How to Travel Hack with Your Rent and Taxes

To reach financial independence, you need to be unconventional. When everyone else owned a car, we took public transit. When everyone else ate out, we packed our lunches. When everyone else bought a house, we rented. When everyone else climbed the corporate ladder, we quit our jobs and retired at 31.

And now that we are parents but still choosing to rent, we are even more unconventional. If we were rare before, we’re now a family of unicorns with leprechauns dancing on our backs, swimming in a sea of 4-leaf clovers. I can count the number of families I know who rent on one hand.

We are firmly on Team Rent and don’t plan to switch anytime soon.

The cool thing about renting is that I can even take advantage of this status and put my monthly rent toward travel hacking!

Yup. That’s right. You thought all those rent dollars were going to waste since you can’t pay rent with a credit card? Well, now you can! And that means, you can earn points towards free flights! Even if you don’t want to travel, you can get free money by using the right cashback credit card (I’ll explain how in a minute).

If you’re on Team Own, don’t worry, you can get in on a piece of this action too!

Because now, you can even pay your property taxes with a credit card! No need to bitch and moan about property taxes going up, because now you can put it towards free money or flights!

How it works

You do this with a service called Chexy. It’s a Toronto-based startup that lets you pay rent with a credit card.  It’s super easy to use and I was able to get onboarded in 5 mins. I’ve already sent several rent payments to my landlord with no issues. You just need to make sure your landlord accepts Interac e-transfers, pre-authorized debit, or Bill Pay. There’s no acceptance or participation required from them.

Chexy will charge your credit card 3 days before your rent due date. Then the funds are added to your Chexy Wallet until it’s issued to your landlord on the due date, using the payment option you chose.

But wait, there’s MORE! Chexy got approval from the CRA and now you can even pay your taxes with a credit card! (note: this feature is currently only for Canadians, but Americans can still use the U.S equivalent of Chexy to get points for paying rent—more on that in a minute)

Now, as with everything there is a catch. This service isn’t free and Chexy charges a 1.75% fee for Canadian credit cards. But, if you play your cards right (pun intended), the  benefits easily offsets the fee. Here’s how:

Math That Shit Up

Want free money? Get a credit card with 4% cash back and you immediately make 2.25% on the spread.

This means, if your rent is $2000/month, you get $45 a month for free every month, giving you $540 of free money each year. The higher your rent, the more money you make. This is money you would’ve spent anyway, so it’s a no brainer to get some cash back on it.

Just take your yearly rent and multiple by 0.0225 to calculate your free money. Chexy has a cool calculator you can use with a list of high cash back credit cards (you’ll need to sign up for an account to access the calculator):

Since I love travel, I would rather put my credit card spending towards frequent flyer points, like Aeroplan. And since my rent is $1615/month or $19,380/year, the Chexy fee would cost me $339.15/year, but I would get 19,380 Aeroplan points. Obviously, you can get those points for free with welcome bonuses on credit cards, but once you exhaust those options, this is the next level of points earning because you can do this continuously.

This is enough to get me an economy class flight, but since I’m more about value than minimal spending, I’d rather put my points towards longer haul flights in business class. With the new added feature of being able to pay your taxes with Chexy, if I pay $30,000 from my passion income for example, I’d earn another 30,000 aeroplan points for $525. As of right now, searching on seats.aero, I can find a direct business class flight from Toronto to Zurich, Switzerland for 56,000 Aeroplan points:

This means, I can get an 8-hour business class flight for $525 + $339.15 = $864.15, which is a 90% discount, considering that this business class ticket costs $8600 in cash!  

Now, this is all assuming that I’m only earning 1 aeroplan point per dollar spent and that my credit card doesn’t have an annual fee. If your credit card has a fee or has better earn rate, you can use this formula to decide if Chexy is worth it:

Chexy Cost Per Point Formula

This gives you the cost per point for Chexy. You then compare this with how much it would cost to buy the points.

Here’s an example:

The Amex Aeroplan Reserve Card has an fee of $599/year and gives you 1.25 Aeroplan points for every dollar spent.

My cost per Aeroplan point using Chexy would be:

C= $599/(1615*12)*1.25+0.0175/1.25 = $0.0387. Since Aeroplan points cost $0.035 to buy from Air Canada, this makes no sense.

The TD Aeroplan card I have right now has first year annual fee waived and gives me 1 Aeroplan point for every dollar spent. That changes the equation to:

C = 0+0.0175/1 = $0.0175, which is lower than $0.035 to buy the points, so that makes sense.

Later on, when I do have to pay the annual fee of $139, I get:

C= $139/($1615*12*1) + $0.0175/1 = $0.0245, which is still lower than $0.035, so it still makes sense.

You can do the same with your taxes. Just replace the annual rent number with your annual tax bill. Alternatively, you can also use the Chexy calculator by changing the filter from “cashback” to “points”, but keep in mind they don’t factor in the annual fee and use a $0.021 for the Aeroplan points cost instead of $0.035 to buy from Air Canada.

Chexy also opens up the opportunity to get premium cards like Amex Express Platinum or TD Visa Infinite Privilege. You know, the ones with the massive 100K points welcome bonuses but you never considered because they have a high minimum spend of $10K for the first 3 months. Now, with the ability to put your taxes and rent toward that spend, you could be raking in the points! These cards also come with perks like free lounge access, check-in bags, priority check-in, travel insurance, etc, so you could make travel even more comfortable. Just beware of their hefty yearly fees, which may or may not be worth it depending on your priorities.

For Americans

Americans, your equivalent would be Bilt Rewards, which has no fees but is more restrictive than Chexy.

If you have Bilt credit card, you can use their rent payment platform if your landlord accepts ACH payments or Bilt’s check mailing service for your rent. Also, you must have at least 5 transactions per month.

If you don’t have a Bilt credit card and want to use another credit card, your landlord needs to be in the Bilt Alliance Network (partnered properties).

As far as I know, there is no support for paying taxes with a credit card.   

Other options with less restrictions are Plastiq and PlacePay but they have a 2.9% and 2.99% fee respectively, which is too high in my opinion for the math to be worth it.

If you know of any other American options, let me know in the comments below.

Referrals

Remember when I said above that you can reduce the 1.75% Chexy fee by referrals? Well by referring just 3 people, that drops the fee to 1.5%. Refer 5 people to get it down to 1%. Once you reach 10 referrals, it’s only 0.5%!

So if you can manage to refer just 5 new people each year, that 8 hour business class flight I mentioned above drops down to only $560. If you can refer 10 people? Only $280!

Speaking of which. Here’s my referral link (haha, didn’t see that coming did ya?). If you use it, we each get $15.

You can then get your own referral link and use it to pester your family and friends.

Caveats

Do not do this if you struggle with paying off your credit card in time. Interest rates for credit cards are insane so any balance you carry on the card negates the benefits.

For everyone else, it may make sense to increase your credit limit on your credit card, to avoid running into issues paying your rent or taxes when using this method to get points.

What do think? Have you tried Chexy or any other payment system like this before?

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