Can you pay your mortgage by credit card-Advantages and disadvantages?

Prior to the housing market crisis, which took place in 2008, several credit card companies enables cardholders to pay back their mortgage while using their credit cards. Therefore, the majority of creditors have discontinued this. Now you must be thinking now, can you pay your mortgage by credit card? 

People have limited cash flow, so sometimes they choose to pay the mortgage with their credit cards in order to save themselves from bankruptcy or save their houses from foreclosures.

But have you often think what if you didn’t pay back the credit card? Let’s quickly consider the strengths and weaknesses of “can you pay your mortgage by credit card’?

Advantages of “can you pay your mortgage by credit card”?

●    You will earn plenty of rewards points while paying the mortgage by credit card. As it’s a tremendous amount and definitely you will get rewarded.

●    It's a great way to save you from bankruptcy. As if it's an emergency, then a credit card can be your real savior here.

●    It’s a good capability to make payments on the balance.

● Yes, you can definitely protect yourself from late payments and falling your credit scores. 

These all are the potential pros of paying a mortgage by credit card. Despite that, the cons generally, outbalance the advantages!

If you are planning to earn some more credit card rewards while using your credit card to pay off the mortgage, you will perhaps end up paying more on the fees, so it’s not worthwhile. However, you must know that several mortgage lenders are not willing to accept credit card payments.

On the other hand, those lenders who are willing to accept credit card payments will charge a higher fee that is 2-3% for paying down the mortgage by credit card. That means you end up paying a higher fee if you choose to pay by credit card.

It will be ideal for you to consider paying a mortgage loan with a credit card. If you hold some savings in your bank account, try to pay your mortgage by check or by debit card.

Disadvantages of “can you pay your mortgage by credit card”?

●     If you choose to pay your mortgage by credit card, you need to pay a high-interest rate on your payments.

●     Higher APR on funds.

●     Additional fees for making payments.

●     Your credit score might be decreased. 

Usually, we are not in the favor of using a credit card for mortgage payments, but we understand that sometimes it’s hard to evade it. However, there are few options available for you although if your lender denied accepting the credit card payments. Plastiq and Venmo are some of the few companies that provide bill payment benefits. These companies will charge a fee of 2.5%-3%. On the other hand, if you don’t have any other method, you can consider paying with these third-party companies.

Conclusion:-

By making mortgage payments while using a credit card, you are putting yourself in a dangerous situation where you might end up lowering your credit scores. Even a single delay in payment can considerably harm your credit scores.