Our thoughts on paying your rent with a credit card
A few days ago we released a new feature called Pay with RadPad that enables renters to pay their rent using a credit or debit card. We’re very excited about this feature because it gives renters more convenience and options for paying their rent on time, every month.
First, some renting facts:
- Over 90% of all renters (about 90 million of us in the USA) have to write a check every month to pay our rent. For most of us it’s our only option.
- 47% of us between the ages of 21 and 35 live check-to-check.
- In L.A., 47% of renters spend HALF of their monthly income on rent
- In the last 18 months, rents have skyrocketed 8% – 12% in cities like Los Angeles, San Francisco, Washington DC, and New York City.
What does this mean?
A lot of renters are spending more of their income on rent every month than they used to.
Ok, so what is RadPad doing about it?
Pay with RadPad was built to offer renters more convenience and flexibility in how they pay their rent every month by giving them more options.
So why do we charge at all?
The short answer is that even in 2014, it’s still expensive to process credit card transactions and there’s just no way around the fees. This is why we also offer the option to pay on a debit card for free, regardless of the rent amount.
Being financially responsible.
USA Today published an article describing the benefits of paying by a Credit Card. Some of these include:
- If using a credit card is the only way you can pay your rent on time, the credit fee is often much less than a payday loan or the late fee your landlord will charge you.
- Paying your rent with a credit card can help you build or repair your credit score very quickly.
- Paying your rent with a credit card gives you cash back or other perks like airline points.
In each of these situations, it really only makes sense to use your credit card if you’re paying it off every month. We certainly don’t want renters falling deep into debt by racking up credit card fees.
So, how is it going so far?
We’re only a few days in from launch but so far, most renters using Pay with RadPad are paying with their debit card, not their credit card. And this makes lots of sense to us!
People want the convenience of RadPad paying their rent for them, but don’t want to rack up the credit fees. But for those who can’t make their rent on time or have decided they’re ok with paying the additional fee, the credit option is always there.
We’ll keep you updated in the coming weeks as we learn more about how people are using RadPad to manage their rent. If you haven’t checked it out yet, you can try Pay with RadPad for yourself here.