Can You Make a Mortgage Payment With a Credit Card?

Paying a mortgage with a credit card is a wise decision if you are going through financial hardship, as it can help you buy some time. Plus, it comes with sizable rewards and benefits. 

A quick reality check — Not every mortgage lender accepts direct credit payments. If they do, you cannot avoid the fees and other charges. 

So, is it worth it to pay the mortgage with credit cards? Let’s find out in this blog. We have written the workarounds, ways to maximize profits, and pros and cons to help you make a clear and conscious decision. 

Let’s dive right in!

Can You Pay a Mortgage With a Credit Card?

Yes, it is possible to pay your mortgage with your credit card, but there are a lot of factors you need to consider before doing so. Mortgage is perhaps the biggest expense you’re paying every month. If by any chance, you wish to pay it with your credit card to get some cash back benefit and reap additional rewards, you can do so. 

Mind you, the methods are complex in reality as generally mortgage lenders and financial institutions do not accept payments from credit cards due to the risks and fees. 

But looking at the bright side, you can pay the mortgage with a credit card. We have explained the workarounds in the next section.  

How to Pay Mortgage With a Credit Card? – 5 Useful Ways

Remember that paying a monthly home loan with a credit card involves transaction fees and interest rates (if you fail to pay the balance in full). Keep these things in mind as you decide, and if you choose to go ahead with this option, here are the 5 best methods waiting for you. 

If your lender does not accept credit card payments, you can search for third-party services that act as a middleman. These services generally collect credit payments and send checks or ACH transfers to the mortgage companies on behalf of the borrower. 

However, one thing to take into account is the fees and service charges. For example, the business payment platform Plastiq charges 2.85% fees per transaction. 

If your lender only accepts debit payments, what you can do is purchase a prepaid debit card of the same amount as your mortgage and use it. For this, you first have to check with your lender and make sure to know the names of prepaid debit cards that they accept. 

Simply put, just buy a prepaid debit card with your credit and use it to pay the mortgage. 

Also Read: How to Transfer Amazon Gift Card Balance?

Money orders are another way you can pay the mortgage to the lender. For this, you need to purchase a money order of the same amount as your mortgage with your credit card. After purchasing, deposit the money order in your bank account and transfer the amount to your lender. 

Make sure that your lender accepts money orders as a form of payment. Another thing to note is that money orders have a limit of $1000, which might not be convenient if the mortgage exceeds the limit. 

Balance Transfer is a method of transferring an amount from one credit card to another or a bank account. If you do not have enough money in your account to pay the mortgage, what you can do is move the desired amount from your credit card. 

The credit issuers generally charge 3-5% per transaction and APR on the balance. Note that the charges differ for every issuer, so check these points with your card issuer before proceeding. 

A cash advance is a type of loan that you take from your credit card issuer. You can use this method especially when you are in financial trouble. For this, visit any ATM, take out cash against your credit card, and then deposit the cash in your deposit account. 

If you choose to go this route, note that credit companies charge cash advance fees and the interest rates kick in from the moment you receive the money. 

So these are the 5 useful methods by which you can pay your mortgage with your credit card. 

Should You Pay Mortgage With Credit Card?

Well, the answer depends on every consumer’s needs and financial situation. Many consumers prefer taking extra short-term loans from platforms like Minto Money and Payday eLoan Warehouse to pay the mortgage. However, talking about the credit cards in general, the answer is:

• Yes, if you want to earn rewards and other benefits.
• No, if you require more time to pay your balance. 

Here are some of the key factors that will help you decide: 

Rewards: You probably need to have an excellent CIBIL score and a top-notch credit issuer to use your mortgage payments as a simple way to accrue credit card rewards. And, even if you receive any incentives at all, the costs you pay will frequently exceed the amount.

Fees: You might be charged fees by businesses and third-party services that offer money orders. If you make purchases similar to cash, such as money orders, your credit card may also charge fees for cash advances and balance transfers. Even though these costs might not seem like much at first, they quickly add up if you have to pay them every month.

Interest Rate and Offers: If you are unable to pay off your debt in full each month, interest may be charged on your purchases and balance transfers.

If your card has a promotional 0% APR offer, you might be able to temporarily avoid paying interest on purchases or balance transfers. However, ensure that you thoroughly study the rules and that you can afford to pay off the remaining amount before the promotional time expires.

Foreclosure: If your property is on the verge of foreclosure, and you’re thinking of paying the mortgage with a credit card, it is not the correct way out. As you’re already trapped in multiple debts of missing payments and adding another loan will make the condition worse. You must talk to your financial advisors to find out other ways to avoid foreclosure. 

Whether you should make a mortgage payment with a credit card or not, depends on the advantage you gain. However, you must look after the key factors that we discussed here for a fair choice. 

Paying Mortgage With Credit Card: Pros and Cons 

Making a financial decision is not always a piece of cake, as it requires deeper research and analysis. Similarly, one must do their research regarding paying the mortgage with a credit card. 

To ease your load, we have laid down the positives and negatives below, which will aid in choosing the right financial path. 

Pros:

• Credit card rewards: Paying your mortgage with a credit card allows you to earn cash back, rewards, and purchase coupons. 

• Boost credit score: Paying a mortgage with a credit card helps to build credit. All you need to do is make regular transactions with credit cards and pay the amount in full. 

• Avoid payment delays: In case of financial trouble, instead of delaying the mortgage which can accrue a high interest rate, you can decide to pay timely with a credit card. 

Cons:

• Hefty fees and other charges: Paying a mortgage from a credit card involves multiple fees like transaction fees, cash advance fees, and more. 

• Difficulty in managing finances: If you fail to repay the mortgage amount to the credit company on time, a high interest rate will start accruing. All this can create financial distress and difficulty in budgeting. 

• Impacts the credit utilization ratio: According to the credit utilization rule, you should not spend more than 30% of your total limit. If you have a low line of credit, and you pay a mortgage exceeding that, your credit utilization ratio will get hampered. 

These are the positives and negatives you need to keep in mind while deciding to pay your mortgage with a credit card. 

We discussed whether credit cards can be used to pay for a mortgage, the 5 payment methods, and the benefits and drawbacks of doing so. Hopefully, this blog has resolved all your queries. If you found it helpful, please share the info with your friends and family. 

Read Next: How to Transfer Visa Gift Card to Bank Account? – 10 Simple Ways 

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