There are many valid reasons you might ask yourself, “Can I pay my mortgage with a credit card?” Perhaps you want to earn all those credit card rewards, or you want to hang onto your cash and bank a couple of extra weeks’ worth of interest. The answer is – maybe.
Some mortgage companies accept credit card payments – some do not. Some credit card companies will allow mortgage payments – and some may not. You must consider three things:
1. Card network (e.g., VISA, MasterCard, etc.)
2. Card issuer (e.g., Bank of America, Wells Fargo, etc.)
3. Mortgage lender
All three have to give the green light for a mortgage payment to be processed successfully. It’s best to check with all three parties before proceeding so that you don’t end up with a late or declined mortgage payment.
A few third-party services, such as Plastiq, let you get around some of these obstacles, but it will cost you. It will only be worth it to you if you stand to gain more in rewards than you’ll pay in fees. You’ll want to think through whether it’s the right move.
If you know a way to pay your mortgage with a credit card, there are still pros and cons to consider. Bottom line – make sure that it is worth the impact it may have on your budget, your credit, or both.
Fees vs. Rewards
If you have a credit card that earns rewards, it is tempting to charge this large bill and reap those rewards. However, if you are paying a processing fee on that transaction, make sure the price doesn’t eliminate the reward. An exception to this is if you are considering putting a one-time mortgage payment on your card. By doing this, it could potentially help you meet a minimum spending requirement for a bonus that exceeds the fee. In that case, it could make sense.
Interest Costs
If you don’t pay off your credit card balance at the end of the month, then you may pay interest and negatively affect your credit utilization ratio and credit score (see below). The interest you pay on outstanding balances may wipe out any rewards you’ve earned.
Effects on your credit score
Your credit score is calculated based on many different factors, and one of them is your credit utilization ratio. This ratio is the total debt compared to your total credit limits. This number has a significant impact on your credit scores. You want to keep the ratio low. A credit utilization ratio of 30% or lower is a good place to be.
For example, if you have a $10,000 limit on the credit card you wish to use to pay your mortgage, and you already have a balance of $1,000 on that card, a mortgage payment of, say, $3,000 would push your credit utilization to 40%.
If you add more transactions, your credit utilization will keep climbing. If you want to make mortgage payments with your credit card, try requesting a credit limit increase from your issuer to minimize the impact on your credit scores. However, keep in mind that this could also impact your credit score.
So, Can I Pay My Mortgage with a Credit Card?
If you’ve ever wondered, “Can I pay my mortgage with a credit card?” the answer is maybe. Visit or contact Strategic Mortgage to answer questions specific to your situation. We can also provide options to help you make the best mortgage decisions for you. Check out our website or contact us at (541) 275-1148.
