A while ago, I was alerted to an alarming article about a Canadian company, RentMoola, who is making it possible to pay you rent with your credit card (you can read the full article here).
While I understand that this isn’t a bad thing for everyone, I think for the majority of the population this is a terrible idea.
The Purpose of Charging Rent to a Credit Card (Landlords)
The mindset is that it will reduce bounced cheques or late payments for the landlords. My argument of course being if the cheque bounced the obviously didn’t have the rent money anyway, credit card or not, and the landlords are now given a financial power to charge the money the individual didn’t have.
Rewards for the Tenants
I understand that people who have good credit card control may want the opportunity to rack up major rewards every month simply by paying rent but I still think this is a terrible idea. Can you imagine the slippery slope if you missed even one month and let the interest spiral out of control?
Until there is more public awareness to how credit works and how credit needs to be used with respect, nothing good can come of this, unless of course you work for an insolvency organization in which case you’re business is about to take off ten fold.
Money Management Skills and Paying Rent with a Credit Card
Maybe I should have more faith in the Canadian population and maybe this will help teach them the money management skills they require. I mean charging a few bucks on the credit card (albeit multiple times) and ignore the growing bill is one thing (not an excuse, I can understand how it happens though), could people really charge $600-$2000+/month on their bills and ignore it?
What happened to focusing in having full control over your money rather than making it seem like charging it on your credit card is a great idea for everything? Managing your money is time-consuming, I spend hours per month making sure everything is right but it’s because it needs to be done. Part of the responsibility of earning money is managing it with the respect that it deserves. Money management can be exhausting and requires real effort. It can be daunting if you’re not currently doing it (with any real system) but every household that has income requires it.
It annoys me when companies like this make everything seem so unrealistically easy. Just charge it and it’s done! Planning your budget and writing cheques, or at the very least making sure the money is in your bank account for automatic withdraw for your rent, is part of managing money!
Canadians have always held pride in the notion that we do what is best for the entire population not the individuals that make up its sum. I love that I live in a population vs. individualistic mindset and this idea seems to be getting away from it. With the average household debt levels climbing, and the amount of people who rent monthly, this will create an entire new set of problems for our economy.
Having said all this, I’m sort of eager to see how this plays out and if it catches on. Would you charge rent to your credit card? Why/why not?
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