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Million Mile Secrets reader, Jose:
Is a 2.2% fee worth paying my rent with my Chase Freedom Unlimited credit card? I have been debating if the $22 fee is worth the 1,550 Chase Ultimate Rewards points.
Great question, Jose!
Paying your rent with a credit card through online services like RadPad can be a good option if you need to meet credit card minimum spending requirements.
But you’ll pay a ~2% to ~3.5% fee, depending on the service you use.
It could be worth it for Jose to pay his rent with the Chase Freedom Unlimited card. But it depends on how he uses his Chase Ultimate Rewards points!
Paying Rent With a Credit Card to Earn Chase Ultimate Rewards Points
Link: Chase Freedom Unlimited
It sounds like Jose’s monthly rent is ~$1,033, and his payment service adds a 2.2% fee. So he’d earn ~1,550 Chase Ultimate Rewards points (~$1,033 X 1.5 points per $1) but pay a fee of ~$22 (~$1,033 X 2.2% fee).
Let’s look at when it might be worth it. And when it’s definitely NOT!
Redeem for Cash Back
This is NOT a good deal if Jose redeems his Chase Ultimate Rewards points for cash back because each point is worth 1 cent. So 1,550 Chase Ultimate Rewards points are only worth ~$16.
This would only make sense if Jose used a card that earns more than 2.2% cash back on rent payments (and I don’t know of any!). Or if he needed to meet the minimum spending requirement on the Chase Freedom Unlimited card.
Redeem for Paid Travel Through Chase Travel Portal
This method will NOT work out in Jose’s favor. If Jose also has the Chase Sapphire Preferred, Chase Ink Plus, or Chase Ink Bold (no longer available), he’ll have more ways to use his Chase Ultimate Rewards points.
That’s because when you have one of these cards, you can combine and transfer your Chase Ultimate Rewards points to airline and hotel partners for Big Travel. Or redeem them through the Chase Travel Portal at a rate of 1.25 cents per point.
Redeeming Chase Ultimate Rewards points for paid travel through thewill not make up for the fee. Because 1,550 Chase Ultimate Rewards points are worth ~$19 when you redeem them through the portal (1,550 points X 1.25 cents per point).
Transfer to Airline and Hotel Partners
The only way to possibly negate the cost of the monthly rent payment fee is by transferring your points to
I’ll show you a few examples where transferring Chase Ultimate Rewards points to airlines and hotels would more than recoup Jose’s $22 monthly rent fee.
If Jose transfers his Chase Ultimate Rewards points to United Airlines and uses them for award tickets that would otherwise be very expensive, it could be worth it.
For example, it costs 115,000 United Airlines miles for a round-trip, Business Class award ticket from Los Angeles to Paris in October. But if you paid cash for the ticket, it would cost ~$4,737!
In this case, Chase Ultimate Rewards points are worth ~4.1 cents each (~$4,737 price of ticket / 115,000 points for an award ticket). That’s worth paying a 2.2% fee!
At that rate, 1,550 Chase Ultimate Rewards points are worth ~$64.
While that’s just one example, it’s relatively common to receive a value of 3 to 6 cents per mile when you redeem for First and Business Class award seats. Or expensive coach tickets.
Transferring Chase Ultimate Rewards points to Hyatt for stays in pricey hotels can also be a good option.
For example, a night at the at the Park Hyatt Paris-Vendome in October costs ~$1,193! That’s certainly not in the budget for most.
However, you could transfer Chase Ultimate Rewards points to Hyatt and book the same room for 30,000 Hyatt points. In this case, your Chase Ultimate Rewards points are worth ~4 cents each.
So 1,550 Chase Ultimate Rewards points are worth ~$62 at that rate.
If Jose wants to book these kinds of awards, it could be worth it to pay rent with his Chase Freedom Unlimited card. But do the math first!
He’ll just break even if he gets a value of ~1.4 cents per point. Here’s how the math breaks down:
- ~$1,033 rent payment X 1.5 Chase Ultimate Rewards points per $1 = ~1,550 Chase Ultimate Rewards points
- ~$1,033 rent payment X 2.2% card payment fee = ~$22
- ~1,550 Chase Ultimate Rewards points X ~1.4 cents per point = ~$22
To justify a 2.2% fee when you use your Chase Freedom Unlimited to pay rent, you’ll have to transfer and redeem your Chase Ultimate Rewards points with airline and hotel partners.
But to do so, you must also have a Chase Sapphire Preferred, Chase Ink Plus, or Chase Ink Bold (no longer available) card. And it’s only worth it, in this case, if you can redeem your points at a rate of more than ~1.4 cents each.
Thanks for the question, Jose!