Q: Is it actually possible pay my mortgage with a credit card? I’ve heard that it can be done with certain mortgage companies but don’t know where to turn to find our more.
A: Well first of all, you know I’ve got to ask… are you looking to pay a mortgage with a credit card for purposes of convenience or leveraging this big monthly spending obligation in order to earn lots of reward points, miles or cash back? Or are you essentially borrowing the money with a credit card because you don’t have the funds on hand to make your payment?
If it’s the latter scenario, then this “how to” advice isn’t for you, as that would be an unfortunate case of kicking the can down the road (and if you haven’t seen this movie before, it doesn’t end well). If circumstances don’t allow you to service your mortgage I would recommend speaking to a financial planner, attorney or mortgage loan originator to explore options (i.e. loan modification, foreclosure, short sale, etc.). Simply saddling your credit card issuer with the payment, even for one month, thinking you’ll catch up later is not the answer.
However, if you simply want to explore the options of paying your mortgage with a credit card in order to leverage such a large monthly spend category to earn cash back, reward points or miles, then bravo – keep reading!
For starters, it’s important to point out that the real estate bubble and subsequent crash in the past decade literally changed everything. During the ’00’s there were all kinds of crafty ways to pay mortgages. However, after the crash the housing finance world dramatically changed, largely because some banks got burned on one or both fronts since many bank holding companies have both mortgage lending and credit card divisions. During the crash both of these critical lines of business suffered huge losses due to customer defaults. Not to mention that capitalism itself almost collapsed during that turbulent period, but that’s too big of a topic to tackle here.
What options exist in 2016?
There is a third-party service called ChargeSmart that will let you pay using a credit card. The fees to do so are just a bit over 2.5% last I checked. However, that’s going to more than offset any potential benefit from earned rewards.
Meanwhile if it’s a rent payment you need to make, then check out WilliamPaid…
WilliamPaid is free if using a bank account, but if you use a credit card the fee was 2.95% the last time I checked. A good option for those in apartments.
With either service, make sure you use the right card! If you need to pay this money back over time, don’t get ripped off with 15% or 20% interest from your bank. Instead consider one of these cards which give 0% on purchases.
All the options below no longer work
American Express mortgage payment?
Back at the peak of the bubble in 2007, American Express cardholders could pay any prime level mortgage from American Home Mortgage for a one-time fee of $395. If you paid you always paid your credit card bills on time and in-full, this option definitely made sense considering the high cash back offered on the AmEx Blue Cash.
However as of 2015, the option to pay a mortgage with American Express no longer appears to be available.
Bank of America card mortgage payment?
The other company which offered options (abeit indirectly) for paying a mortgage using a credit card was Bank of America. All FIA issued cards (which is a wholly-owned BofA subsidiary) offered the ability to pay bills for free using your credit card. Although this option specifically created for mortgages, many would use this service to pay mortgages with credit cards from Bank of America. Sounds like a cool trick until you hear that no points or rewards were given on FIA bill payments… so there really wasn’t any point in using it for your mortgage.
Back in 2010 the FIA Bill Pay Choice was canceled.
Any way to still pay and earn points?
Unfortunately, not at this time. Some have brought up the idea of using Paypal to get money to pay their mortgage, but that will always be a losing proposition… even the best cash reward credit cards won’t make up the 3% in fees that Paypal charges. That being said, it still could be a strategy to do it, if you’re using it because you need financing (and therefore, rewards aren’t a priority).