If you’re into earning points and miles, you’ve probably wondered if it’s possible to pay for big ticket items with a credit card. You know, the big stuff – your mortgage, daycare, and car payment. Fortunately, it is possible and there are several ways to get the job done with minimal hassle and expense.
While the process itself is easy, there’s a lot of strategy that goes into earning your points and miles. Getting the most out of them takes knowledge and planning. But tread carefully. Playing the credit card rewards game can be dangerous if you don’t do it right. If you think you can handle it, keep on reading…
Why Pay Your Mortgage With a Credit Card?
The whole point of paying your mortgage with a credit card is to earn additional rewards points that you’ll redeem to make expensive things cheaper (even free!). You can use these points to fly for free to places like Europe, the Caribbean, and even China! If you don’t want to travel, you can use them to receive “cash back.” You can even earn hotel points to earn free stays. While this method works with any rewards card, the real pot of gold is the elusive credit card sign-up bonus. Generally speaking, you should only use this method to meet spending requirements for sign-up bonuses.
What About Debt?
We all know that debt blows goats. Its sucks. And both mortgages and credit cards are types of debt, right? Why the hell would we even want to mess with this stuff? Aren’t we just kicking the can down the road…and paying extra for that can besides?
Of course we aren’t, silly! Every time you use a credit card to pay your mortgage, you are going to be paying it off – with cash – in full…at least once a month. (More on that in a minute!)
If our master plan is going to work, you can’t start accumulating more debt! Owing money is completely restrictive. It ties you down, forces you to work longer and harder than you have to, and hampers your ability to do the things that you really want to do with your life. Your goal is to use this method to gain more freedom, not less. You want to make the bank’s own scheme work for you, not them.
Use the card. Gain the points. Pay it off. Get free stuff.
Spectacular, isn’t it!?!
What is a Sign-Up Bonus?
Let’s start with how a basic rewards card works. Typically, you earn points for spending money on your credit card. For instance, every dollar you spend on a card may earn you 2 points. You can redeem these points for flights, gift cards, hotels, or other merchandise. Not bad, right?
Although earning these types of points is a nice perk, the Holy Grail of rewards points is landing the ginormous sign-up bonuses that are periodically offered by the credit cared companies. Most of these companies will give you oodles of points just to sign up for their card. (Amazing, right?) In fact, it isn’t unheard of for cards to offer upwards of 50,000 bonus points just for enrolling in the program.
Usually, you have to earn these bonuses by spending a specified amount of money on the card within a stated period of time. For instance, you may need to spend $3,000 on the card within 90 days to qualify for the sign-up bonus. That is where paying for big ticket items, like your mortgage, comes in.
What Credit Card Should I Get?
With so many different credit cards on the market, it can be overwhelming to choose. For starters, you need to set a clear goal about how you want to use your rewards. Credit cards that provide cash back are good options because they’re so versatile. Who doesn’t love free money, right?
However, travel rewards are where you get the best bang for your buck. If you travel often or want to save for a specific trip, it’s important to select the best card (or cards) to make those travel plans happen…and happen cheaply.
With oodles of different airlines and hotel chains across the world, getting the most from your travel points takes a little time and effort. Keeping all of the offers straight can get confusing. You definitely want to create a travel plan ahead of time so you know exactly which cards will be most beneficial. Try making a spreadsheet to keep track of all of it.
Still not sure which cards to get? We offer a free service to help you choose the right cards for your travels. Just let us know where you want to go, and we’ll help you find the cards and deals that best fit your plans. Click Here to Get Your Free Travel Rewards Plan!
Rules for Paying Your Mortgage With a Credit Card
Of course, the credit card company isn’t giving you a sign-up bonus just to be nice. They want to make some money off of you. With the sign-up bonus, they are hoping to whet your appetite just enough so you’ll continue spending on the card. You need to understand that, while the credit card companies make money every time you swipe your card, the real money is made when you carry a balance. They want to suck you in and get you addicted to their drug, so they offer you this fancy free gift to get you to take your first sniff. Always remember, you want to use these rewards to create more freedom for yourself, not less. As such, your job is to avoid falling for their trap at all costs. If you don’t think you can handle it, DO NOT play the game.
In order to get the most out of your rewards points, you need to make sure to follow 2 simple rules:
- You Can Never, Ever Pay Interest…Ever – Was that clear enough? By using a credit card to pay your mortgage, you are attempting to earn points that will help make the things you want cheaper. Paying interest on your purchases is not helping the cause. By carrying a balance and paying interest, you pretty much defeat the entire purpose of chasing points. Besides that, your mortgage payment already has interest wrapped into it. By carrying a balance, you’ll paying off your mortgage interest using a credit card loan that is probably charging you a much higher interest rate. Now you’ve created a giant shitstorm that is going to restrict your lifestyle rather than improve it. Your goal is to get free stuff through working the system, not paying more for the stuff you already have.
- Don’t Buy More Than You Would Without the Card – Spending money on crap that you wouldn’t normally buy just to hit a spending limit is pretty much the definition of stupidity. For example, if you spend an extra $500 on a bedding set you weren’t planning on buying just to meet your spending requirement, you haven’t saved yourself any money on that $500 hotel room stay, have you? Use the card to pay for stuff you’d normally buy. Don’t use it as an excuse to overspend. Again, we are trying to get stuff for free, not buy more junk that we don’t need.
How to Use Your Credit Card to Pay Your Mortgage
Now that we know what not to do, let’s take a look at how to do this properly. The steps are simple, just make sure you follow them!
- Choose the rewards card (or cards) that offers the best sign-up bonus and fits your goals
- Wait for the über huge sign-up bonus to be offered (you can ask us if you are getting the best deal available by clicking here)
- Decide which payment option works best for you (payment options are covered in detail below)
- Use your rewards credit card to pay your mortgage (or health insurance premium, car payment, etc.)
- Pay your credit card off in-full at least once a month
Ta-da! There you have it. Not too difficult is it?
Personally, I like to pay my credit cards off more than once a month, just to make sure that I don’t carry any sort of balance. I absolutely abhor owing money, especially on a credit card. Regardless, just make sure that its paid before interest is due.
5 Options to Pay Your Mortgage With a Credit Card
So, we’ve considered why you would want to pay your mortgage with a credit card. We’ve talked about the value of sign-up bonuses. We’ve even talked about credit card rewards best practices. Still, most mortgage companies don’t offer you the option of making payments via a credit card. Alas my frugal friends, we have to get a bit creative. Here are 5 options that you can use to earn those gigantic sign-up bonuses through paying your mortgage with a credit card.
1) American Express Bluebird
For us, the American Express Bluebird card is still the best way to pay your mortgage with a credit card. Since the Target Prepaid REDCard is no longer an option, the Bluebird quickly became many people’s go-to method.
Unfortunately, Bluebird is not as reliable as it once was. Over the past several months, many Bluebird users have had their accounts shut down. Our hunch is that many people were using it as a way to create manufactured spending and have gotten caught. We’ve always used it in a limited capacity to pay legitimate bills – things like our health insurance, mortgage, and day care. To this point, our Bluebird account works just fine.
So, yes, Bluebird still works. Yes, it is still our preferred way to meet minimum spending requirements. In our experience, if you use it for legitimate expenses, you’ll be just fine.
What is a Bluebird Account?
An AMEX Bluebird account is an online checking account that allows you to pay any of your bills using their online payment system. It’s free to use, and you can load your account at Walmart.
To take earn sign-up bonuses, you have to find a way to load money into your account in a way that utilizes your credit card. You are allowed to load up to $5,000 a month onto the card. However, you are only allowed to load $1,000 per day into your Bluebird account. After opening your account, you should receive your shiny Bluebird card by mail in about two weeks.
Creating a Bluebird Account
There are three steps to paying your mortgage using a Bluebird account: 1) Opening a Bluebird account. 2) Loading the account. 3) Paying your bills. Here’s how you sign up:
- Head to Bluebird.com and click on the Login button (Marked by the Red Arrow)
- Click on “Create an Account” (Red Arrow)
- Fill out the registration form
Easy peasy, amiright?
Loading Your Bluebird Account
Now, all you need to do is find a way to feed your Bluebird while incurring as minimal costs as possible.
The easiest way to load your bird is with PIN-enabled Visa gift cards (see below). In my neck of the woods, you can buy them at Kroger for a cost of $4.95 and load up to $500 on each one. After that, you can use them to load your Bluebird at the friendly Walmart Money Center kiosk. You can also do it at a register…if you find a cashier who has been trained on how to do it…and you feel like standing in line at one of the 4 out of 25 registers that are actually open. If your Walmart does not allow this, try using the Walmart Money Center.
Fun Fact: My local Walmart can be similar to the seventh layer of hell on certain days, and I would rather cut off my own boob than pursue this strategy on a regular basis. However, the Walmart Money Center kiosk is a peaceful oasis that sits away from all the drama. If you have one of these ATMs at your disposal, be grateful for it. Just be sure that you don’t try to put more than $1,000 a day on your card. You can jam up the machine and be forced back into the pits of Hades.
Once you load your Bluebird with the gift cards you’ve purchased, simply direct American Express Bluebird to pay your mortgage bill like you would with any other type of online checking account.
The Visa Pin-Enabled Gift Card
To be clear, you can not use any ‘ol gift card to load your Bluebird. It must be a pin-activated gift card that works like a debit card. If your gift card does not say “Debit” on the front, it will not work. Capiche?
There’s also been some confusion about what is allowed and what is not. Here are a few things to keep in mind:
- Debit card loads are restricted to $1,000/day and $5,000/month.
- Online debit loads are only available to those who connected their bank account to Bluebird prior to October 28, 2015. You can not load pin-enabled gift cards online.
- Do not refer to your pin-enabled gift card as a “gift card” or flash them around at the Money Center. Always say “debit” card.
Tips for Loading Your Bluebird at the Register
If you have the option, try to use the Walmart Money Center Express ATM. It is much more convenient and there are no questions asked. Again, only load $1,000 a day or you’ll jam it up!
Of course, sometimes the ATM is not available. Don’t panic. You can still use the register or the Money Center. Here are a few things to keep in mind when doing so:
- Make this easy on yourself and keep it on the DL. Don’t ask permission from the cashiers or flash your cards around asking if it’s OK. You aren’t doing anything wrong, but some Walmarts are a bit of a stickler on the gift card/debit card issue. Keep your cards in your hand as you can complete the process using the customer credit card reader.
- If you find a cashier who doesn’t know how to load your card, help them through the process. Simply tell them to type in “70” and press “action code.” You can swipe your card when the screen says “Enter Account.” Remember, you are loading a debit card, not a gift card!
- Some Walmart stores no longer allow you to load your Bluebird at the register and may request you use the Money Center instead. The Money Center is fine if you have no other options, but we like to avoid this hassle if possible. Again, we highly suggest that you use the Walmart Money Center Express ATM machine if one is available.
- Finally, don’t get greedy. There are a ton of reports from people who have gotten their Bluebird accounts shut down because they were scamming the system. Our best guess is that they were using a technique called manufactured spending. (For those who don’t know, that involves buying thousands in gift cards, loading them to a Bluebird account, then using Bluebird to pay back the credit card balance.) Just don’t! Bluebird is a great way to pay real bills. Use it to pay your mortgage, auto loans, utilities – anything that is a real. If not, don’t be surprised if your account is suspended.
2) Money Orders
If you’re able to buy PIN-enabled gift cards in your area, you can also use them to buy money orders, provided you can find a store that will allow it. My local Kroger couldn’t care less how you pay for money orders, but CVS is kinda a stickler. My advice: Take your PIN-enabled gift card anywhere money orders are sold and see what you can (discreetly) get away with.
If your mortgage is with a big bank like Chase, you can simply take your money orders into the bank and pay your mortgage in person. If you need to mail your money orders in, make sure to save your money order tracking numbers!
Plastiq is a relative newcomer to the scene. This website allows you to pay any type of bill with a credit card. Simply create a free account, connect your favorite credit card, and direct them who to pay. Plastiq will then send the money via paper check or bank transfer before the due date.
Frankly, this is a great way to pay big ticket items like your mortgage, student loans, and more…but only when you’re trying to meet minimum spending requirements and don’t have access to Bluebird. Plastiq charges a fee of up to 2.5% on each transaction. So, if you’re trying to meet the $4,000 spend on a Chase Sapphire Preferred® Card, you’ll end up spending $100 in fees. That might seem like a lot, but the 50,000 point signup bonus is worth $500 in gift cards or $625 in travel through the Chase portal. So, even with the fees, you definitely come out ahead.
Again, only use this method to meet minimum spending requirements.
Formerly known as ChargeSmart, Tio is an online service that helps people pay their bills, including their mortgage, with a credit card. Like Plastiq, this is more expensive than Bluebird, but it’s also the more convenient. There’s no gift cards to find and no loading accounts. Just use your credit card to pay the bill directly.
Fees vary for the service, but paying a $1,000 mortgage will cost you approximately 2.85% – which, in this case, works out to an additional $28.50 to help you earn all of your points. On a $500 cash-back bonus, you would net $471.50 – which is still a pretty good deal.
Enrolling with Tio is easy. In fact, they don’t even require you to register. Simply, head to their bill payment page, fill in the information, and you’re done. They’ll take care of the rest.
In my opinion, you should only pursue it if you don’t have access to the Bluebird systems…or you just don’t want to drag your ass to Walmart. Seriously, we don’t blame you and we definitely don’t judge!
Like Plastiq and Tio, RadPad is a website that makes paying with a card super simple and convenient. The site bills itself as a way to pay your landlord, but it works for mortgages too. They also market directly to points chasers, making sure you know that you do earn credit card points for using their system.
At RadPad, you’ll schedule your “rent” payment in just 60 seconds. Connect your favorite credit card, and they’ll send out a paper check 3 days before the rent is due. You can track the entire process, and you’ll receive a notification once the check is deposited.
Like with the others, RadPad is great for meeting minimum spending requirements but not for making regular monthly payments. They charge a flat 3.49% fee for using a credit card. So, on a$4,000 spend for a credit card bonus, that equals about 140 bucks. Again, you come out way ahead…provided you only use it to help meet minimum spending requirements.
Will Chasing Credit Card Rewards Ruin My Credit?
That is a great question! In fact, it is such a great question that we have written an entire article about it. If you want to know the effect of credit card rewards on your credit score, simply follow the link to read more!
Is It Worth It?
Before you start using any of these methods, it’s important to ask yourself if it even makes sense. In other words, are the points and miles you’re trying to earn worth more than the fees you’re paying? To me, it’s usually only worth it if I’m earning a sign-up bonus and only in an emergency.
For most people, spending money on gift cards, paying a percentage of your total, and taking the time to chase all of this down just doesn’t make sense in the grand scheme of things. These are your options, but you should only use them when you have a lot to gain.
Don’t forget, we are here to help you keep all of this rewards business straight. If you’d like to receive alerts about rewards points, you can always sign up for our VIP Club Newsletter. We like to send out special email alerts when some of our favorite credit cards are offering their best sign-up bonuses, but we can’t get them to you if we don’t have your info. If you have a trip in mind and want us to help you with a FREE personalized travel rewards plan, head over to our travel coaching page right away!