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PT school costs in the U.S. can range between $9,000 and $35,000 per year, depending on whether you live in the same state as the program you attend.

And when it comes to how to pay for PT school, there are several funding options for prospective students — from grants and scholarships to federal financial aid, work study programs, private student loans, and more.

Keep reading to find out how much PT school costs and how to pay for physical therapy school.

Cost of Physical Therapy School

The cost of physical therapy school can vary vastly depending on the program you attend and your location.

With that said, the average tuition and fees for PT programs in the U.S are $9,832 for in-state residents and $35,258 for out-of-state students for the academic year 2023-2024.

7 Ways to Pay for Physical Therapy School

Now that you have an idea of how much PT school might cost, your next priority is likely figuring out how to pay for PT school once you’ve been accepted.

Below are seven different options you can look into to help cover the costs of attending PT school.

1. Grants

Physical therapists are in high demand, and there’s been a corresponding increase in the number of grants available to students who are pursuing a career in PT.

Grant funding that helps students with PT school costs is sponsored by a variety of sources, from the federal government to public and private colleges and universities, professional organizations, and corporations.

It’s wise to kick off your search for grant funding with federally-backed programs that target PT majors. If you’re enrolled in a PT program from an accredited college or university, you may be eligible for the following federal grants.

Recommended: Grants for College

The Federal Pell Grant

The Federal Pell Grant is available to undergraduate students with demonstrated financial need. The amount of awarded funding maxes out at $7,395 for the 2023-24 school year. The amount awarded can change yearly and is based on the student’s level of financial need, attendance status (full time or part time), and the cost of the program itself.

The Federal Supplemental Educational Opportunity Grant

The Federal Supplemental Educational Opportunity Grant (FSEOG) is available to eligible undergraduate students who have already qualified for a Pell Grant, still demonstrate financial need, and are enrolled in a participating college or university.

To apply for an FSEOG, you can work with your college’s financial aid office and learn if you’re eligible to receive anywhere from $100 – $4,000.

U.S. Department of Health and Human Services Aid

The U.S Department of Health and Human Services offers a variety of financial aid opportunities that are designed to assist students entering into the healthcare profession. One example is the HRSA Scholarship for Disadvantaged Students, which is a campus-based grant program that provides financial assistance to students from disadvantaged backgrounds. Eligible recipients must be pursuing a degree in an approved healthcare field (PT being one of them) and the college or university the student is attending determines the eligibility and award amount.

Colleges and Universities

There are several campus-based grants and payment programs available to PT students to help cover PT school costs. Once you’ve whittled down a list of preferred PT programs, you can search for these grants and scholarships on the schools’ websites or speak to someone in their financial aid departments to get started.

Private Organizations

Private and professional organizations can be solid sources for grants, scholarships, and fellowships that help aspiring physical therapists with how to pay for PT school.

In many cases, the funding is extended on a regional basis, so searching for state or local organizations is a great way to seek financial aid that’s relevant to PT in your particular area.

The American Physical Therapy Association (APTA) sponsors several grants and scholarships for PT students, including the Outstanding PT Student and PTA Student Awards or Orthopedic Section Outstanding PT/PTA Student Award, among others.

An example includes the Foundation for Physical Therapy (FTP), which administers research grants for graduate level PT students in a variety of rehabilitation techniques, including pediatric and geriatric physical therapy. In addition, the FTP offers $5,000 in award funds from their Florence P. Kendall Doctoral Scholarship for high performing PTs and PT assistants pursuing doctoral studies at an accredited college or university.

2. Scholarships

When considering how to pay for physical therapy school with a scholarship, consider searching scholarship databases for “physical therapy” scholarships. Websites such as CollegeScholarships, Scholarships 360 or Scholarships.com all offer comprehensive lists of scholarships available specifically to students studying physical therapy.

In addition to course of study, factor in other talents or qualities that may help you qualify for a scholarship, such as where you grew up, your ethnicity, or gender.

Review the scholarships available at your specific school, as well.

Recommended: Find Financial Aid Options for All 50 States

3. Federal Student Loans

To help physical therapy students offset their PT school costs, federal student loans are another prime way to secure financial aid.

Federal financial aid for physical therapy students can come in the form of various federal student loans. They cover the cost of attendance, living expenses, fees, and more to help you pay for your physical therapy education.

On top of that, federal student loans offer specific perks and protections such as:

•   Deferment

•   Forbearance

•   Student Loan Forgiveness options

•   A six-month grace period for new grads

Most federal student loans (aside from PLUS loans), don’t require a credit check, so borrowers won’t need to add a cosigner to the loan. Undergraduate students may also qualify for Direct Subsidized Loans, which are awarded based on financial need. Students are not responsible for paying the interest that accrues on subsidized loans while they are actively enrolled or during qualifying periods of deferment, such as the grace period.

4. Private Student Loans

Private student loans can be obtained from private lenders like banks, credit unions, or other financial institutions and can help bridge the gap when federal student loans aren’t enough to pay for physical therapy school. That said, it may be tricky for physical therapy students to qualify for private student loans without a cosigner, especially if they have a lower credit score or no credit at all.

In some cases, aspiring PT students may need to ask someone to cosign for a private student loan to help them obtain a lower interest rate and more favorable loan terms.

While private student loan borrowers aren’t afforded the same perks and protections as they are with federal student loans, there are still benefits to using private student loans to pay for PT school.

Here’s a guide to private student loans that can help you learn more about the available options.

5. Part-Time Work

Whether it’s a side hustle or a sanctioned work-study program, there are other ways to pay for PT school that don’t involve a loan, grant or scholarship.

On Campus

An on-campus work-study program is typically offered by the college or university where a student is attending PT school.

In the case of the Federal Work-Study Program , students are eligible for part-time employment while enrolled in PT school if their college is a participating member of the program and the student meets the program’s eligibility requirements. Checking with the school’s financial aid office is the best way to determine whether or not they offer a Federal Work-Study Program.

Off Campus

The Federal Work-Study Program also offers off-campus employment for a private nonprofit organization or a public agency, typically for work that’s performed in the public interest.

That said, finding your own job on or off campus (that’s not tied to federal aid) is also a possibility. Whether it’s a part-time job at a local cafe, waiting tables at a restaurant, or becoming a nanny for a nearby family — there are other options for figuring out how to pay for physical therapy school.

6. FAFSA

If you’re thinking about using federal student aid to pay for PT school, the first step is filling out the Free Application for Federal Student Aid (FAFSA®).

The FAFSA is a free form that’s completed by current and prospective PT students to determine their eligibility for federal financial aid, including loans, scholarships, and the programs mentioned above.

Take a look at this FAFSA guide for more information about what the FAFSA is, which types of financial aid you may be eligible for, the criteria that can be expected in order to receive funds, and important dates to know.

7. PSLF

Public Student Loan Forgiveness (PSLF) is a federally-backed program that forgives the remaining balance on a borrower’s Direct Loans after:

• They’ve made 120 qualifying monthly payments
• Under a qualifying repayment plan
• While working full-time for a qualifying employer

The requirements for receiving PSLF are strict, so if you are pursuing this option be sure to read all the program instructions and paperwork closely.

When deciding how to pay for PT school, this is one reason many prospective students turn first to federal financial aid.

It’s Student Loan Forgiveness programs like these that are among the many perks and protections of federal student loans that can’t be accessed through private student loans.

How Much Can Physical Therapists Make?

While PT school costs can seem a bit steep, the compensation for recent PT grads can potentially justify the price tag for today’s typical physical therapy program.

In 2023, physical therapists made a median salary of $99,710, with the top 10% bringing in more than $130,000 and the lowest 10% earning $72,260.

The Takeaway

When it comes to how to pay for physical therapy school, there are several ways aspiring students can receive financial aid — including grants, scholarships, work study programs, federal student loans through FAFSA and private student loans.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

FAQ

What is the average student debt for a physical therapist after graduating?

Physical therapists graduate with an average total student debt amount of just over $142,000, with roughly 80% of that being specifically from physical therapy school.

How much can PTs expect to make after graduating?

An entry-level physical therapist salary can range from $58,000 to $94,000 or higher per year and the median salary among all physical therapists was $99,710 in 2023.

Will the military pay for physical therapy school?

Each branch of the U.S. Armed Forces has different programs and requirements for receiving financial assistance for physical therapy school. Visiting their individual websites is the best way to determine eligibility.

Photo credit: iStock/marinesea

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 04/24/2024 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org).

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SOISL-Q324-047

If you’ve been looking for a rental of any kind, you know how tough the hunt can be. Dozens of applicants for each vacancy, stricter credit, income, and referral requirements from landlords, bidding wars. These are, unfortunately, all part of navigating today’s tough rental market.

The culprit is a national housing shortage that has been brewing for more than a decade. After the housing crash of 2008, new construction of homes and rental units slowed dramatically. An uptick in building was later offset by supply chain and other pandemic-related delays. Meanwhile, rising mortgage rates made owning a home less affordable, prompting lots of would-be buyers to stay put in the rental market. The result? During the height of the rental crunch in early 2022, apartment occupancy hit an all-time high of 97.6% and rents jumped an average of 15.2% throughout the country.

Although the rental market has cooled somewhat since then, rents remain high and lower-cost rental units are in especially high demand. About half of people who rent are considered cost-burdened, meaning they spend more on rent than the recommended 30% of income.

If you’re competing in a tight rental market — or just competing for an affordable rental to call home — these four steps can help you anticipate what landlords are looking for and help you present yourself as the ideal tenant.

Tips to Get Approved for a Lease

Step 1: Know Your Number

Determine just how much you can afford for housing costs.

The advertised or asking rent is just the beginning. You’ll also need to take any fees, utilities, maintenance, parking, and renters insurance into account. If it’s been a while since you signed a new lease, you may need to adjust your estimates for these costs upward. Moving to a new area? Whether you’re renting or in the market for a house (and a home loan), check out a cost of living by state breakdown to get a feel for the numbers.

Take into account the possibility that you might find yourself in a bidding war. In the heat of the moment, you may outbid the others but also end up with an apartment you can’t comfortably afford. To avoid this scenario, determine your ideal monthly payment and stick to that number, no matter how tired you are of the apartment hunt.

Step 2: Prepare Your Rental Resume

Apply for a rental the same way you approach applying for a job. You want to make sure you fulfill all of the requirements, and then some.

The first step to getting approved for an apartment is usually filling out an application online. Be sure to do so accurately and thoroughly. When the time comes to see the place, you’ll help make your case if you bring the following:

Copies of Your Credit Reports

Landlords routinely do background and credit checks on applicants they are considering. Offering a copy of a credit report gives them on-the-spot information. If something on your report is confusing, you can attach your own letter of explanation.

Most landlords will look for a good FICO® score (670 to 739) or higher. Find your credit score on a loan or credit card statement or through an online credit score checker. Or get it for free from Experian.

Proof of Employment and Income

Landlords want to know that you can comfortably afford the rent. To prove you can, you could bring copies of your past three to six months of pay stubs, a copy of your most recent tax return, and contact information for your current employer. (This may be more than the landlord is asking for, but it helps build your case.)

Some, but not all, landlords also require employment history information. Having a list of former employers and their contact information on hand can help speed up this process. Even if it’s not required, the list helps paint a more complete picture of why you’re a trustworthy candidate.

References

Be ready to present credit references, which may include character references and asset documentation. Personal references from your boss, a co-worker, or another nonfamily adult who can vouch for you are a good idea. The landlord or agent may not call these people, but having them on your list is a sign of your professionalism and trustworthiness.

Landlords probably also will want the names, locations, and contact information of any previous landlords. A stellar rental history can help put you ahead of the crowd, so you want to make it easy for the agent or landlord to check on you.

If you’ve had trouble making rental payments, it’s best to be honest and offer an explanation.

Documentation for Service or Assistance Animals

According to the Fair Housing Act, a person with a disability may seek a “reasonable accommodation” from a housing provider so that they may have an equal opportunity as a nondisabled person to use a dwelling, even one that otherwise does not allow animals. The disability can be physical or mental.

Service animals, defined as dogs, are not considered pets, and housing providers cannot charge fees or deposits for them.

So-called emotional support animals have ruffled feathers throughout the country. First, applicants with assistance animals must make a request for reasonable accommodation, and not necessarily in writing. If the disability is not observable, they must provide reliable information — typically a letter from a medical provider or therapist — to the housing provider showing that the animal provides assistance.

Beyond that, the U.S. Department of Housing and Urban Development (HUD) does not allow housing providers to seek personal details of a person’s medical history. Importantly, HUD says that online certificates alone are not sufficient to reliably establish that a person has a nonobservable disability or disability-related need for an assistance animal.

So if you have assistance animals, it’s a good idea to bone up on the laws, which can be complicated, and have professional documentation.

Step 3: Show an Interest

It may sound trite, but landlords and rental agents are reassured when they know that someone really wants to live in the property. At a time when demand is high, this can be even more important as landlords become inundated with calls or online requests.

If you’ve visited the property before, have a friend in the same complex or nearby, love the neighborhood, or even appreciate the architecture or amenities, be sure to say so. Landlords want to know you’ll enjoy living there and, in turn, take good care of your new home.

Step 4: Prepare to Pay

Many leases have been lost when an early and promising applicant is ready to rent but doesn’t have the funds available.

Make sure you bring your checkbook or an electronic payment option so you can pay your security deposit, first month’s rent, and whatever else is required immediately. And, of course, make sure you have the funds available, while still leaving room in your budget to also cover moving expenses.

Move-in money can obviously be a challenge to come up with. If it’s several thousand dollars, a personal loan could help.

Did you snag the apartment or house? Once you move in and exhale, undertake a few renter-friendly updates to help you make the space your own.

Recommended: How Home Ownership Can Help Build Generational Wealth

The Takeaway

It’s a challenging time to look for a rental. But preparing thoroughly before you start your hunt and taking steps to show landlords your qualifications and genuine interest can help you stand out in the crowd. In this rental squeeze, however, some house hunters may find that it makes more sense to build equity in their own home than to pay rent.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

FAQ

How do I impress a potential landlord?

Make sure you fill out the rental application fully. When you tour the apartment, bring along a copy of your credit report, proof of employment and income, and contact information for some character references. Then express genuine interest in the property — comment on the building or neighborhood, for example — to show you’ll be invested in caring for your rental home.

What kind of background check do most landlords do?

A background check from a potential landlord might include a review of your credit history, employment and income history, and even a criminal background check. Some landlords also check for a history of eviction. They may also contact a former landlord or ask you for a character reference from a friend or colleague.

How much money should I have saved before renting an apartment?

You’ll want to have at least three months’ worth of rent saved before you start apartment hunting — the equivalent of your first and last months’ rent plus a security deposit. What’s more important, though, is that you have carefully considered the full cost of renting — including paying for utilities, renter’s insurance, and perhaps expenses such as parking. A good rule of thumb is that your housing expenses should not exceed 30% of your take-home pay.

Photo credit: iStock/cnythzl

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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.


Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SOHL-Q324-030

A price protection credit card benefit offers a limited lowest price guarantee on your purchases. If an item you purchased is advertised at a lower price than you paid, then you might be eligible for a refund of the difference if you paid using a credit card with price protection.

Although the idea seems straightforward, price protection credit card clauses aren’t as simple due to differences between card programs. Here’s a closer look at what price protection is and how it works.

What Is Credit Card Price Protection?

Credit card price protection is a card benefit that some programs offer their cardholders. It guarantees that if an eligible item you purchased using your credit card is advertised at a lower price, the card issuer will refund you the price difference.

To receive the funds, you’ll have to file a claim asking to be refunded — it won’t automatically get deducted from your credit card balance. It’s also up to the cardholder to be on the lookout for price fluctuations.

Recommended: When Are Credit Card Payments Due?

How to Use Price Protection

Credit cards with price protection are most advantageous when used toward a purchase that commonly changes in price. For example, this could include electronics, clothing, and other items that often go on sale.

There are also a few things to keep in mind when it comes to how credit cards work with price protection. For starters, to use price protection, the lower-priced item must be the exact specifications of your original purchase. This includes the product manufacturer, model number, and year it was released.

You’ll also need to ensure that the reduced price was advertised within the program’s specified timeframe, which is usually anywhere from 30 to 90 days and occasionally longer. Plus, you’ll need to file a refund request within the allotted claim window.

Questions to Ask Issuers That Offer Credit Card Price Protection

If you’re specifically looking for a credit card with price protection, make sure you know all of the terms associated with this benefit. Contact the card issuer upfront to get clarity about the eligibility requirements for filing a price protection claim.

What Items Are Eligible for Price Protection?

The range of items that are eligible for price protection under your card’s benefit program can be quite broad. For example, home goods, furniture, clothing, footwear, kitchenware, bedroom linen sets, pet accessories, and more might qualify under your price protection credit card.

What Items Are Not Eligible for Price Protection?

Below are some examples of goods that might be excluded from price protection, depending on your benefits program:

•   Animals

•   Antiques

•   Bespoke or one-of-a-kind items

•   Cash-only purchases

•   Collector items

•   Food and beverages

•   Discontinued items

•   Jewelry

•   Limited edition items

•   Live plants

•   Original artwork

•   Perishable goods

•   Tickets

•   Services and related costs

•   Vehicles

•   Watches

Further, items purchased at liquidation sales, storewide sales, or online might not be eligible for price protection. Also note that price protection isn’t the route you take if you’re simply unsatisfied with the service or product you received. In that scenario, you’d request a credit card chargeback.

Recommended: What Is a Charge Card?

Guide to Filing for a Credit Card Refund

If the advertisement you’ve found shows a lower price than what you paid for your original purchase, and your situation fits your credit card price protection requirements, you can submit a claim for reimbursement. To do so, you’ll generally need to go through the following steps:

1.    Save the lower-priced advertisement. Retain the original physical ad that shows the product’s name, merchant or retailer, price, and date, if applicable.

2.    Find your original receipt. The purchase receipt for the item you bought should include the merchant’s name, date of purchase, item, and price. It should also show that you used the credit card with price protection. You might also be asked to supply a copy of your statement that has the original purchase on it.

3.    Submit a claim. Contact your card’s Benefits Administrator, or call the number at the back of your card to file a claim for a price protection refund. Make sure that your claim is submitted within the eligible claim period.

4.    Review your balance. Check your credit card balance or statement to confirm that the refunded amount is correctly reflected on your account.

How long a credit card refund takes depends on your card issuer and its processing timeline. Generally, it can take five to 14 business days to see a refund posted to your account’s balance.

How Long Do You Have to File for a Credit Card Refund?

The timeline you have to claim a credit card refund under price protection varies between credit card programs. Some cards allow you to file claims up to 90 days after your purchase date, while others may give you longer.

Additionally, some benefits programs require that the advertisement date is within a certain number of days of your original date of purchase. Make sure to confirm the ad date requirement under the credit card price protection benefit, as well as the deadline to file a formal claim.

Is There a Limit to Reimbursement Through Price Protection?

Another restriction you might encounter for cards with price protection is the minimum and maximum refund limit per item. For example, your card might impose a minimum refund threshold of $10 up to a maximum refund of $250 per item. It also might have an annual reimbursement limit, which caps the total refund amount you can receive in a year.

If you want to file a refund claim under your price protection benefits, check your credit card’s benefits guide to learn about its specific requirements.

Recommended: What Is the Average Credit Card Limit?

Tips for Saving Money Without Credit Card Price Protection

Using a credit card with price protection isn’t the only way to save money when prices are reduced. Here are some other possibilities for saving:

•   Look for same-retailer price adjustments: Some retailers offer a price adjustment if you recently purchased an item in their store, and the same item is marked down at the same store not too long afterward.

•   Find price matches. To outprice their competitors, a retailer might offer a price match or lowest price guarantee. If you find the exact item elsewhere at a lower price, it will offer to match the price or offer a credit card refund for the difference if you’ve already purchased the item at their store.

•   Catch items on sale. Track upcoming sales, like a retailer’s annual sale or holiday sale, that offers a large discount off of the retail price. If shopping online, using an online price-tracking tool can help you find the lowest price.

•   Keep an eye on your credit card statements. While not necessarily a guaranteed path to savings, regularly reviewing your credit card statement can help you catch any charges that aren’t right, whether due to fraud or getting charged incorrectly. In those instances, you could dispute a credit card charge to attempt to get your money back.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score?

The Takeaway

A price protection credit card offers peace of mind when purchasing goods that might fluctuate in price. It can allow you to claim a partial refund if there is a published price drop within a period of time after you make your purchase with your card and within the plan’s guidelines. Aside from applying to tangible goods, you may be able to take advantage of price guarantees for travel-related purchases like hotel rates, which can change daily.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

What is price protection on a credit card?

Price protection allows cardholders to claim a credit card refund on a price difference if a lower published price becomes available. Typically, price protection is available for a limited period after the original purchase was made.

Do all credit cards offer price protection?

No, not all credit cards offer price protection. Card benefits, like price protection, vary across card issuers and credit card programs. See your card agreement to learn more about your card’s benefits and terms.

How can I use price protection?

In order to take advantage of price protection, you’ll first have to make a purchase using a credit card with price protection. Then, within the permitted time period, find the same product marked at a lower price and following the stipulations of your plan. From there, you’d contact your card issuer to submit a claim for a refund in the amount of the difference between the two prices.

What is a price protection clause?

A price protection clause is the written parameters of your card’s price protection benefit. It states the issuer’s criteria for claiming the benefit, including the allowable time frame for a price protection request, eligible purchase categories, and more.

Photo credit: iStock/jroballo

SOCC-Q324-027

Investing in real estate can be a lucrative endeavor. But if you don’t have hundreds of thousands of dollars saved in cash to put toward a property, using a credit card to secure a real estate investment might be an option.

There are ways to execute this investment approach. However, there are also serious caveats to consider before moving forward with using a credit card to invest in real estate.

Can You Buy Real Estate With a Credit Card?

You can’t purchase a physical real estate property outright with a credit card the way you would when using a credit card to buy lunch or a new television. One reason for this is because a typical consumer credit card likely doesn’t offer a credit line large enough to cover the entire home price.

Even if you do qualify for a credit line to cover all or a significant portion of the home price, you’ll face another challenge. The title company or real estate agency that’s facilitating the deal requires that payment is provided using bank-certified funds — such as a cashier’s check, certified bank check, or wire transfer — to finalize your investment transaction. Given what a credit card is, it won’t meet those standards.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score?

How to Finance Real Estate Investments With a Credit Card

While you can’t swipe your credit card to purchase real estate, there are ways that you can leverage your credit card to help fund your real estate investments.

Through a Cash Advance

If you have a high enough credit limit, a viable way to buy real estate with a credit card is by getting a cash advance against your card. By doing this, the funds you borrow from your credit card will become quickly available for use on a real estate investment, which might be helpful if you’re buying real estate in a hot market.

Keep in mind that fees typically apply for cash advances. Typically, you’ll pay a fee in the range 3% to 5% of the transaction amount, depending on your particular card.

Also know that cash advances typically come with interest rates that are higher than the card’s standard annual percentage rate (APR). Plus, interest begins to accrue immediately rather than at the end of the grace period like it does on regular credit card purchases.

Recommended: What Is the Average Credit Card Limit?

For Related Real Estate Costs

Some investors also use credit cards to invest in real estate by using their card for renovation project expenses. If you purchased a low-cost investment property and want to update it for passive rental income, for example, you might be able to invest in your property by putting charges for contractors and materials on your credit card.

By Using Credit Card Rewards

Another unconventional approach to buying real estate with credit cards is directly redeeming earned rewards as cash. Cash redemption values are typically lower compared to redeeming rewards toward travel, for example, but this approach can still unearth the capital you need to invest in your next property.

This strategy is particularly effective if you’ve already amassed years of rewards through a business credit card, and are willing to pool earned rewards from your personal credit card rewards programs, too.

Recommended: Can You Buy Crypto With a Credit Card?

Advantages of Using a Credit Card to Invest in Real Estate

Although buying real estate with a credit card is an unconventional approach, there are some benefits in doing so. In particular, the advantages include that:

•   You can invest faster: If you don’t have a lump sum of cash savings ready, it might take years to save up enough capital to get your foot into real estate investing. Using a credit card to invest in real estate can help you realize your investment goals faster.

•   You’ll have fewer costs at closing: Since you’re not financing through a mortgage lender, there are fewer fees to worry about. Unlike when buying a home as your primary residence through a mortgage loan, costs like origination fees, appraisals, and escrow fees aren’t a required part of a real estate investment transaction done in cash.

•   You might earn rewards in the process: Most card issuers don’t let you earn credit card rewards from cash advances. However, you can accelerate your rewards earnings by using your card for spending associated with your property investment. For example, materials and contractor costs for renovation projects, like a kitchen update or a room addition, can help you rack up rewards faster.

Downsides of Using a Credit Card to Buy Real Estate

There are major disadvantages to using a credit card to invest in real estate. If you’re considering how to buy rental property with credit cards, keep in mind the following drawbacks:

•   You’ll have a hard time using credit cards directly to invest in real estate: A notable downside to buying real estate with credit cards is that you’ll likely be unable to throw a credit card onto the table to close a real estate transaction. You’ll have to undergo the extra step of getting a credit card cash advance. But be aware that card issuers might set a lower available limit for cash advances and will impose a higher APR. Plus, you’ll pay cash advance fees.

•   You’ll face high interest rates: If you have to draw a cash advance against your credit card to buy real estate, you’ll face expensive APRs, compared to other financing sources, like a personal loan. According to the latest Federal Reserve data, the average credit card rate across all accounts with balances is currently 22.76%. By comparison, the average personal loan rate is 12.36%.

•   You’re taking on a lot of risk: How credit cards work is that they let you purchase goods and services, even if you don’t have the cash to cover the full amount, immediately. The caveat, however, is that you’ll need to repay the amount either in a lump sum when your statement is due or over time.

   If you successfully buy real estate with a credit card, you’re legally liable for that debt and must repay it based on the rate and terms of your credit card agreement. This holds true regardless of whether your investment turns a profit. Plus, if you choose to pay back the funds you borrowed over many months, you’ll incur exorbitant interest charges in addition to the principal balance.

Recommended: How to Avoid Interest On a Credit Card

Factors to Consider Before Using Your Credit Card to Invest in Real Estate

After assessing the pros and cons of investing in real estate using a credit card, also consider the following factors that might impact your investment:

•   Whether you’ll need additional funding sources: If your credit card doesn’t provide a sufficient amount for your real estate investment, you’ll need to seek funds elsewhere.

•   What the local real estate market is like: Whether your goal is buying a property to flip and sell or buying rental real estate, do your homework. This includes finding a desirable neighborhood and a suitable property, as well as assessing renovation projects and other repairs necessary to set your investment up for profitability.

•   If you can repay your credit card bill: At best, consider your credit card as a short-term loan tool. Plan to put profits you’ve earned toward paying down your debt ASAP.

Alternatives to Buying Real Estate With Credit Cards

If you don’t have hard cash stowed away for your next real estate investment, but aren’t ready to leverage your credit cards for the investment, you have a couple of other options:

•   Personal loans: A personal loan is another financing option, particularly if you have strong credit. It offers a higher borrowing limit and longer repayment timeline compared to a credit card. Also, as mentioned earlier, personal loan interest rates are generally lower than credit card APRs.

•   Personal savings: Another option is using cash and avoiding credit cards and other methods of borrowing altogether. If you have personal savings that you can tap into or are willing to hold off on investing in real estate until you’ve built up enough savings, you can potentially avoid costly finance charges.

The Takeaway

Tread carefully when using a credit card (i.e. borrowed money) to fund any investment, including real estate. Adhering to important credit card rules — like staying on top of your credit utilization and paying your credit card statements in full — can help you avoid going into debt for your investment.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

How can I buy rental property with a credit card?

If done strategically, you can use a credit card to finance a rental property either through a credit card cash advance or by using the credit card to pay for renovations on an investment property flip.

Can I use a business credit card to buy real estate?

Yes, you may be able to use a business credit card to invest in real estate. Doing so separates the debt from your personal credit profile, so the high credit utilization on the business credit card doesn’t affect your personal credit score.

Is it a good idea to buy real estate with a credit card?

Whether buying real estate with credit cards is a good idea depends on your investment risk tolerance. A credit card might work as a short-term funding option, but plan on repaying the debt with your profits quickly to avoid an underwater investment.

Photo credit: iStock/SDI Productions

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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If you have strong credit, leveraging your credit cards as part of your wealth-building strategy might be possible. Whether you’re looking to use them toward shrewd investments or through tactically accumulating rewards, your credit card can be a powerful tool.

However, before you worry about how to leverage credit to make money, it’s crucial that you understand the high risk involved in leveraging your credit line as investment capital. If you don’t have cash flow ready to immediately repay large credit card purchases, you’re putting yourself in danger of getting buried in debt.

Strategies for Leveraging Credit Cards

Depending on your risk tolerance, how much cash you have on hand for repayment, and your financial goals, you have a few options for how to leverage credit cards. Here’s a look at some of the ways you could leverage your credit to help pave your path toward building financial freedom.

Upgrading Your Property

If you’re looking for new investment options, you could leverage credit cards toward your existing home. Using your card as a cash flow tool to fund renovations and upgrades can help you increase your property’s value.

According to Remodeling Magazine, homeowners who update their kitchen can typically expect a return on investment (ROI) of up to 71%. The approximate ROI on a bathroom remodel is almost 60% or higher. Your ROI will depend on many factors, such as the quality of materials and appliances used, but in general, updating your home can improve its value.

Utilizing 0% Credit Promotions

If you’re wondering how to use good credit to make money, another option is a 0% promotional offer. A 0% APR credit card promotion lets you leverage your credit line at no additional cost for a limited period of time. The temporary promotion is typically reserved for those with excellent credit and is available for a short time frame, such as from six months to 18 months.

You can use your card toward other wealth-building strategies and repay your purchases within the promotional period to avoid interest charges. The main caveat is ensuring that you can realistically afford to repay yourcredit cardcharges within the promotional period. If you don’t, some cards charge deferred interest on any remaining balance after the promotion expires.

Recommended: What Is a Charge Card?

Turning Your Credit Card Debt Into Good Debt

Credit cards can be used as a tool to build your credit profile. A higher credit score can earn you access to lower, more competitive interest rates and a higher borrowing limit when you need a loan in the future.

Practicing sound borrowing habits on a credit card, like maintaining an on-time payment history, keeping your credit utilization ratio low, and not opening too many new accounts in a short period are some factors that can positively impact your score. Keep in mind that the better your credit, the better the terms you may receive to then use toward investments.

Recommended: When Are Credit Card Payments Due?

Flipping Items for More Cash

Flipping, or retail arbitrage as it’s sometimes called, is one way people leverage credit cards to increase their wealth. As an example, say you purchased a vintage Windsor chair from a thrift store for $20 using your credit card. If you successfully sell it on Etsy or eBay for $250 before interest accrues on the purchase, you’ve effectively leveraged your credit to earn a $230 profit.

Before you leverage your credit card in this way, do your due diligence by researching high-value items that can be flipped in a short period of time. Having inventory that’s taking up space in the corner because it’s not a hot item, or too niche, might result in getting hit with interest charges before a profit is made.

Recommended: How to Avoid Interest on a Credit Card

Making Use of Available Discounts

Another way to leverage credit cards is by using a credit card to save money on planned purchases. Many rewards and travel credit cards offer discounted rates on vacation packages or trip costs like flights and accommodations.

Taking advantage of discounts that already come with your card is another way to save money. You can then reallocate this discretionary cash flow toward more lucrative investments.

Maximizing Big Welcome Bonuses

Some credit cards offer lucrative sign-up bonuses for consumers who open a new account. For example, a credit card might offer 60,000 bonus points (that’s valued at $750) to new cardholders who make a minimum of $4,000 in purchases within the first three months of opening the account.

Keep in mind that this option is likely best for cardholders who have a large purchase coming up, or already use a card for everyday expenses that will allow them to hit the minimum purchase requirement.

If you meet the requirements of the sign-up bonus offer, you can use your earned rewards toward a statement credit, travel, and more, effectively freeing up cash flow that otherwise would have come out of your pocket.

Racking Up Cash Rewards

You can also strategically leverage credit card rewards. If your card offers cash-back rewards, use that card to cover your day-to-day expenses rather than your debit card. That way, you can earn money back on each dollar you spend.

For example, you can use a cash-back rewards card for groceries, school supplies, gas, dining, entertainment, vacations, and more. Depending on your rewards program, you could accumulate a sizable amount of cash back that could end up covering a portion of your monthly statement balance or even a trip. Or, you could get your rewards as cash that you then put into the market, allowing you to effectively invest with credit card rewards.

Recommended: Does Applying for a Credit Card Hurt Your Credit Score?

Investing in Yourself

Using your credit card to enhance your skills or education can actually be a powerful way to leverage your credit. For example, learning additional coding language might make you a more competitive candidate for a higher paying job.

In this situation, using your credit card toward online courses could potentially boost your long-term wealth and career opportunities.

The Takeaway

Responsible credit card habits are key to leveraging credit cards to build your wealth. If you can confidently repay your credit card charges every month, your card could earn you rewards while leveraging your credit toward investment opportunities.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

What does it mean to leverage your credit card?

Leveraging your credit card to increase your wealth means using your card as a cash flow tool. It’s best when used by cardholders who practice responsible borrowing habits, such as paying off monthly balances in full to avoid finance charges.

How do you make money leveraging credit cards?

Different ways to leverage credit cards include using your card toward a home remodel that increases your home value, or capitalizing on credit card rewards on purchases you already make.

Is leveraging credit a good idea?

Leveraging your credit can be a good strategy if you maintain positive financial habits, like making on-time payments and paying off your full credit card balance each month. If you don’t have the cash to pay back your purchases, this strategy can quickly backfire through accumulated debt and interest charges.

What is credit card arbitrage?

Credit card arbitrage is a strategy that involves borrowing credit from your card, and then using those funds toward a higher-interest investment vehicle. This is commonly seen using promotional 0% APR credit cards. After you’ve earned dividends from your investment during the temporary no-interest period, you’d repay your credit card balance and keep the investment profit.

How do I turn my credit into cash?

One option to turn your credit into cash is to purchase gift cards using your credit card for the balance you need. Just make sure you can realistically repay your credit card statement at the end of the month.

Photo credit: iStock/Delmaine Donson

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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