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Can You Pay A Mortgage With A Credit Card?
Are you using your credit cards a great deal these days? The coronavirus pandemic has left thousands of businesses shuttered and millions of Americans out of work.
If you’re one of them and are worried about how you’re going to pay your bills next month, you’re not alone. In these uncertain economic times, more and more Americans are using credit cards to get them through this crisis, until the lockdown ends, and they can get back to work.
One of the challenges of relying on credit cards is that it is difficult to pay some bills with them. One big monthly bill that can be difficult to cover on credit cards is a mortgage.
Many lenders state that they will not accept credit card payments on monthly mortgage bills. However, is this rule written in stone, or are there exceptions to it?
Let’s take a closer look to see if you can pay your mortgage with a credit card.
Workarounds: Paying Your Mortgage with a Credit Card
If you want or need to use credit cards to make mortgage payments, you do have some options.
Here are a few things you can do to cover your monthly house payments with a credit card.
Some innovative financial apps will allow you to use your credit cards to pay bills that normally do not accept credit card payments, including mortgages.
One of the most popular credit card-enabled bill-paying apps out there is Plastiq. Plastiq users can link their credit cards to their Plastiq account, then, for a 2.5% fee, use Plastiq to pay their mortgage.
Pay your mortgage with Plastiq.
However, you’ll have to have a credit card that allows its use for these sorts of payments before making use of this service.
Visa, Mastercard, and American Express do not allow its cardholders to pay mortgages using Plastiq; JCB, Discover, and Diners Club have fewer restrictions, however.
Overall, while mortgage payments with these third-party systems can be costly, you may be able to offset their processing fees a bit if your credit card has a rewards program.
Another option you can consider for paying your mortgage with a credit card is to use a prepaid card. Prepaid credit cards act somewhat like a debit card; you have to “load them up” with cash.
Once you do, many prepaid credit cards such as the American Express Bluebird card can be used to pay bills such as mortgages.
While you’ll still need to put money against these cards to use them, you won’t have to worry about the processing fees that services like Plastiq charge users for expanding the bill-paying capacity of their credit cards.
Indirect Approach: The Money Order
If you need to make your house payment using your credit card but don’t have a prepaid card or billpaying service, there are still ways for you to do it, albeit indirectly.
You could use your credit card to purchase a money order or a series of money orders. These money orders could then be mailed to your lender directly or brought in person to the bank to make your monthly mortgage payment.
While a bit more tedious than the other methods, money orders do not cost much and nearly any bank or lender will accept them, making this a great option for putting your credit cards to work paying your mortgage.
Why Can’t I Pay My Mortgage with a Credit Card?
There are two major hurdles to making your monthly house payment with a credit card. The first one is that many of the major credit card companies do not permit cardholders to use them to make mortgage payments.
Mastercard, Visa, and American Express all have rules limiting or prohibiting their use for mortgage payments.
Additionally, many of the major banks that issue these cards to consumers also prohibit their use for mortgage payments as well.
Finally, many lenders that issue mortgages to homeowners prohibit the use of credit cards for monthly mortgage payments as well.
Overall the mortgage and banking frowns upon the use of credit cards for mortgage payments since it is essentially using a debt (a credit on your card) to pay another debt (the mortgage on your home, which the lender holds).
When Does Paying a Mortgage with a Credit Card with a Mortgage Make Sense?
Even if you can pay your mortgage with a credit card, doing so can be expensive.
The processing fees of third-party companies and the interest expenses associated with the credit cards themselves can make paying bills with credit cards cost-prohibitive.
However, there are times when it may make sense to pay your mortgage with a credit card.
For example, if you fear you’re going to default on your mortgage if you don’t use your credit card, then it is reasonable to use it; after all, you have no other choice.
Additionally, if you can leverage a credit card’s introductory period or rewards programs to offset processing fees and other costs, using a credit card to pay the mortgage may make sense as well.
It’s possible to pay your mortgage with a credit card, and in some cases, it makes very good sense to do so.
However, before you start using your credit cards to pay the mortgage and other bills, make sure you have a good plan for doing so.
Otherwise, using your credit cards to pay big bills could leave you deeply in debt and worse off financially than when you started.
Pay Your Mortgage With Plastiq
Find out if Plastiq is a good fit for your payments
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