Paying Your Rent with a Credit Card

Posted On: June 27, 2005

American Express recently announced the results of an independent research study concerning consumers’ attitudes towards automatic rent payments on credit cards. The research shows that just as Americans have welcomed a cashless society, America’s renters are just as eager for a checkless society.

With the strength of its outstanding Membership Rewards program, American Express has worked with property managers to establish the newest category of apartment rental amenity - the choice to automatically pay monthly rent on an American Express Card and earn valuable rewards. A new survey conducted by SatisFacts Research, a leading multifamily research firm, found that the ability to earn miles or points by paying rent on a credit card has a significant effect on retaining current residents, future leasing behavior and resident satisfaction.

Elizabeth Langwith, vice president of Emerging Industries, stated:

“We’ve known for some time that our Cardmembers have absolutely embraced automatic rent payments in the properties where we have introduced it. This new research shows that choice in payment methods is increasingly going to be at the heart of a renter’s decision to sign and to renew.”

In the survey, 21% of respondents identified themselves as American Express Cardmembers. For this group, average rents were 11% higher and household incomes were 46% higher than the overall survey group. These factors are obviously very attractive to property managers and are significant considering that 27% of American Express Cardmembers stated that an automatic rent program would have a major impact on their decision to renew a lease compared with 17% for residents without the card. 40% of cardmembers in the survey said that if choosing between two apartments, they would be extremely or very likely to rent one that offered an automatic credit card payment program compared to 29% for residents without the card.

Chief Financial Officer of Westdale Properties, Den Carlson, said:

“Amenities are a key factor in a renter’s decision to live in a Westdale property. For American Express Cardmembers, the ability to automatically charge rent and earn rewards is incredibly appealing. We’re delighted to offer such a convenient option that insures on-time payment and customer satisfaction.”

Automatic credit card payments certainly have a positive effect on renters’ behavior. Although, the introduction of a monthly convenience or service fee significantly impacts adoption rates. Adoption rates of those extremely or very likely to use such a program dropped by nearly two-thirds when a convenience fee was added.

Elizabeth Langwith added:

“The uniqueness and value of this amenity is founded on cardmembers’ ability to earn rewards simply by paying their monthly rent. American Express has chosen to prohibit convenience fees because they are not compatible with the goal of maximizing resident loyalty, retention and acquisition through a convenient and more rewarding way to pay rent.”

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