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How is rent paid with credit card treated?


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Not sure if this is the right section.

I believe I remember a discussion here (or maybe it was on another board) in which someone wanted to pay off a time-share mortgage with a credit card, and was not sure if it would be treated as a cash advance or as a purchase.

Anyway, the hub and I would like to pay one month's rent with a credit card (not bank debit card ACH as we usually do) and the company does accept credit card payments. We're curious if anyone knows whether this is generally treated as a purchase or if it might be treated as a cash advance with big fees and interest. I guess I could always call the CC company and ask but It thought this might be common knowledge around here.

I'm not asking for financial advice on whether this is wise long-term or short-term or anything like that. I won't go into details but it has to do with wanting to free up that cash to put into a brokerage now, so don't worry about that aspect of it.

So, does anyone know if the CC company will most likely post that charge as a normal purchase? We do have room on the card, of course, and for reasons I also won't go into right now, I'm not especially concerned with utilization - that's an issue I'm going to work on in a few months (again, not going to bore anyone with details regarding that because it's a different subject.)

Thanks in advance if anyone knows the scoop on this issue!

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If they swipe your card for your rent, it would be a purchase...not a cash advance.

But from a purely debt-relation view I would advise against it. It is never a good idea to pay for intangibles with credit cards. You can never make enough investment income to cover the outlay from using credit that way.

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I'm not sure what you mean about never making enough on investments. Recently I made 10% in just two months which makes juggling things around worthwhile. (I'm intending to pay in full ASAP).

I'll find out soon enough how it's handled. If I have to eat some sort of cash advance fee, it'll be an expensive lesson, but at least I'll have my answer.

*Oh, I see what you're saying: How much am I really going to gain in a month on the $1,179 I can invest? But normally if you pay a CC bill in full before it's due, you pay no interest on that transaction. So it's just a month of float to me. Maybe more a psychological benefit than a financial one. Oh well - we'll see how it turns out.

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I'm a landlord and I do take credit cards. I should have mentioned that up-front. It's a purchase, not a cash advance.

If your landlord does it as a cash advance, they...

#1 have to have a special account provision for doing cash advances because without that it is a violation of the card processing agreement to give the customer cash back.

#2 they would have to actually give you the cash. Taking a cash advance for a service or product would violate the card processing agreement.

That is unless the landlord is breaking their contract provisions to try and avoid paying the vendor processing fee. They could loose their processing account if they are caught doing that.

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We did this today and found out that they (rental co.) charge us a fee that basically is just enough to cover their merchant fee (2.5% ? I forgot - hub told me on instant messenger). I'm sure I won't be doing it again but it's no huge deal this time.

As I told the hub - I don't blame them; it seems fair enough and I'd do the same, in their position. Landlords don't want to pay such a big margin on such a big charge - and paying rent by credit card is.. well, weird. Many people pay it by ACH, but I guess that is different.

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Well if you want to bounce them, you can.

The merchant agreement also states they cannot pass on their processing fee to the customer or offer "cash discounts" or do anything else that would discourage people from using their card in favor of another form of payment.

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Well if you want to bounce them, you can.

The merchant agreement also states they cannot pass on their processing fee to the customer or offer "cash discounts" or do anything else that would discourage people from using their card in favor of another form of payment.

So very true. Itsa illegal, I went to a bodega once and they tried to make me pay a surcharge for using a CC, I left everything there, but had I known then, I would have gone after them.

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