To earn as many bonuses and points on a credit card as possible, or to get the maximum cashback, – you should try to use your credit card to pay wherever it is possible. That way, you can earn a few hundred dollars a year as rewards, that can cover all interest you owe to the lender. To increase your ability to do this, you may be wondering whether you can make a mortgage payment with a credit card.
This is a legitimate question if you want to maximize the benefits of using your credit card to get a bonus for registering or just to get as many points as possible.
We want to please you – you can make a mortgage payment with a credit card, although it may not always be as easy as you would like. Next, we will look at how this can be done and the most appropriate options for this.
How to make a mortgage payment with a credit card
To make a mortgage payment with a credit card you often have to use one of the third-party payment services, because in most cases lenders do not allow using credit cards for such large payments.
There is a Plastiq payment service that allows you to pay a variety of bills using credit cards, including mortgages, your student loans or rentals. After making the payment, Plastiq sends a check to your lender. This service also accepts payments by debit card, but you do not receive rewards.
Plastiq also has limitations when you can only use Mastercard or Discover, but not American Express or Visa, to make a mortgage payment. In addition, you will have to pay a commission of 2.5% of the transaction amount. So, if the amount of your monthly mortgage payment is $ 1,000, then the fee will be $ 25, which will turn into $ 300 per year.
Among other things, you should take into account that the payment may take up to 8 working days, so it is worth making it in advance so that it happens on time, and you do not fall into delay with all the ensuing unpleasant consequences for you. Another factor to consider is a change in the terms of the transaction with the issuer of your credit card, which can increase the fees for making a mortgage.
At the same time, Plastiq sometimes conducts promotions when the percentage of fees is noticeably reduced, so subscribe to their newsletters to be aware of and not miss the favorable moment to use this service.
In addition to Plastiq, there are strategies such as “manufactured spend” for making a mortgage payment with a credit card, which involves using your credit card to purchase prepaid Visa, Mastercard, Amex or other cards that you can use to purchase remittances from through which you can then pay the mortgage. However, this is a risky and complicated strategy, which we do not recommend, because it can lead you to failure and to complete the closure of your accounts due to possible violations of the terms of the agreement with the issuer of your credit card.
The opportunity to make a mortgage payment with a credit card should be considered as an option only if you plan to fully repay the balance each month. High interest rates can reduce to zero all your efforts to earn points or cashback. If you are ready to fully repay the balance of your credit card every month, then you should consider the possibility to make a mortgage payment with a credit card.
3 reasons why it’s worth to make a mortgage payment with a credit card
There are three really good reasons to help you get additional benefits and not incur financial losses.
- Big bonus for credit card registration
Some credit card issuers offer huge registration bonuses, subject to spending a certain amount of money using a credit card. In some cases, the sign-up bonus can reach $ 5,000, which must be spent in the first 2 or 3 months. This is a fairly large amount for most Americans to spend on regular purchases, so in such a case, as not to miss such benefits, it’s better to get a registration bonus.
With your monthly spending of about $ 1,000 with a credit card, you will lose $ 2,000 if you don’t use the opportunity to make a mortgage. Despite the fact that you have to pay $ 50 of fees for making these payments, you will still be in the big plus if you pay a mortgage with such a credit card.
In general, you will receive a refund of 14% of your expenses, instead of 2.5% of the transaction fees spent. If it’s miles, they’ll be able to cover a trip worth $ 700, which you will agree is worth spending $ 50 on.
- You are close to achieving elite status
Some hotels and airlines offer bonus cards, which, subject to a certain level of spending per year, can give you elite status, which gives you many advantages when traveling. You may find it difficult to achieve high-end status with your everyday expenses, but you can do that if you make a mortgage payment with a credit card.
For example, JetBlue Plus card offers to get the status of Mosaic, spending with JetBlue Plus card help $ 50,000 a year. When you succeed, you will receive free baggage check-in, priority protection and boarding, cancellation of changes, and free in-flight alcoholic beverages.
Another similar example is the Citi® / AAdvantage® Platinum Select® Mastercard® card with expenditures using a $ 40000 card in the first year of use will allow you to get 10,000 EQM, that is, elite qualifying miles. It is worth using it to make a mortgage card, because to get elite status of the lowest AA level, you only need 25,000 EQM. When you receive them, you will have at your disposal free privileged locations, one free registered bag, free upgrades on flights of 500 miles or less, and a 40% bonus for elite mileage.
- Your credit card brings in more than 2.5% rewards
As mentioned above, the Plastiq service charges 2.5% of the fees if you make a mortgage payment with a credit card. Thus, it turns out that if the rewards for using your credit card exceed these fees by 2.5%, then you already win when making mortgage payments in this way.
As an example, we can take Discover it, which doubles your rewards at the end of the first year of use and increases rewards by a total of 3 times, and also offers 1.5 times more miles for everything. So you can use these miles for credits, while earning 3%. When you pay a mortgage of $ 1,000 monthly using this credit card, you will earn $ 360 in the first year minus $ 300 transaction fees.
Unfortunately, credit card offers are not so common, which can offer cashbacks of more than 2.5% for purchases that do not fall into any particular category. However, there are credit cards that you can use to make a mortgage payment with a credit card that offer rewards in the form of miles or points that can be spent on any category of purchases.
The biggest drawback when you make a mortgage payment with a credit card
There are no ideal options for credit cards to pay for a mortgage, but, as you can see from the above, you can analyze different options and choose the most appropriate one for yourself. It should also not be forgotten that when you make a mortgage payment, you undoubtedly have an impact on your credit rating. By making large payments, you create a large balance, your total debt grows, and your credit utilization rate increases. This of course affects your credit score.
In this case, of course, the size of your credit line also matters. The larger your credit limit, the less your mortgage payments with a credit card will have an impact on your credit. In any case, you should not forget about the status of your credit rating and, before making a mortgage payment, ask your credit report in one of US credit bureaus to understand whether such a payment would be detrimental to your credit.
Top options for make a mortgage payment with a credit card
The available options to make a mortgage payment with a credit card are becoming less and less every year, so before you decide to do this, ask your credit card issuer and your mortgage company about the possibility of doing so. It is worth analyzing all the available options in order to understand whether it will be profitable for you or better to pay your mortgage in the traditional way.
You can choose different credit card options that offer the best conditions, but none of them will be perfect. Not all of them will be able to fully compensate for the commission that you will have to pay.
Read our financial blog to find out how to manage your personal finances most profitably and efficiently. If you still have questions, you can simply email to us and get advice from our financial experts. Leave your comments and ask your questions below, we will help you find the best options for your particular situation.