Good Lifestyle

When it comes to many people Monthly Budget , Rent is generally the largest expenditure on the list. For millions of us to praise our living spaces in the United States, it may seem that the cost is increasing constantly and is higher, which is more difficult to maintain each month. But as various financial companies have started to encourage people to pay their rent with a credit card, some may see this as the response to pay on time as price pressure rises. However, it is not always a faulty security solution, according to financial experts. Read the rest to discover what they say to be the risks and benefits of paying your rent with a credit card.

Read this then: Never use your credit card for these 6 purchases, according to financial experts .

While inflation climbed to new heights last year, it took a clear number on the capacity of many people to make their monthly payments.

A 2022 report of the mysing commercial real estate site found that on 15% of people In the country - or around six million American households - have lagged behind their rent payments in the fall. In some states, this percentage has increased to almost 25% of tenants.

This can partly be attributed to the fact that the cost of renting an apartment increased by 17.6% in 2021. "The ever -increasing cost of rent leads to financial difficulties for a relatively significant percentage of the population in each state" written in their report.

Some people may try to avoid this problem by taking advantage of an upward trend of tenants: the use of a credit card.

"In recent years, I have seen how the payment of rent with a credit card has slowly gained ground," explains Joel Comino , who worked with many owners as a founder of construction of houses following modular company.

This trend was partly motivated by the launch of financial companies Credit card programs This pushes the youngest to consider covering important expenses such as rent in this way, Buzzfeed News recently reported.

Jack Lamarre , a 24 -year -old social media in San Francisco, told the media that he had started paying for his monthly rent of $ 2,600 with his credit card after registering for a new Wells credit card Fargo who encourages this.

The well -known financial company in partnership with Bilt Rewards and Mastercard in 2022 to "issue the first credit card which earns points on rent payments without transaction costs", as indicated by a press release. In other words, using the Bilt Mastercard De Wells Fargo allows tenants to bypass all transaction costs that owners can charge payments by credit card.

But a quick search on Google shows that it is not the only financial company that pushes the credit card services designed to pay the rent. Melio and Plastiq are also two popular offers in this space.

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This trend does not increase without reason. After all, there is the obvious advantage to pay with a credit card, that is to say that you can make your rent payment in time even if you do not have enough money in your bank account at this moment.

"The most important advantage of paying the rent with credit cards is that you can honor the rental obligation even when you do not have liquid funds," explains Tom Koesternen , A approved financial analyst who works as a consultant for guaranteed loans. "The credit card option allows you to pay now and reimburse later."

But it is hardly the only advantage. Tenants can earn awards and bonuses by paying for their credit card each month, also says Bill Ryze , a certified approved financial consultant du Tennessee and advisor to the board of directors in Fiona. "You can later buy back the reward points you earn and enjoy major discounts," he explains.

Ryze notes that payment of rent with a credit card can also help improve your credit history, in turn by increasing your credit scoring. "Most young people have trouble with their credit ratings because they have no credit history," he said. "So if you are young, using your credit card to pay the rent can build your history."

These advantages could ensure that payment of your rent with a credit card seems to be obvious-until you consider the risks, that is to say. AE0FCC31AE342FD3A1346EBB1F342FCB

Jake hill , A expert in finance And the CEO of Debthmammer, says Better life That it can quickly and easily become a "rabbit hole for disaster for debt".

"I would never recommend people to follow this," said Hill. "If you are already inclined to postpone a big balance each month and to fight to obtain a lifestyle without debt, then this credit card would only lead you to despair and distress."

That is why Jeanne Kelly , A credit coach With more than 20 years of experience by offering personal services, indicates that you should only consider this strategy if you are sure that you can reimburse the balance of your credit card each month. "You risk the possibility of accumulating interest costs if the balance is not reimbursed before the due date," she warns.

You must also pay attention to the use of credit, which is the percentage of your credit limit that you use, according to Kelly. "If the use of your rental credit card results in considerably increasing your use of credit, this could have a negative impact on your credit scoring," she explains.

Thus, in the end, "if the advantages prevail over the risks of paying the rent with a credit card depends on the circumstance and individual preferences", explains Marcus arcabascio , THE financial director Credit cooperatives in the United States. "In the end, it is preferable to weigh the advantages and disadvantages before deciding if the payment of rent with a credit card suits you," he advises.

Best Life offers the most recent financial information of the best experts and the latest news and research, but our content is not supposed to replace professional advice. Regarding the money you spend, save or invest, always consult your financial advisor directly.