Paying for your mortgage each month using one of your reward credit cards might seem like a good idea, but there are many obstacles to get through when considering this approach.

One of the largest obstacles is that many mortgage companies do not allow consumers to use debt to pay off other debt. Although there are some third-party companies who provide this option, the fees associated with the process can be extremely expensive.

Another obstacle is that not all credit card networks such as American Express, Discover, Visa, etc. will even allow you to charge mortgage payments on your account in the first place.

But, if you happen to find a way around these roadblocks, it’s important beforehand to check with all three parties – card network, card issuer, mortgage lender – to ensure your payments will process. Otherwise, you can run the risk of a late or declined mortgage payment.

 

Factors to Consider

Putting your mortgage payment on a credit card can lead to costly interest charges if you’re someone who doesn’t pay your credit card bill off in full every month. In the long-term, the expense of carrying large ongoing balances would easily wipe out any rewards you might end up earning from your credit card payment.

Also, making a mortgage payment with your credit card will likely take up a large amount of your credit limit and increase your total debt compared to your limit. This, of course, has a significant impact on your credit score and is ideally something you’d want to keep low.

So, if you’re planning to make mortgage payments with your credit card, consider requesting a credit limit increase from your issuer to minimize the negative impact on your credit score.

 

Should you pay your mortgage with a credit card?

If you can navigate the waters to make it possible, paying your mortgage with a credit card is an option, assuming the rewards outweigh the fee. As long as it won’t hurt your credit and your budget, it’s worth considering.

But, if you’re already using a large amount of your credit limit, or if your tight on money for bills you need to pay, putting your mortgage on credit isn’t the best idea. It could end up hurting your credit score and end up straining your budget over the long term if you don’t pay your credit card bill off in full.