When you use a credit card to pay rent through RentRedi, the payment processor (the company that handles the transaction) adds a fee to the amount you're paying. The fee consists of two parts:
A percentage of the total payment amount (3.1%)
A fixed amount (30 cents, represented as $0.30)
Despite these additional fees, your landlord receives the full amount of the rent. The extra fee only covers the cost of using a credit card for the transaction.
Calculation of Total Charge
The total amount you'll pay is your rent charge plus a convenience fee. This convenience fee is calculated based on the rent amount and the credit card fee structure. Here's how it works:
First, the fee is applied to the total payment amount, which is your rent plus any existing convenience fees.
The formula
(amount * cardPercentageFee[0.031] + cardFlatFee[0.3) / (1 - cardPercentageFee)is used to calculate the total charge, including the convenience fee.
The formula calculates the total amount you need to pay so that after deducting the credit card fees, the landlord still receives the full rent amount.
Example: If your rent is $1000, the formula calculates how much extra you need to pay to cover the credit card fees (32.30), ensuring your landlord gets the full $1000. This means the total charged to your card is $1032.30.
(1000 * 0.0.31 + .3) / (1 - 0.031)
31.3 / 0.969
$32.30