Four or five years ago, my husband and I were on track to pay off our mortgage in around 15 months. Unfortunately (fortunately?), Greg had a career crisis that led to us moving to a different town and starting the entire mortgage process over.
It was no big deal because I was happy to support my husband and get a new start in a new town. Also, unbeknownst to us, our new home and neighborhood turned out to be more than we could have imagined and perfect for our lifestyle. While we only moved 40 minutes away from my hometown, I feel like I’m on another, better planet sometimes.
Years later, we still have the home we love in the perfect area…but we also achieved a pretty big goal. Although we bought this home in 2014 with a big down payment and a 15-year mortgage, I just made the final payment! And now, we’re finally 100 percent debt-free (other than one rental property mortgage that is covered by renters).
I should probably be more excited than I am — but, to be honest, the entire ordeal has been pretty anticlimactic. We didn’t have a mortgage burning party, and I’m pretty sure my parents are the only people who give a hoot.
Still, I’m proud — we are finally debt-free and will never get into debt again.
So, here’s my “debt-free scream” if you want it…
Why Did We Pay Off Our Mortgage?
With interest rates as low as they’ve been, you’re probably wondering why we paid off our home early. The answer is simple: We think debt is a curse.
To us, debt is nothing more than a ball and chain that shackles you to your responsibilities. When you’re in debt, you have to work hard to service those debts at the expense of your own desires and needs.
We paid off our home for the same reason we don’t have car payments. Even when money is “cheap” (i.e. you can get a new car loan for 0% APR), we prefer to make our lives as easy as possible. We also prefer to have as many options as possible, and life without debt is one where nearly any option is within reach.
If you’re worried about the math, don’t be. Our mortgage was at 3.75% APR, so we achieved a similar “return” on our money by avoiding interest payments for the rest of our lives. We also used “extra” money to pay off our home loan — we only paid off our mortgage because we max out our Solo 401(k) accounts and also invest in real estate.
Now that we’re debt-free, you may be wondering how our lives will change. The thing is, we don’t plan to do anything differently or alter our lifestyle in any way. We plan to stay here in our home forever and continue traveling the world. We’ll just have more money to save and invest every year.
We Earned $2,000 in Travel Rewards Paying Off Our Mortgage
Now, to the fun part. While paying off our home will save us money in the long run, we also earned around $2,000 in travel rewards in the process. We did this by paying off our home loan using Plastiq.com and the “fee-free dollars” you get when you refer people to the service.
In case you’ve never heard of it, Plastiq is a third-party payment system that lets you pay certain bills with a credit card. Many people use it to pay their mortgage or rent payments because these bills are typically hard to pay with credit, but you can use the service to pay any bill you want.
By paying bills like rent or your mortgage with a credit card, you can earn cash-back and travel rewards for each dollar you spend. But, there’s a catch; for normal transactions, Plastiq charges 2.5 percent. So, for every $1,000 in mortgage payments you make, there’s a $25 fee.
Fortunately, there’s a workaround. Plastiq offers $1,000 in “fee-free dollars” for every person you refer to the system who makes a $500 payment within a specific length of time. Referring people is how I was able to pay off my mortgage and earn $2,000 in travel rewards in the process.
As you can see, my lifetime earnings with Plastiq are equal to $227,000 in fee-free dollars. I earned that amount by referring 227 people to Plastiq.com. Over the past year, I’ve used Plastiq to pay around $113,000 in mortgage payments on my primary residence and on one of our rental properties. These payments were free for me because I used the fee-free dollars I earned through referrals.
I could theoretically pay other bills with this service, but I’m lazy and mortgage payments are so easy. Now that my house is paid off, I’ll continue to use the service to pay off the remaining mortgage I have on one of our rental properties. Our renters cover the expense, but I’ll just funnel their rent money through Plastiq.com to rack up rewards.
Keep in mind that the card you use with this service makes a difference when it comes to the rewards you earn as well. I used my Barclaycard Arrival Plus World Elite MasterCard to pay my mortgage off through Plastiq, mostly because it offers 2x points for each dollar you spend.
The points you earn with this credit card function as “flexible travel credit” you can use to cover any travel expenses like a hotel stay or airfare. While I had several different travel expenses coming up this could work for, I used my points to pay for the bulk of our Mediterranean cruise to Greece, Italy, Croatia, and Albania this summer.
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How to Use Plastiq.com to Pay Your Own Bills
Maybe you’re wondering if you should use Plastiq.com to pay your bills and rack up more rewards. The answer may be “yes,” but it’s important to remember that you do have to pay a 2.5% fee.
This fee equals out to $25 per $1,000 in bills you pay for the service, so it wouldn’t make sense to do this most of the time. Really, it only makes sense to use Plastiq.com to meet a minimum spending requirement so you can score a big signup bonus.
For example, let’s say you sign up for a new credit card that offers $500 in travel after you spend $4,000 in three months. If you used Plastiq.com to pay your mortgage for a few months so you could hit the $4,000 minimum spending requirement, you would pay $100 ($25 per $1,000) to use Plastiq but earn $500 in travel in return. Generally speaking, that’s a good deal.
Also remember that you can sign up for Plastiq.com and refer your friends to earn your own fee-free dollars. I have referred 227 people so far but it has taken me more than a year. Even if you don’t refer that many, every person you do refer is good for $1,000 in fee-free payments and some free rewards.
The Bottom Line
Now that my mortgage is dead and gone, I’m pretty excited about our future. We’re still in our 30’s, but we are planning a very early retirement. Having no mortgage is a big part of that plan.
No mortgage means having more freedom and more options when it comes to living life on our own terms. Earning travel rewards along the way was just icing on the cake.
Have you ever been able to pay your mortgage with a credit card? Are you paying your mortgage off early? Why or why not?