June 27, 2024
Question:
I have been reading about people paying their rent and taxes with their credit card for the travel points. Is this a good idea?
Answer:
While everyone’s circumstance is different, in general it is not a good idea to pay rent or taxes with a credit card.
If you do not pay your credit card bills in full every month, it is not worth accumulating points on a travel credit card.
There is often a roughly 3% fee to pay bills like rent and taxes with a credit card. That’s a high bar to make the points “pay for themselves”.
Caveat: many credit cards incent new customers with a huge points bonus when they spend a certain amount in the first 3 or 6 months.
If you need to charge rent or taxes to earn the bonus and you pay your credit card bill in full every month, then there may be a benefit.
For more information, here is an article from the Wall Street Journal that I found on the subject.