Finding a rental that you can actually afford is becoming increasingly difficult, especially in cities like New York or San Francisco. You may be thinking, “I might as well be paying for a mortgage at that price.”
That said, a new Redfin study revealed that buying a house is even more expensive than renting – unless you live in four specific cities. That’s right, there are only four cities in the U.S. where buying is more affordable than renting: Detroit, Philadelphia, Cleveland and Houston. So, if you want to buy a house one day, it’s more important than ever to stretch your monthly income and put money aside. Yes, budgeting is key. But you can also leverage credit card rewards such as cashback if you use your cards responsibly.
Paying monthly bills with a credit card
For example, you can start to pay monthly bills with a credit card. There are countless benefits to doing so. First, it provides convenience and simplicity. Instead of juggling multiple payment methods and due dates, credit cards allow users to consolidate their bills into a single monthly payment. This streamlines the process and reduces the chances of missing payments.
Second, credit cards often offer rewards and cashback programs, allowing you to earn points, miles, or cashback on your spending. These rewards can add up over time and be redeemed for various benefits such as travel, merchandise, or statement credits, effectively providing a financial advantage.
Additionally, credit cards provide an extra layer of security. When bills are paid using a credit card, the user’s personal bank account information is not directly exposed to the biller. This minimizes the risk of potential identity theft or fraud.
Lastly, paying bills with a credit card can help build or improve credit history. Consistently paying bills on time demonstrates financial responsibility and can positively impact one’s credit score, which can lead to better borrowing opportunities and favorable interest rates in the future.
Paying rent with a credit card
While you’re at it, should you also pay rent with a credit card? Using a credit card to pay rent can have both advantages and disadvantages. It offers convenience, allowing you to consolidate your expenses and make a single monthly payment.
Additionally, you may earn substantial credit card rewards from your rent payment, since it’s probably a big chunk of your expenses.
However, it’s essential to consider the potential drawbacks. Some landlords may charge processing fees for credit card payments, offsetting any potential rewards. Plus, if you don’t pay off the credit card balance in full each month, you may accumulate high-interest debt, which can be costly in the long run.
Before deciding, assess your financial situation, consider any associated fees, and ensure you can responsibly manage credit card payments without accruing unnecessary debt.