If you are like me, you like to use your credit card as much as possible to get as many rewards as possible and then pay it off every month. If you are a new homebuyer, you might be looking for additional ways to earn some extra rewards on your credit card, and it seems like your monthly mortgage payment would be the ideal way to acquire those extra rewards points. Before you decide to use your credit card to pay your mortgage or rent, it is important to keep a couple things in mind.
If you rent, you may be able to find a landlord or apartment complex that is willing to accept a credit card without any additional fee. This is fairly rare, so you should definitely take advantage of this option if you can use your credit card to pay your mortgage without any fee. With rewards points, you may be able to earn several hundred dollars every year just by paying your rent with a credit card.
You may be able to use a third-party source like Venmo or Plastiq to pay your rent or your mortgage with some fees associated with it. You should carefully consider if the advantages associated with using your credit card to pay your mortgage outweigh the fees you will receive from using your card. Often times, you will receive the greatest benefits from using your credit card to pay your mortgage even with fees if you are trying to meet credit card spending requirements, as in the case of getting a new card.
Finally, remember that it is often true that using a credit card to pay your mortgage if there are fees associated with it is likely not going to benefit you. You may increase your credit utilization ratio, which should stay below 30 percent. This could negatively impact your credit score. Additionally, if you use a third-party source, you may have to deal with your landlord or bank getting the payment late which can result in even more fees. Just the fees associated with using your credit card to pay your mortgage might be too high.
In conclusion, if you happen to live in a place where credit cards are accepted without additional fees, you should use a credit card to pay your mortgage or rent. If you do not, however, you should carefully consider the rewards you would receive and the fees associated with using a credit card usage to see if it would be financially advantageous.