A New App Will Let You Pay Your Rent With A Credit Card (But It Will Cost You)

Apartment rental app RadPad rolled out a new pay service that offers the convenience of paying your rent on your debit or credit card even if your landlord isn’t signed up.

RadPad

When Jonathan Eppers, Tyler Galpin, and Tim Watson founded and launched RadPad in Los Angeles last January, they wanted to offer a truly mobile and convenient way for users to search and peruse through apartment listings.

Now, just a little under a year and $4 million in funding later, Eppers and his small team want RadPad to be more than just the app renters toss aside after finding an apartment — they want it to be the answer to all their rental needs.

To that end, RadPad rolled out a new pay service today. Users can now pay their rent using either their debit or credit cards, even if their landlords are not signed up to RadPad. Renters simply input their information and their landlord's address, and RadPad sends the check.

But, this all comes at a cost. Users paying their rent with a debit card will be charged a flat $4.95 fee. But users paying their rent with a credit card have to pay 3.25% of their monthly rent, a percentage Eppers said he negotiated down as much as he could.

"If we could somehow get a fee that was nothing, we would do that," Eppers told BuzzFeed News. "But there's really no way we can avoid it. We're at about the same at Venmo, which is the lowest in the industry right now."

But the convenience, Eppers said, can definitely be worth the cost.

"What we're seeing in the rental market, especially in L.A. [is that] almost half of renters are spending over 40% of their monthly disposable income on rent," he said. "People are spending much more of their income per month and it's creating financial anxiety toward the end of the month and potentially the cash flow isn't there. Ultimately we want to give people the financial safety net by [letting them] put it on their credit card and pay for it later."

Of course, the implications of moving a payment arrangement that has historically been tied to actual, in-the-bank money, to credit, are huge and not all good. It's easy to imagine a situation in which renters accrue enormous fees and rent apartments they can't afford, a kind of month-by-month echo of the American mortgage crisis.

Eppers contends that card rewards perks — like miles, points, or cash back on purchases — could lessen the blow of paying 3.25% of your monthly rent simply to pay for rent, but those hardly seem like savings commensurate with the potential trouble users could find themselves in.

Maybe more importantly, the in-app pay service can also serve as a sort of renters' credit score and can help renters apply for their next apartment. RadPad keeps a history of users' payments, so if and when a user looks for another apartment the landlords or brokers who have listed on RadPad can see whether they typically paid their rent on time.

"What's nice is we're building a renter profile on you," Eppers said. "You'll be able to use that as a profile which doubles as your application [on the app.] For the first time landlords will see a payment history that's just based on your rent."

Eppers — who worked at Myspace and then at eHarmony before co-founding and becoming the C.E.O. of RadPad — and the rest of the RadPad team are currently in talks with TransUnion and Esperian to create an opt-in service that allows renters to incorporate their payment history into their credit score. It's something both Esperian and TransUnion are already doing with RentTrack, another service that focuses strictly on online rental payments.

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