We pull out our credit cards to pay for groceries, restaurants, and the little one’s clothes. But rent? That’s possible thanks to a young Canadian company called Chexy, which is dangling the promise of rewards earned through your card and a potentially boosted credit score. The platform makes people happy, but the risk of over-indebtedness raises questions.
Every month, Simon Dupré pays $960 for his Longueuil apartment. But since he started using Chexy last October, each monthly payment earns him nearly $22 in credit card rewards. “It’s like my rent is costing me less every month,” says the 38-year-old software developer.
It is mainly with this argument – rewards – that Chexy, a Toronto company founded in 2022, has been trying to attract new users since it began offering its services in Quebec about a year ago.
How it works is simple: you create your account and provide your credit card number, the amount of your rent and the desired payment date. Chexy charges that amount to your card and then sends the money to your landlord on the specified date as an Interac e-Transfer.
To use the platform, all you need is for your landlord to agree to receive your rent payment by Interac transfer. However, it is best to advise them that they will see the name “Chexy” appear in the email sending the transfer. And if you are wondering: the Chexy website is only in English, but the registration process and the display of your account can be in French.
Do your math
Charging your credit card is considered a “recurring payment,” a categorization for which some credit cards offer rewards of up to 4%. Since Chexy charges a 1.75% fee on every transaction made with any Canadian credit card (except prepaid cards), you only win if your credit card earns you rewards above that percentage.
PHOTO DOMINICK GRAVEL, THE PRESS
Simon Dupré pays his rent on credit and earns rewards every month on the card.
For example, Simon Dupré earns 2.25% (or $22) in rewards on every rent payment, which is the difference between his credit card rewards (4%) and Chexy’s fee (1.75%). Other users also report that paying their rent with Chexy has helped them reach a minimum monthly spending amount required to unlock credit card rewards.
Useful…for some
“It’s a platform that can be advantageous for a small proportion of tenants,” says Alyssia Marchetta, budget advisor at Option consommateurs.
If a consumer doesn’t pay off their credit card balance in full, will the rewards offset the credit card interest? The answer is probably no.
Alyssia Marchetta, budget advisor at Option consommateurs
Yet nearly one in three Canadians say they still carry a balance on their credit cards at the end of their billing cycle, according to the latest report from Payments Canada.
Mme Marchetta also points out that credit cards offering attractive rewards often require a minimum income (such as $60,000 for an individual or $100,000 for a household) and have annual fees that are usually over $100, but can be avoided for a time, depending on current promotions.
“You have to be on top of things. If you pay your credit card late and the interest is added, it’s not worth it,” confirms Marie-Neige Saucier, a user who only receives $33 per year thanks to Chexy. “It’s better than nothing!” she says with a laugh.
“If you’re struggling to pay your rent, you probably shouldn’t be using Chexy. No amount of rewards are going to make up for the interest on a credit card,” Chexy CEO Lizaveta Akhvledziani bluntly acknowledges. “That said, if you use your credit card the right way, it can be lucrative.”
A boost for the rating?
Chexy also offers the option to sign up for a free tool called “Credit Builder,” which reports rent payments to Equifax, one of Canada’s two major credit bureaus. This tool displays a specific line of credit for rent on your credit report, in addition to the one associated with your credit card payment.
The Toronto-based company claims that by paying your rent on time each month and using this tool, you could improve your payment and credit history, two factors that together account for nearly half of your credit score calculation.
Equifax confirms that using the Credit Builder tool diversifies the credit information it receives, but stresses that “no action guarantees an increase in your credit score.” In short: there’s no guarantee that your credit score will improve because of Chexy.
In fact, Éric Métivier, Licensed Insolvency Trustee at Roy Métivier, Roberge, is most concerned that tenants who use Chexy will exceed the recommended utilization ratio of their credit card (about 30%), and thus harm their credit rating. “I find that the platform represents an additional incentive to use credit,” he says.
Almost seamless experience
Marie-Neige Saucier and Simon Dupré both had concerns when they opened their Chexy account and trusted a young company. However, they haven’t reported any major problems since and say they’re impressed with the service they’ve received when they’ve had technical glitches, such as connection issues.
As for the security measures implemented by the company, they are overall in line with industry best practices, says Sébastien Gambs, professor in the computer science department at the Université du Québec à Montréal (UQAM), specializing in cybersecurity.
However, he believes that Chexy does not provide enough information regarding the management and use of personal information. Chexy CEO Lizaveta Akhvledziani responds that user data is never sold to third parties and can be deleted upon request.
As the months went by, Simon Dupré’s apprehensions disappeared, but those of the tenant friends he spoke to about Chexy remained. “They’re still a little cautious,” he says. Except that, while they hesitated, he was already thinking about the trip he would treat himself to next winter… thanks to the points accumulated on his credit card.