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This article was last updated Sep 04, 2018. Terms and conditions may have changed. For the most accurate information, please consult the issuer website.
If you’re paying a mortgage every month, you may have wondered whether you could use a credit card to pay it in order to earn more points, miles or cashback rewards. It’s a tempting thought. If you’re paying $2,000 a month on your home mortgage, for example, and you have an unlimited points credit card that gives you 2 points per $1 spent on all purchases, you could accumulate 48,000 points a year.
Unfortunately, none of the top banks currently accept credit cards for mortgage payments.
“Paying your mortgage with a credit card often sounds like a great way to rack up rewards points until you do the math,” said Matt Schulz, chief industry analyst at CompareCards.
That being said, there are a couple of ways for homeowners to cash in on their hefty housing payment. Whether or not this is a good idea is the question.
“As with paying for college tuition or taxes with a credit card, there are often fees that come along with the transaction that cost more than the value of any rewards you would receive,” Schulz said.
What are your options? Read on to find out.
Option #1: Apply Wells Fargo cashback earnings to your Wells Fargo mortgage
Although no credit card allows you to pay for your mortgage payment directly, Wells Fargo gives mortgage borrowers a way to save money on their mortgage payment.
If you hold one of the following Wells Fargo cards — the Wells Fargo Cash Wise Visa® card, Wells Fargo Visa Signature® Card, Wells Fargo Rewards Visa® Credit Card, Wells Fargo Platinum card* and Wells Fargo Propel American Express® card — the cash back you earn can go toward your Wells Fargo mortgage.
The points you earn on your Wells Fargo cards can be redeemed in its Go Far™ Rewards website. One of the options is to set up and auto-redeem to pay down your Wells Fargo mortgage.
Option #2: Pay with Plastiq (but only if you can justify the fee)
Another option is using a third-party company that allows you to use your credit cards where they’re not accepted. Plastiq, an online bill payment service, allows you to put almost any expense on your credit card, including rent, mortgages, taxes and even business supplies, as a way to boost your points or miles. After opening an account, you enter your information, the payment amount and the card you’d like to use to pay for it.
Watch out for the fee: Plastiq then charges your card for the payment, along with a 2.5% fee. So if you make a mortgage payment of $2,000 on your credit card, it will cost you $50 for the privilege. If you do that every month for a year, it will cost you $600. This is on top of an annual fee, if your card charges one. In order to avoid paying interest on the card on top of the third-party service fee, you must pay off your mortgage amount every month without fail.
So if you’re using a 2% cashback card to pay your mortgage, you’re losing money — and not benefiting from the cashback reward — every time you do this. Plus you can’t use Visa or American Express cards on Plastiq to pay your mortgage, which limits your options.
“You don’t have to be an accountant to understand that it doesn’t make financial sense to spend 2.5% in order to get 2% back in return,” Schulz said. “Make sure you do the math first.”
One credit card that could work with Plastiq, even with the 2.5% fee, is the IHG® Rewards Club Premier Credit Card. It offers a generous sign-up bonus: Earn 140,000 bonus points after spending $3,000 on purchases within the first three months of account opening. Plus, the annual fee is $89. By paying your $2,000 mortgage on this card using Plastiq for two months, you’ve more than hit the required spend to earn the sign-up bonus.
Earn 140,000 bonus points after spending $3,000 on purchases within the first three months of account opening Earn up to 25 points total per $1 spent when you stay at an IHG hotel. Earn 2 points per $1 spent on purchases at gas stations, grocery stores, and restaurants. Earn 1 point per $1 spent on all other purchases. Global Entry or TSA Pre✓® Fee Credit of up to $100 every 4 years as reimbursement for the application fee charged to your card See additional details for IHG® Rewards Club Premier Credit Card
Earn 140,000 bonus points after spending $3,000 on purchases within the first three months of account opening
Earn up to 25 points total per $1 spent when you stay at an IHG hotel. Earn 2 points per $1 spent on purchases at gas stations, grocery stores, and restaurants. Earn 1 point per $1 spent on all other purchases.
Global Entry or TSA Pre✓® Fee Credit of up to $100 every 4 years as reimbursement for the application fee charged to your card
See additional details for IHG® Rewards Club Premier Credit Card
If each IHG point is valued at approximately half a cent, the signup bonus is worth about $700 when redeemed for hotel stays. Even after subtracting $100 to cover Plastiq costs, you come out $600 ahead. Of course, after the first year, the card’s annual fee kicks in and you won’t earn a sign-up bonus. For that reason, paying your mortgage with a credit card isn’t really a sustainable, long-term strategy.
Option #3: Earn credit card rewards in other ways
In the end, you’re probably better off paying your mortgage from your checking account. If you’re looking for other ways to earn points on your credit card without jumping through hoops, check out these simple ways to do it:
- Get cards that offer the most points in the categories most important to you, like travel or groceries.
- Sign up for bonus point alerts.
- Get more value for your points by redeeming them on special websites like Chase Ultimate Rewards®.
- Take advantage of quarterly categories for higher bonus points.
- Pay other monthly bills with the card.
- Open a checking or savings account at a bank to earn more bonus points, like the Bank of America® Preferred Rewards program.
- Add a user to your card to increase your earning potential.
- Pay for large purchases (but pay off the card quickly to avoid interest charges).
- Combine similar Issuer cards — like the Chase Freedom® and the Chase Sapphire Preferred® Card — to maximize points you can earn.
“Ultimately, the best way to maximize your credit card rewards is to find the card that best fits your lifestyle,” Schulz said. “For example, if most of your spending is on dining and gas, look for cards that focus on those areas. It’s all about getting rewarded for what you’re already spending. Focus on that and you’ll be on your way to winning the credit card rewards game.”
*The information related to the Wells Fargo Platinum card has been independently collected by CompareCards and has not been reviewed or provided by the issuer of this card prior to publication.