Pay common charges with plastic and you'll rack up miles—for a fee

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Checks might appeal to the old-fashioned among us, and automatic bank debits are undeniably convenient, but if you really want your common charges or maintenances to work for you, you may want to pay the monthlies with plastic. More and more co-op and condo management companies are offering owners and shareholders to go the credit card route, according to a recent article in Habitat.

And you can thank the credit cards' loyalty programs for making them popular.

One Manhattanite, who owns her one-bedroom condo in a large building in the Union Square area, told us her $30 monthly credit card fee "stings a bit, but each month I weigh that versus the air miles."

Many co-ops and condos (and rentals too, in fact) have accounts with ClickPay, which allows owners and shareholders to pay those charges online and via credit card if they want. "Users tend to move things around," says Steve Van Praagh, president of ClickPay. Sometimes, they will pay their common charges via credit card but one-time assessments via debit from their bank account. "They appreciate the flexibility," he says. In fact, 38 of the top 40 managements companies in the city are their clients, Vanpraagh says, and they range from small to large buildings.

While charges for using credit cards vary, the industry average is about two-and-a-half to three-and-a-half percent, says Van Praagh. So, for example, if common charges are $1,000 a month, expect to pay about $30 a month on top of that. Payments can happen manually or be scheduled to happen automatically. 

The plus side for property managers and homeowners' associations, Vanpraagh says, is that owners don't have to deal with paperwork, and things get streamlined (no bounced checks!). For owners there's the convenience and, of course, the rewards which, depending on the credit card, can translate into significant air miles or cash back.

But it's still a vast minority of owners and shareholders (and renters) who choose to go the credit card route, says Michael Wolfe, president of Midboro Management. Residents in Midboro buildings have the option to pay by credit card right there on the company's website, but not many do. "I think you really need to do the math and make sure the extra charge—which I believe is about two-and-a-half percent—is worth it to you," he says, pointing out that the management company doesn't make extra money off the transaction, but the fee is used to pay the credit card company and processor. 

A better option he thinks is to set up a direct withdrawal from your bank account for a certain amount every month. "But, if you have a new credit card and you can avoid paying interest on it for a year or so, that might be a good option," he says. "It just really depends."