. This could add up to $400 in statement credits in the first 10 months. Conditions apply.||$9.99/month (Equals a total fee of $119.88 annually)||Read full card review|
†Terms and conditions apply / *Terms and Conditions apply
Offer for TD® Aeroplan® Visa Infinite* Card is not available for residents of Quebec. For Quebec residents, please click here.¹ Conditions Apply. Visit here for the Scotia Momentum® Visa Infinite* Card to learn more.
Should You Pay Your or with a ?
There’s a reason most landlords and lenders don’t accept payments by default: Paying off large amounts of with more can be risky. That said, there are several scenarios where paying off your or with a can make sense:
- The Math Checks Out: Using your can make sense if the points or back from your card keep more in your pocket after factoring in fees charged by third-party intermediaries. You might elect to make or payments with the card just to max out your potential welcome offer, and then go back to making those or payments with cheques after the welcome period ends.
- You Can Pay Off Your Card Immediately: Ideally you should always pay off your balance promptly with from your bank account so as to avoid interest charges.
- You Don’t Have High-Interest if you’re already dealing with other , like additional balances or personal loans. This isn’t a requirement, but it’s best to avoid taking on additional
On the other hand, there are several scenarios where paying off your or monthly with a is a bad financial choice:
- You’re Late Paying Your Bills: If you’re historically late on paying off monthly bills, taking on additional is even riskier and can put you further into .
- You’re Worried About Your Having a high utilization rate can hurt your . If you’re trying to improve your , this strategy isn’t for you.
- You Have a Lackluster If you aren’t earning oodles of back or rewards points from your , the fees from using a third-party service to pay your housing costs will do you more harm than good.
In a nutshell, with enough rewards and a lucrative sign-up bonus, paying housing expenses with a overpaying for , or to cut some of your expenses and gradually divert toward can make sense in some scenarios. But if you’re resorting to payments because you don’t have enough on hand, it might be time to reassess if you’re building your homeowner emergency fund.
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