Explained: Struggling with house rent payment every month? How credit cards can help
Rental inflation was back in 2018 with Mumbai topping the charts with 18% followed by Chennai and Bangalore at 15% and 14%, respectively.
Lakhs of people in metro cities live on rent. A majority of them are salaried Millennial who prioritize time and safety before moving into a house on rent. They want to live in a locality which has proximity to their workplace, good public transportation and safe neighbourhood. Other important factors that feature in their list are schools, shopping places and healthcare facilities. In 2018, the effects of policies such as RERA, GST, etc that negatively impacted real estate were seen to have fizzled. Rental inflation was back with Mumbai topping the charts with 18% followed by Chennai and Bangalore at 15% and 14%, respectively. Gurugram experienced rent inflation of 11% and Pune 7%, detailed a report by Nobroker.com.
The report showed that a typical Indian pays 30-40% of their salary on rent every month. Given the rent inflation in the last few years, it's quite possible that some people might have struggled to pay rent on time. If you are one of them, then you can pay your rent using credit cards. You may worry that it may increase your financial burden than easing it. But that's not so.
"Rent is the highest basic expenditure for most Indians. Millennials these days struggle with a liquidity crunch. They are used to using credit cards for almost everything. Credit cards gained popularity primarily because they offer a breathing space; while the recipient gets their pay instantly, the credit card user has roughly 45 days to arrange for the payment. Payment of rent through traditional channels such as NEFT, cash and cheque necessitate availability of cash on the spot," said Akhil Gupta, co-founder and CTO of NoBroker.com.
Explaining the benefit, Gupta said that besides the 45-day breather, the second benefit is the element of reward points which a consumer can get out of using credit cards for paying rent. Different credit cards have different reward options. Credit cards now offer various rewards like money back, miles point, cash back and other reward points to a cardholder for making payments with their credit card. Therefore, if you pay your rent using credit card, at the end of year, you may have rewards benefits of up to or over Rs 5,000 depending upon the card type.
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Nobroker.com has said that it closes 15,000 transactions of rent and sale every month saving Rs 90 crore in monthly brokerage. The 'NoBroker Pay' feature of the company allows a tenant to pay rent using credit card. The tenant will have to enter the landlord's bank account details along with his own credit card details on the NoBroker Pay only once. The tenant can set a date for rent payment. Every month the rent gets credited to the landlord on the set date with the auto debit feature.