{"id":42996,"date":"2024-11-18T12:37:42","date_gmt":"2024-11-18T20:37:42","guid":{"rendered":"https:\/\/getjerry.com\/wp-site\/?p=42996"},"modified":"2024-11-19T21:58:07","modified_gmt":"2024-11-20T05:58:07","slug":"can-you-use-a-credit-card-to-pay-mortgage","status":"publish","type":"post","link":"https:\/\/jerry.ai\/home-insurance\/can-you-use-a-credit-card-to-pay-mortgage\/","title":{"rendered":"Can You Use a Credit Card to Pay a Mortgage?"},"content":{"rendered":"\n

Can you pay your mortgage with a credit card? Maybe. Some lenders allow you to use your card\u2014and some don\u2019t. But the real question is: even if your lender does accept credit cards, is it a smart way to pay?<\/strong><\/p>\n\n\n\n

With lots of red tape and hefty fees, it likely isn\u2019t<\/p>\n\n\n\n

Those points can be tempting, though. That\u2019s why car and homeowners insurance<\/a> app Jerry has gathered everything you need to know about paying your mortgage with a credit card.<\/p>\n\n\n\n

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Can you pay your mortgage with a credit card?<\/h2>\n\n\n\n

If you want to pay your mortgage with a credit card, it might be possible. However, many experts warn that the process is neither easy nor wise: most mortgage lenders don\u2019t accept direct credit card payments, and the go-betweens can charge an arm and a leg.<\/p>\n\n\n\n

That being said, there are some instances where it might make sense.<\/p>\n\n\n\n

Terms of the mortgage lender<\/h3>\n\n\n\n

Lending institutions that offer mortgages don\u2019t usually accept credit card payments<\/strong>, so you\u2019ll have to find a workaround.<\/p>\n\n\n\n

You may wonder why; after all, it\u2019s your credit card and your mortgage, so you should be able to pay how you want. But the banks have good reasons.<\/p>\n\n\n\n

First, if mortgage companies were to accept credit cards, they\u2019d have to pay processing fees\u2014typically 1.5% to 3.5%<\/strong> per transaction. So for a monthly mortgage payment of $2,000, the bank might have to pay up to $70 in fees. Multiply that by the thousands of mortgage payments they accept each month, which could add up to a lot of money.<\/p>\n\n\n\n

The other, more important, reason is that most banks don\u2019t like the idea of you paying one debt to take on another debt\u2014it just doesn\u2019t bode well for your finances.<\/p>\n\n\n\n

Terms of the card issuer<\/h3>\n\n\n\n

Depending on your credit card issuer, you may have a tough time paying your mortgage<\/strong>. Visa and American Express, for example, don\u2019t allow mortgage payments, even through a third-party service.<\/p>\n\n\n\n

It all comes down to financial viability. Many lenders believe\u2014perhaps rightly so\u2014that a borrower who can\u2019t afford to pay their mortgage puts it on a credit card and then gets saddled with 15-20% interest on that credit card will eventually default payments.<\/p>\n\n\n\n

This, of course, is not always the case, but lending institutions have to protect themselves from that risk.<\/p>\n\n\n\n

How to pay your mortgage with a credit card<\/h2>\n\n\n\n

Despite the hurdles, many people still want (or need) to pay their mortgage with a credit card. There are ways.<\/p>\n\n\n\n

Third-party payment services<\/h3>\n\n\n\n

Some third-party services, like Plastiq, act as a go-between, allowing you to pay your mortgage and other bills via credit card. You pay them via credit card, then they send an EFT or a check to the mortgage lender.<\/p>\n\n\n\n

Pretty straightforward.<\/p>\n\n\n\n

Beware, though: there is a 2.85% fee per transaction, and not all cards are accepted. The only credit cards that currently participate are Mastercard, Discover, JCB International, and Diners Club International. So, if you don\u2019t have one of those, you can\u2019t use the service.<\/p>\n\n\n\n

Ideally, if you pay this way, you turn around and immediately pay off the credit card you used (including the mortgage payment and any processing fees). This would allow you to earn points but not pay further interest payments.<\/p>\n\n\n\n

Key Takeaway<\/span><\/span><\/div>
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If you\u2019re using a credit card because you want to earn points, do the math first. It\u2019s very likely that the fees you pay will be equal to or more than any rewards you\u2019ll earn.<\/p>\n<\/div><\/blockquote>\n\n\n\n

Gift cards<\/h3>\n\n\n\n

Another option is to get a prepaid credit card or gift card that you can use to move money to your checking account. Many options exist, such as the American Express Bluebird card, and this allows you to get around the problem of lenders not accepting credit cards.<\/p>\n\n\n\n

You can load the Bluebird card with cash or gift cards, or you can have your paycheck or government funds added via direct deposit, making it easy to pay your mortgage.<\/p>\n\n\n\n

Lastly, you can convert prepaid gift cards into money orders, which can then be used to pay your mortgage. This is only recommended if you can go into an actual brick and mortar location to pay; if money orders get lost in the mail, there\u2019s not too much you can do about it.<\/p>\n\n\n\n

What to consider when paying your mortgage with a credit card<\/h2>\n\n\n\n

As you can see, there is a lot to consider when paying your mortgage with a credit card. It\u2019s essential to keep track of your finances and pay close attention to interest rates and fees, or you could end up much further in debt.<\/p>\n\n\n\n

Cost of interest<\/h3>\n\n\n\n

Paying your mortgage with a credit card can result in costly interest charges, especially if you don\u2019t pay off your balance every month. For the most part, taking secured debt at a low interest rate and transferring it to a credit card with a relatively high interest rate just doesn\u2019t make sense.<\/p>\n\n\n\n

Fees vs. rewards<\/h3>\n\n\n\n

You may consider paying your mortgage with a credit card so you can earn rewards: this is usually the wrong move. For the most part, any fees you\u2019ll pay for using a third-party processor will outweigh the rewards you\u2019ll earn.<\/p>\n\n\n\n

The only time this works is if you earn more in rewards than you have to pay in fees\u2014for example, you pay 2.85% to Plastiq, but earn 3.2% in credit card rewards. Currently, however, the average credit card reward is just 2.3%.<\/p>\n\n\n\n

Effect on your credit score<\/h3>\n\n\n\n

Generally, having a mortgage and paying it on time is excellent for your credit score. However, paying your mortgage with a credit card can wreak havoc on your finances.<\/p>\n\n\n\n

Mortgage payments are not cheap, and adding that much to your credit card balance can negatively impact your credit utilization ratio. That\u2019s the ratio of your current debt to your credit card limits, and you want to keep it below 30%.<\/p>\n\n\n\n

Likewise, if you wrack up a lot of credit card debt but only make minimum payments, interest charges can quickly get out of control\u2014you could end up paying hundreds of dollars more than the original amount.<\/p>\n\n\n\n

Key Takeaway<\/span><\/span><\/div>
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Mortgage payments usually come with low fixed interest rates. Meanwhile, the average interest rate on new credit cards is above 18%.<\/p>\n<\/div><\/blockquote>\n\n\n\n

Should you pay your mortgage with a credit card?<\/h2>\n\n\n\n

In general, no: you should not pay your mortgage with a credit card. However, sometimes you may have no other choice, or the circumstances may make it worthwhile.<\/p>\n\n\n\n

One specific time it is worth it is when you have a new credit card offering a substantial sign-on bonus. Say, for instance, your card offers 50,000 points if you spend $3,000 in the first three months: that would be worth it because the bonus will far outweigh any fees.<\/p>\n\n\n\n

Just remember: pay your credit card bill in full and on time, so you don\u2019t get hit with crazy interest payments!<\/p>\n\n\n\n

Finding affordable home insurance<\/h2>\n\n\n\n

If homeownership is stretching your budget thin, try shopping for more affordable home insurance. The cost of mortgage payments, property taxes, and home repairs are often beyond your control\u2014but insurance is a bit more flexible.<\/p>\n\n\n\n

Different companies offer different rates and coverages. By shopping around, you can ensure that you get the best coverage possible for the most reasonable price.<\/p>\n\n\n\n

Don\u2019t have the time to do it on your own? Car and homeowners insurance expert Jerry can help.<\/p>\n\n\n\n

After providing you with a comprehensive cross-analysis of the best policies across providers, Jerry will handle the phone calls, paperwork, and renewals for your top pick so that you don\u2019t have to. They even help cancel your old policy! So why do all that extra work when Jerry can do it better?<\/p>\n\n\n\n

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\n FAQ <\/h2>\n \n \n \n
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    \n \n \n Can you use your credit card to to pay a mortgage? <\/span>\n\n \n <\/span>\n <\/div>\n\n \n \n
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    Yes, you can use your credit card to pay a mortgage<\/strong>\u2014as long as you\u2019re willing to put in the work. Unfortunately, you can\u2019t pay your mortgage lender with credit directly, so you must find and use a third-party processor. It can be time-consuming and expensive.<\/p>\n<\/div>\n <\/div>\n<\/li>\n\n\n\n

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    \n \n \n When should I pay my mortgage with a credit card? <\/span>\n\n \n <\/span>\n <\/div>\n\n \n \n
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    You should only pay your mortgage with a credit card when you can ensure that the benefits outweigh the risks. For instance, if the points reward you receive from your credit card will be far greater than any fees you are charged.<\/p>\n<\/div>\n <\/div>\n<\/li>\n<\/ul>\n<\/div>\n\n \n <\/div>\n\n\n\n

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