Paying rent with a credit card seems like an easy way to hit milestone spends and earn massive rewards. However, recent changes by Indian credit card issuers have completely altered the math.
The Costs Involved
When you pay rent via third-party platforms (like Cred, RedGirraffe, or Paytm), you are charged a convenience fee, typically ranging from 1% to 2%. On top of this, you must pay 18% GST on that fee.
For a ₹30,000 rent payment at a 1.5% fee + GST, you pay an extra ₹531.
The Bank's Surcharge
Recently, major banks have started charging their own fee for rent transactions (often 1% + GST) in addition to the platform fee. Furthermore, many premium cards have completely excluded rent payments from earning reward points.
Doing the Math
If your transaction costs total 2.5%, your credit card must provide a reward rate higher than 2.5% just to break even. Given that most cards exclude rent from rewards or cap them significantly, paying rent with a credit card is now rarely profitable.
Exceptions: It may only make sense if you are desperately trying to hit an annual fee waiver threshold and have no other expenses.