Paying rent by debit or credit card online

[Safire]

Out of the blue, we received notice that Landlord is requesting tenants to pay rent from Oct, 2021 by debit or credit card online.*

How risky is this? Any pros and cons? There's a charge to use these cards but mostly I'm worried about safety in case any employees or random assorted individuals get into my bank account and wipe it out (if I decided to pay by debit card).*

I do have a credit card and a debit card. My credit card has a $500 credit limit (hardly enough to pay rent where I live) and the debit card is on a "clearing account" that is used only to pay bills (including rent), so has minimum balance on the account once all monthly bills are paid off.

I'm going to have to increase my credit limit if I decide to pay via credit card.

The bank account is one we've had for decades so wouldn't want to close it if / when we eventually decide to move to prevent further access to the landlord's staff, but looks like we may have no options, come October.

Should I be worried? Advice, please? Thanks!

 

[REWahoo]

No, you should not be worried.

Up the limit on your CC and use it for payment. Very little risk using a CC vs using a debit card.

 

[razztazz]

As far as the actual bill paying part... I personally wouldn't have a problem with it. You already pay bills via these accounts and that information is part of the universe anyway.
If you want to keep living there I would pick one and not worry much about the safety. The credit card is usually considered the safest.

 

[MichaelB]

Is it even legal to impose a change in payment terms without a new lease agreement?

Unauthorized transactions are protected under the EFTA, Electronic Funds Transfer Act. If unauthorized transactions take place your liability is limited to $50 if you report in 2 days or $500, as long as you report it within 59 days. Still, if money is fraudulently withdrawn from your account, it’s up to the bank to replace it and they may delay.

This should be a fee free transaction. If the landlord is imposing a fee I would complain to the state Attorney General.

One option to limit risk is to open a separate bank account with a debit card and use it for rent, only keeping enough balance to cover the rent payment.

Up the limit on your CC and use it for payment. Very little risk using a CC vs using a debit card.

If there is no fee for using a credit card this is the best option. Credit cards have better consumer protection regulations and you also can get cash back.

 

[njhowie]

You shouldn't be worried, because no employees or landlord staff will see it or have access to it - it's likely handled by an outsourced company where it's all automated, where yours is not the only complex they handle. Large complexes do this all the time.

As someone else mentioned, the debit card/bank account is likely the lowest fee option - choose that one.

 

[PaunchyPirate]

It's definitely not fair of the landlord to expect you to pay the processing fee for their grand decision. However, I suppose they will just raise your rent at the next opportunity to cover it if you don't pay it now. Either way should be fine so it's a matter of picking the approach that works best for you.

 

[Safire]

Ohmigod... just spoke to the property manager. She claims that it's "only" 2% fee to use the credit card option and a $5 charge to use the debit card. The 2% "convenience fee" is in the dozens of dollars because our rent in sky high (VHCOL area). She further asserted that these fees are from the external "processing" company (as someone pointed out in the thread above) and suggested I pay by ACH from my bank a/c as that's "free". Sure! That means giving them access to my bank account.

I suppose the best thing would be to open a bank a/c for just this rent payment and then close the a/c once we move. What a PITA!

 

[REWahoo]

I suppose the best thing would be to open a bank a/c for just this rent payment and then close the a/c once we move. What a PITA!

Yes, that 2% fee is something to avoid. I see you're considering MichaelB's suggestion of a separate bank account and paying via ACH, which I agree is the best option, even though it is an inconvenience.

 

[Sarah S]

“ free” ACH or card with fee are my choices and were since I moved into my current apartment 3 years ago. I chose ACH and have had no issue. I can set a limit for the amount they can take which I have. Ymmv

 

[Safire]

Yes, that 2% fee is something to avoid. I see you're considering MichaelB's suggestion of a separate bank account and paying via ACH, which I agree is the best option, even though it is an inconvenience.

Yes. While $5 a month seems "reasonable" (her words, not mine), that's still $60 per annum AND we expose our a/c & debit card info to the staff. I strongly doubt that people are sitting around just waiting to steal from us, but I'm paranoid as I've been a victim once before to a bank a/c related scam.

I am shopping for bank checking a/cs that are offering bonuses to new customers, since that's a large amount of rent and we may as well get something in return for it.

 

[PaunchyPirate]

Ohmigod... just spoke to the property manager. She claims that it's "only" 2% fee to use the credit card option and a $5 charge to use the debit card. The 2% "convenience fee" is in the dozens of dollars because our rent in sky high (VHCOL area). She further asserted that these fees are from the external "processing" company (as someone pointed out in the thread above) and suggested I pay by ACH from my bank a/c as that's "free". Sure! That means giving them access to my bank account.

I suppose the best thing would be to open a bank a/c for just this rent payment and then close the a/c once we move. What a PITA!

With this added information, congrats.... you are now in line with the way most rentals seem to be going these days. They will do an ACH for free and charge a fee to use credit/debit cards. Personally, I don't see it ACH as a big deal if I know the company is reputable. I currently permit my gas utility and my water utility to directly pull money via ACH. My mother permits her landlord property management company. The world is going digital. As you said, if it bothers you enough, get a new checking account and only keep enough money in it to pay the bills each month. Extra work for you, but it might protect you some.

 

[njhowie]

She further asserted that these fees are from the external "processing" company (as someone pointed out in the thread above) and suggested I pay by ACH from my bank a/c as that's "free". Sure! That means giving them access to my bank account.

I hate to be the bearer of bad news - but you are getting worked up over nothing - this is all standard these days. Do you autopay any of your monthly bills? Electric? Landline? Credit card? Giving access to your checking account is common these days for the convenience and speed of payment in not having to write a check and mail. As pointed out by others, you are protected against fraudulent activity. Some do offer billing to credit card for free, but for many, it is typical to pass along fees charged by their processor. Again, the "them" you are giving access to your bank account is not the landlord employees/staff - it is a third party who is in business solely to handle the billing for your landlord. There are no humans in the loop who are looking at your credit card or bank account info.

Most folks have autopay from their checking account these days for some monthly payment.

 

[aaronc879]

Out of the blue, we received notice that Landlord is requesting tenants to pay rent from Oct, 2021 by debit or credit card online.*

How risky is this? Any pros and cons? There's a charge to use these cards but mostly I'm worried about safety in case any employees or random assorted individuals get into my bank account and wipe it out (if I decided to pay by debit card).*

I do have a credit card and a debit card. My credit card has a $500 credit limit (hardly enough to pay rent where I live) and the debit card is on a "clearing account" that is used only to pay bills (including rent), so has minimum balance on the account once all monthly bills are paid off.

I'm going to have to increase my credit limit if I decide to pay via credit card.

The bank account is one we've had for decades so wouldn't want to close it if / when we eventually decide to move to prevent further access to the landlord's staff, but looks like we may have no options, come October.

Should I be worried? Advice, please? Thanks!

Ask if you can pay Octobers rent by check if it's sent early. Like if it's sent next week.

 

[njhowie]

...AND we expose our a/c & debit card info to the staff.

You are not exposing anything to anyone. You enter the information to the processing company website, and nobody ever sees it - the system automatically does the billing from your bank or credit card.

I would contend that by you writing a check and mailing or handing it to the landlord/staff there is greater potential for fraud - your account and routing info is right on the check itself.

 

[cathy63]

Ohmigod... just spoke to the property manager. She claims that it's "only" 2% fee to use the credit card option and a $5 charge to use the debit card. The 2% "convenience fee" is in the dozens of dollars because our rent in sky high (VHCOL area). She further asserted that these fees are from the external "processing" company (as someone pointed out in the thread above) and suggested I pay by ACH from my bank a/c as that's "free". Sure! That means giving them access to my bank account.

I suppose the best thing would be to open a bank a/c for just this rent payment and then close the a/c once we move. What a PITA!

Have you been paying by cash up to now? If not, and you've been writing a check, then you've already given them all the info needed to debit your checking account via ACH. In fact, they may already be processing your check as an ACH transaction.

Entering it yourself in an online system is safer than using a paper check since the human beings working in the rental office won't have access to your account info any longer. All they'll know is that a transfer from your account into theirs was processed.

 

[harllee]

Can you get a credit card that has a cash back option to offset the cost/hassle of paying your rent with the credit card? We have a cash back credit card and we try to pay everything we can with that card to get cash back.

 

[badatmath]

Most folks have autopay from their checking account these days for some monthly payment.

I don't use any auto pay. Nor do I plan to start. I don't think the utility companies are allowed to require it here. Fair number of regulations for them and they even take cash.

 

[njhowie]

I don't use any auto pay. Nor do I plan to start. I don't think the utility companies are allowed to require it here. Fair number of regulations for them and they even take cash.

Note I said "most folks".

Most companies do not require it. However, most folks and companies acknowledge the benefits of convenience, speed, and even security.

 

[jazz4cash]

I use the Bank of America billpay feature. They send most payments electronically they send checks via US Mail to smaller recipients including my credit union which is not so small. It is completely free. Any payment by check includes the routing and account numbers as mentioned earlier.

I would use a cashback credit card like Fidelity Visa which’s pays 2% to offset the fee.

 

[OldShooter]

If you are being told that you have to begin paying a 2% fee, that is a 2% increase in your rent amount. If you are on a month-to-month lease, which is our state law default for no written lease, then they have to give you a month notice before changing your rent. If there is a written lease, it governs whether your rent can be increased and what the notice period is.

Landlord is probably not interested in ACH because it's more bookkeeping. Your bank may charge you for the ACH if you are the originator. If LL debits your account via ACH, the bank will almost certainly charge him a fee. So no safe harbor there IMO.

The only good news if you have to pay the fee is you can probably get it back in credit card points, assuming the points can be used for something you would buy anyway.

 

[Kerfuffle]

I personally will not use my checking account for anything that I can use a credit card for (love that cash back), UNLESS there's a fee attached. Seems very wrong to me that they're changing the terms of your agreement and requiring you to pay a fee now, and also wrong that they don't have a free ACH option. They'd have a fight on their hands if they did that to me. FWIW, it is possible for them to pay that fee on you behalf. Our complex did that during the height of the virus as a perk, they covered the fee, and I immediately switched my payment method to credit card and raked in the cash back rewards, heh. So it's not like it's impossible for them to set the fee to zero, and given the sudden weird request, I think they should.

 

[njhowie]

Seems very wrong to me that they're changing the terms of your agreement and requiring you to pay a fee now, and also wrong that they don't have a free ACH option.

It was mentioned that there is free ACH - see post #7

...and suggested I pay by ACH from my bank a/c as that's "free".

 

[Walt34]

I'll be contrarian here and suggest the OP keep paying the rent the same way they have been. I bet it won't be turned down....

 

[harllee]

If the OP likes the place she is renting and wants to continue being a tenant there I suggest she go along with the requested payment change. If she comes a "trouble maker" --when her lease is up she may be asked to leave.

 

[OldShooter]

It's a business relationship. Rules apply. Where vacancy rates are low, landlords can push through rent increases as the rules permit. Assuming the rules have been followed, the OP can stay or leave, again according to the rules.