Can You Make A Mortgage Payment With A Credit Card: The Pros And Cons

Can You Make A Mortgage Payment With A Credit Card

 Americans owe more than $1 trillion in credit card debt. So it's natural to wonder if you can use a credit card to make your mortgage payment. The answer: It depends on your credit card issuer and the terms of your mortgage agreement.

If you have a good credit score, you may be able to use your credit card to make your monthly mortgage payment. But there may be a processing fee, and you'll likely have to pay interest on the balance.

 

The Pros of Making a Mortgage Payment with a Credit Card

There are a number of benefits to making your mortgage payment with a credit card. Here are the top three:

1. Rewards: 

Most major credit cards offer rewards for spending money on them. This can include cash back, points that can be redeemed for travel or other items, and more. When you use your credit card to make your mortgage payment, you’re essentially getting paid to do so.

2. Late Fees:

 If you miss a mortgage payment, you can be hit with hefty late fees. But if you make the payment with a credit card, the late fees are typically waived. This can be a great way to avoid missing a payment.

3. Fees: 

The same is true for balance transfer fees. If you transfer your debt to a lower-interest card, you could end up paying a fee. But if you make the payment with your credit card, you'll avoid paying any of the balance transfer fee.

The Cons of Making a Mortgage Payment with a Credit Card

When you make a mortgage payment with a credit card, you're essentially borrowing money at a high interest rate to pay off your mortgage. This can be a costly mistake.

Here are some of the cons of making a mortgage payment with a credit card:

-You'll incur a high interest rate on the balance you carry. The average interest rate on a credit card is around 17%, while the interest rate on a mortgage is around 4%. So, you'll be paying much more in interest by using a credit card.

-You may end up paying more for your mortgage in the long run. When you make a mortgage payment with a credit card, you're essentially paying high interest on a borrowed amount. If you don't pay off the debt, you're basically paying it off twice.

-You may be limited on how much you can pay with a credit card. The limits on a credit card vary from card to card. And with more cards offering higher limits than ever, you may not be able to pay your entire mortgage bill with the amount you have available. You'll also be limited on how you can pay, and whamakepes of payments you can make.

You’re better off paying your mortgage using a low-interest loan.

How to Decide if Making Your Mortgage Payment with a Credit Card is Right for You

When you have extra money, it can be tempting to put it towards your mortgage. After all, wouldn’t it be great to pay off your home loan years ahead of schedule? But is paying your mortgage with a credit card really the best option?

There are a few things to consider before making this decision. First, how much interest are you paying on your credit card? If it’s more than the interest you’re paying on your mortgage, then you’re better off sticking with your regular payment plan.

Another thing to consider is your credit score. When you pay your mortgage using a credit card, you could be damaging your credit score. Credit scoring models put a lot of emphasis on your payment history. This means that if you miss a mortgage payment, it could have a negative impact on your credit score.

To avoid damaging your credit score, you’ll want to put more money towards your mortgage than you are paying on your credit card each month.

If you decide to pay your mortgage with a credit card, it’s a good idea to make a payment close to the due date, since this will make it easier for you to avoid paying any late fees. Once the due date approaches, you’ll want to make a payment to avoid accumulating late fees.

Here's another reason to pay your mortgage with a credit card: you may end up lowering your payments. By paying a little more than the minimum, you can save money. Or, if you decide to make several monthly payments, you'll be able to spread out the payment over the entire length of your mortgage.

It can take time to pay off a mortgage, so this isn't the best option if you need to spend your money immediately. But if you have extra cash available each month, it can be worth it.