Can I Pay My Mortgage on a Credit Card?

Paying your mortgage with a credit card may seem like a convenient option You can earn rewards, buy yourself more time to pay, and simplify bill paying by putting all expenses on one card But this strategy comes with roadblocks and risks. Mortgage companies don’t directly accept credit cards, so you’ll need to use a third-party service that charges costly fees. Racking up large credit card balances can also hurt your credit and your financial health. Read on to learn if paying your mortgage with plastic makes sense for you.

Is it Possible to Pay a Mortgage with a Credit Card?

Technically, yes you can pay your mortgage with a credit card. But it’s rarely as simple as handing over your plastic. Mortgage lenders generally won’t let you charge your monthly payment directly. The processing fees eat into their profits too much And they want to avoid chargeback risk if you dispute the transaction

You’ll need to take an extra step and use a third-party payment processor. With services like Plastiq you can charge your credit card and they’ll send a check or electronic payment to your mortgage servicer. There’s a 2.5-3% processing fee each time you pay.

Your credit card company and payment network may limit whether you can use their card for mortgage payments through these services. Many Visa and Amex cards won’t work, but Mastercards and Discovers typically will.

Should You Put Your Mortgage on a Credit Card?

Paying your mortgage with a credit card can make sense in limited cases:

• You can earn an outsized welcome bonus by meeting the minimum spend. If you’ll pocket $500+ in rewards and only pay $100 in fees, it’s worth it.

• You earn high, flat-rate rewards above the 2-3% processing fee. At 3% back, you come out slightly ahead.

• You need to delay a payment but will pay off your card before interest hits. Buys you ~30 days if your paycheck comes after your due date.

But heavy fees and risks usually outweigh potential rewards:

• Processing fees often outpace rewards earned on payments. At 2.5%, you lose money on a 2% back card.

• Credit utilization rises when mortgage payments take up your limit, hurting scores.

• Interest charges accrue if you carry a balance, easily costing more than any rewards.

• Late payments on the card mean mortgage defaults. And damaged credit.

Ways to Pay a Mortgage with a Credit Card

If you understand the risks and still want to try, here are two options:

Use a Payment Service

Plastiq and similar services accept credit cards, then send your mortgage company a check or bank transfer. Discover, Mastercard, and select Visas work. You’ll pay a 2.5-3% processing fee each time. It can make sense to earn a large one-time bonus.

Buy Prepaid Gift Cards

Some mortgage lenders accept debit cards. Buy a prepaid gift card with your credit card, set a PIN, and use it to pay your bill. You’ll pay about $5-10 per card, so multiple smaller cards may be needed. But gift cards don’t always work for money orders. And mail delays can cause issues.

Key Considerations Before Paying a Mortgage with a Credit Card

It’s not a decision to take lightly. Ask yourself:

• Do you earn enough rewards to outweigh fees? Crunch the numbers.

• Can you pay off your card in full to avoid interest? Carrying a balance costs more than rewards earned.

• Will a large mortgage payment hurt your credit scores? Keep an eye on your utilization ratio.

• Are you already struggling with bills? Adding credit card debt rarely helps.

• Is it an emergency option to avoid late payments? Be 100% sure you can pay off the card.

Paying your mortgage with a credit card can be a good rewards-earning tool in limited cases. But more often, the risks, fees, and credit damage make it an expensive choice. Consider all options to find the best way to manage your mortgage payments.

Frequently Asked Questions about Paying a Mortgage with a Credit Card

Can you pay your mortgage with a credit card?

Yes, it is possible but difficult. You’ll need to use a third-party payment service since most mortgage lenders don’t directly accept credit cards. There are also fees involved, so it’s not as simple as swiping your plastic.

Why won’t mortgage companies take credit cards?

Mortgage lenders avoid direct credit card payments to steer clear of processing fees, which cut into their profits. They also want to avoid chargeback risk if the cardholder disputes the transaction later on.

How much does Plastiq charge to pay a mortgage?

Plastiq charges a processing fee of 2.5-3% on each mortgage payment made through their service. So a $2,000 mortgage payment would incur $50-$60 in fees. These fees add up quickly.

Can you earn rewards paying a mortgage with a credit card?

Potentially yes, but you’ll likely lose money overall after paying processing fees. It can make sense if you earn a large one-time welcome bonus. But day-to-day rewards won’t outweigh the costs.

Does paying your mortgage with a credit card hurt your credit?

It can. Large mortgage payments take up your credit limit, increasing your utilization ratio, which lowers credit scores. Carrying a balance also leads to interest charges, growing your debt.