Weighing the Benefits and Risks: Paying Your Mortgage via Credit Card


It is possible to pay your mortgage with a credit card, but it will require some work. In general, mortgage lenders do not take credit cards. A mortgage originator may incur transaction-related fees. Lenders also dislike the notion of you paying off one debt with another.

Therefore, you must utilize a third-party service in order to pay your mortgage with a credit card. However, this service costs money. Before whipping out your credit card, you should consider the price. In a few instances, if the benefits outweigh the costs, it is worth considering.

Using a Credit Card to Pay Your Mortgage: A Step-by-Step Guide

Even if your lender does not accept credit card payments, you can still pay your mortgage using the third-party payment service Plastiq. This service is however exclusive to Mastercard and Discover credit cards.

There is a 2.9% processing fee, so it is not inexpensive. You can add a credit card to your Plastiq account. A second consideration is the delayed time after making a payment to your mortgage lender. It may take the lender up to eight business days to receive payment. Therefore, you must be organized and consider how long it will take for the lender to receive the funds.

Is Using a Credit Card to Pay My Mortgage a Wise Choice?

You are now aware of how to pay your mortgage with a credit card and the associated fees. If you’re pondering why anyone would pay the fee, here are four instances in which using a credit card may (or may not) be advantageous:

  • Earning rewards with a credit card.
  • Earning an enrollment incentive.
  • Avoiding a payment lateness.
  • Preventing a foreclosure.

Earning Rewards with a Credit Card

This may seem like a wonderful idea, but there are some practical considerations to take into account. I have already mentioned the 2.9% fee associated with using Plastiq. You must calculate the calculations to determine if you will be financially successful.

Suppose your mortgage payment is $2,000 per month. Using Plastiq would cost you $58 ($2,000 x 0.029). If you received 2% cash back, you would receive $40 ($2,000 x 0.02%). Therefore, you would lose $18 on this transaction.

If you’ve read online tales about earning great rewards in this manner, you may be surprised to learn that it’s not simple to implement this strategy. In some instances, the rewards may have been collected by a personal finance industry affiliate with an affiliate relationship with Plastiq, which offsets any fees. On the other hand, in some of these instances, the emphasis is on accumulating rewards from a sign-up incentive. This is an idea that frequently succeeds.

Earning an Enrollment Incentive

If a sign-up bonus is your desired recompense, it is simpler to come out on top. Let’s say you can earn $500 or 50,000 miles (worth $500 or more) if you spend $2,000 on your new credit card account within the first three months. In this instance, your incentive is $500 (or redeemable miles), and after deducting the $58 fee, you are $442 ahead. If there is an annual fee that is not waived for the first year, it will also reduce your profit.

But if you’re not seeking a sign-up incentive, you should calculate whether the rewards you’d earn are worth the fee. They likely will not be.

Preventing a Foreclosure

Insufficient funds can sometimes place a person on the verge of foreclosure. You may believe that the possibility of losing your home is worth using your credit card repeatedly. But because the majority of credit cards have high annual percentage rates, your finances will deteriorate significantly over time. If you are having difficulty making mortgage payments without using your credit card, resist the temptation to obtain a cash advance.

Typically, cash advances have extremely high APRs and transaction fees. Adding insult to injury, there is no grace period. You will begin paying interest immediately. Contact your mortgage lender to discuss options if you are in dire need of cash.

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Understanding the Impact on Your Credit Score

It is possible to pay your mortgage with a credit card, but it will require some work. In general, mortgage lenders do not take credit cards.

Putting a significant amount on your credit card affects your credit utilization ratio, which is the ratio between the amount of credit you’ve used and the amount of available credit. Your ratio should be below 30%, but to maintain a high grade, you should keep it below 10%.

For instance, if you have a $3,000 limit and use your card to make a $2,058 (remember, there is a $58 fee) mortgage payment, your utilization ratio is nearly 69% (2,058 / $3,000). If you intend to pay off your credit card balance promptly, your credit score could still take a blow, but it will recover if your utilization ratio remains low.

If you have a high credit score and are financially stable, it may be worthwhile to occasionally pay your mortgage with a credit card to collect a sign-up incentive. Simply ensure that you do not carry the balance into the following month.

Pros and Cons

Before making a decision, consider both the benefits and drawbacks of paying your mortgage with a credit card. Here is a summary of advantages and disadvantages to assist with your decision-making.


  • You can collect rewards with a credit card.
  • It can help you obtain a credit card’s sign-up incentive.
  • It can help you avoid mortgage late payment penalties.
  • You can delay the foreclosure process.


  • It can temporarily inflict devastation on one’s credit score.
  • You can incur credit card debt if you do not pay off the balance promptly.
  • Plastiq is subject to a 2.9% surcharge.


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Source: US News

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