Anyone paying their mortgage w/ a credit card and getting miles, cash back etc? (1 Viewer)

[Drew Bethel]

Or if this is allowed...

 

[David-S]

I can pay my apt rent w/ a credit card, but they charge ~$20-$25 fee, which would kill any benefits I would be getting...

YMMV...

dave

 

[MickeS]

I can't imagine that this is allowed. When I bought my car I tried to pay some of the downpayment on a credit card they wouldn't allow that, so I find it hard to believe that a house payment could be done on a credit card. It would be pretty sweet as far as cash back goes though.

 

[Todd Hochard]

My mortgage co. (Chase Manhattan) won't allow it. I asked, and I don't carry any balances on my CCs, either.

 

[Jeff Ulmer]

I don't see any reason you couldn't pay with a credit card, but unless the banks take the card, you'd only be able to do it as a cash advance which is dinged for interest right away. My mortgage had a cash back option when I first signed up, but they eventually canceled the program.

 

[Jay Taylor]

Since the businesses that accept your payment by credit card are typically charged about 2% for each transaction I can't imagine a mortgage company accepting one. For every $1,000.00 of your payment the mortgage company would be charged about $20.00 by the credit card company.

The ~2% fee is how the credit card companies can reward you with air miles and bonuses even if you never pay them a dime in interest.

You might find a mortgage company that would accept a debit card, especially if it was with their bank, but then you wouldn't get the air miles.

Jay Taylor

 

[Leila Dougan]

MickeS, that's interesting you couldn't pay with a CC. My parents bought a $30K vehicle a few years ago and split the entire amount between two credit cards. They paid the cards off the next month. One was a GM card so they got the limit of $3,000 off the purchase of their next GM vehicle and the other gave cash rewards (I don't know the sum). So in essence, they got their new vehicle and and all the CC rewards without paying a penny of interest.

I guess it just depends on whether the dealership wants to pay the 2% fee or not. I would think, though, car dealerships are much more flexible than mortgage companies.

 

[Drew Bethel]

Interesting comments. Maybe you can't pay with a credit card, but you can pay with a CC check. I'm going to call Discover and ask if I get the cash back for paying with Discover cheques. The interest shouldn't matter because I won't be carrying a balance.

 

[Patrick Sun]

If you use a credit card check, you'll (most likely) get hit with a 3% transaction fee. Read the fine print on those CC checks!

 

[Scott Merryfield]

MickeS, that's interesting you couldn't pay with a CC. My parents bought a $30K vehicle a few years ago and split the entire amount between two credit cards.

The dealerships I've dealt with will not accept a credit card, either. They would get hit with the 2% (or whatever it is) transaction fee from the credit card company. On a $25k car, that's $500 out of the dealership's pocket.

 

[Todd Henry]

You might find a mortgage company that would accept a debit card, especially if it was with their bank, but then you wouldn't get the air miles.

There are some debit cards now that do offer air miles. I have a Bank of America debit card that gets miles on USAirways.

Todd

 

[Jeff Ulmer]

The dealerships I've dealt with will not accept a credit card, either.

I wouldn't deal with them then. If I had a credit card with a large enough limit to buy a car, and the cash to pay it off the following month, that is exactly what I would do. If the dealership refused, I'd walk.

I would agree that the service fee on the CC would make most banks not offer that option, but you could still do a cash advance (same as using the CC cheques - interest charged immediately with no grace period) and pay with that. The question is whether rewards work on tha cash advances.

If they did, and you had no balance on the card, you could take the cash advance and immediately pay off the card balance, incurring no interest from the CC.

 

[Jay Taylor]

Another confusion factor is that most debit cards may be processed as either a debit card or a credit card.

When you make a purchase, if you enter your PIN into a keypad, then the card is processed as a debit card and the merchant is charged much less than the ~2%.

If your debit card has a VISA logo or other credit card logo on it, and the merchant doesn't have you enter the PIN on a keypad, then the card is processed as a credit card and the merchant is charged ~2% for the transaction.

As a result of this different method of processing a debit card, some banks may give you air miles when the card is processed as a credit card (because the merchant was charged ~2%), but no air miles when it is processed as a debit card.

I don't know if there are debit cards that will give you air miles when you have it processed as a debit card rather than a credit card.

Jay Taylor

 

[Ryan Wright]

If I had a credit card with a large enough limit to buy a car

I do. I don't know why. Every few months American Express raises my limit. It's up to $20k now. Tell me, what the hell am I supposed to do with a twenty thousand dollar limit on a credit card?

 

[Todd Hochard]

what the hell am I supposed to do with a twenty thousand dollar limit on a credit card?

A good American citizen would promptly max it out, to "support the economy."
Traitor.
EDIT- seriously, if your credit card limits are a bit high for your requisite income, you may want to ask that they be reduced. They will adversely affect your credit rating, whether you ever use the card or not.

 

[Michael*K]

From my UAL Mileage Plus cardmember agreement: Miles are earned on net purchases only; Miles are not earned on balance transfers, convenience checks, or cash advances.

 

[Armando Zamora]

Isn't paying your mortgage with a credit card like paying a loan with a loan? Maybe that's why it's not allowed.

 

[Jeff Ulmer]

Isn't paying your mortgage with a credit card like paying a loan with a loan?

Which is precisely what credit cards are always encouraging you to do with their lower interest balance transfers. If you were to pay off the amount each month and incur no interest as a result, there is no harm to finaancing this way - assuming the plan works that way.

I suspect though that most rewards programs aren't applicable to cash advances, and therefore don't make much sense to use paying for a mortgage.

As for credit limits on cards, Amex just sent me another increase, even though I haven't ever used the card they sent two years ago. I don't see how high card limits could adversely affect your credit rating, so long as all payments are made on time and the accounts are in good standing. In fact, having that credit available should allow you to use it as collateral in the event you want a loan - just offer to shred the card, thereby using your existing credit as a bonus.

 

[BrianB]

I don't see how high card limits could adversely affect your credit rating

Because it increases your potential debt - some companies look at this in addition to your current level of debt when considering new credit. Having the capacity to rack up huge amounts of additional debt without going through the process of issuing additional cards etc is viewed as a Bad Thing.

 

[Scott Merryfield]

I wouldn't deal with them then. If I had a credit card with a large enough limit to buy a car, and the cash to pay it off the following month, that is exactly what I would do. If the dealership refused, I'd walk.

I completely understand why a car dealership does not want to accept a credit card, and I have no problem with such a policy. With many vehicles approaching $50k in price, that 2% service fee can cost the dealership $1,000 on such a vehicle. Would you be willing to pay an extra grand for the car for the priviledge of using your credit card? If the dealership will take a check from me, I'm fine with leaving the plastic in my wallet on an item I only purchase once every few years. Besides, you are certainly not getting a better interest rate via a CC than from a car loan, so you need the cash to pay the card off anyway.