Separately, I posted How to Earn Rewards by Paying Rent. There aren’t as many ways to earn rewards from paying your mortgage, but it is still possible. Here’s a primer on the best ways to earn rewards from paying mortgage…
Pay Mortgage with a Credit Card via Plastiq
Plastiq is a bill payment service that allows paying many types of bills with a credit card for a fee (currently 2.35% for the Brex Card and 2.85% for all other cards). Unfortunately, only Mastercard and Discover credit cards can be used to pay your mortgage. Worse, both Capital One and US Bank ban the use of their Mastercards to pay mortgage. For all other Mastercard and Discover cards, though, you can use Plastiq to pay your mortgage and you will earn rewards as if it was a regular purchase — you will not incur cash advance fees.
More details about Plastiq can be found here: Complete guide to Plastiq credit card payments.
Earn rewards through welcome bonuses
Many banks offer huge bonuses when you sign up for a new card and meet the minimum spend requirements. For example, it’s common to see an offer for 60,000 points or more after $4,000 spend in 3 months. With these big welcome bonuses, it can be well worth paying Plastiq’s 2.85% fee in order to meet the minimum spend requirements by paying your mortgage via credit card.
The following list shows the best current welcome bonuses based on our estimate of first year value and limited to cards that (to the best of our knowledge) can be used to pay mortgage through Plastiq. First year value estimates include the value of points or other rewards earned minus the first year annual fee and minus the “cost” of the minimum spend (for various reasons, we assume a 3% cost, which is very close to Plastiq’s 2.85% fee). As you can see, rewards earned from welcome bonuses can be huge:
Card Offer and Review |
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Brex Cash Up to 110K Points 30K points after $3.5K spend, or 80K points after $9K spend within 30 days. Plus 10K after $3K spend in 3 months and 20K when you connect payroll to Brex. No Annual Fee FM Mini Review: If you have a qualifying business, it's a no-brainer to sign up for this fee-free account. |
JetBlue Business Card Recent better offer: Expired 2/4/21: 100K after $6K spend FM Mini Review: This card is almost identical to the JetBlue Plus card except that this one earns 2X at office supply stores rather than grocery stores. Both cards are great choices for JetBlue flyers. |
The Aeroplan® Card 50K Reward Certificate + 10x Travel & Dining One 50K Reward Certificate after $3K spend in 3 months + 10x travel and dining for the first 6 months up to 51,000 points. Note that reward certificate never expires as long as your card remains open and can be topped off with points to redeem for a single ticket. $95 Annual Fee FM Mini Review: Great card for regular or frequent Air Canada flyers |
AAdvantage® AviatorTM Business MasterCard® Recent better offer: This is the best offer we've seen for this card. |
Air France KLM World Elite Mastercard 70K miles + 100XP points 70K miles + 40XP after $2K in the first 90 days + 60XP points upon approval $89 Annual Fee Alternate offer: Going through the steps to make a dummy booking at the Air France website may result in an offer that also includes a $100 statement credit. |
CitiBusiness AAdvantage Platinum Select World MasterCard Recent better offer: 75K after $5K in the first 5 months (Expired 1/16/20) FM Mini Review: This card usually has a great signup bonus, but if you're looking for a card to keep long term, you'll find better options. |
Virgin Atlantic World Elite Mastercard Up to 65K miles Up to 65K miles: 60K after $2K spend in first 90 days plus 5K after adding 2 authorized users $90 Annual Fee |
Citi® / AAdvantage® Platinum Select® World Elite MasterCard FM Mini Review: Excellent choice for a great signup bonus. Plus it offers the usual collection of perks for flying AA (free checked bag, priority boarding, etc.) |
Citi Premier Card Recent better offer: Expired Feb 2022: 80K after $4K spend in first 3 months FM Mini Review: Very strong earnings for spend. Excellent bonus categories. Points transferable to select airlines. Recommend pairing this card with Citi Double Cash and Citi Rewards+. Sadly, this travel card doesn't provide any travel protections. |
Chase IHG® Rewards Premier Credit Card This card is subject to Chase's 5/24 rule (click here for details). Recent better offer: 125K + free night certificate [Expired 3/22] |
Chase IHG® Rewards Traveler Credit Card FM Mini Review: This would be a great companion card for anyone who still has the old $49 per year IHG card because the 4th night free from the card would stack with the 10% rebate with the other card. |
Barclays JetBlue Plus Mastercard Alternate offer: You could get a bonus 5K miles for using an employee code. Details here. Recent better offer: Expired 2/4/21: 100K after $6K spend FM Mini Review: Frequent JetBlue travelers should seriously consider this card for its terrific perks. The combination of the 10% rebate on awards and the annual 5,000 point bonus make this card a keeper. |
Chase Freedom Flex 20K points + 5X gas + 15 months 0% APR Earn 20,000 points (worth $200 cash back) after spending $500 in the first 3 months + 5x Ultimate Rewards points (worth 5% cash back) on gas purchases for 1st year (on up to $6K in purchases). 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 15.24% - 23.99%. No Annual Fee Be sure to select the card you want after clicking through. This card is subject to Chase's 5/24 rule (click here for details). Even though this card is marketed as a cash back card, it actually earns Ultimate Rewards points which are redeemable for 1 cent each, or can be combined with other Ultimate Rewards-earning cards to get even more value. This product is available to you if you do not have this card and have not received a new cardmember bonus for this card in the past 24 months. Recent better offer: 20K points + 5x grocery stores for the first year on up to $12K in qualifying purchases FM Mini Review: Great for 5X and 3x categories and World Mastercard benefits. Excellent companion card to Sapphire Reserve, Sapphire Preferred, or Ink Business Preferred. |
The Hawaiian Airlines® Business MasterCard® issued by Barclays |
AAdvantage Aviator Red World Elite MasterCard |
Lufthansa Miles & More® Premier World MasterCard® issued by Barclays Up to 75K miles Up to 75K miles: 50K after $3K spend in 90 days + 25K miles after $20K spend in first year $89 Annual Fee Recent better offer: None. This is the best we've seen. |
Frontier Airlines World MasterCard® Up to 60K miles Up to 60K miles: 40K after $500 spend in 90 days plus 20K after $2K in the first 6 months. No Annual Fee First Year, Then $79 |
Sonesta World Mastercard 65K points 60K points after $1K spend in 90 days plus 5K points for adding an authorized user No Annual Fee First Year, Then $75 FM Mini Review: Best for those who stay often at Sonesta hotels |
Business Advantage Unlimited Cash Rewards credit card |
The Hawaiian Airlines® World Elite MasterCard® issued by Barclays |
Ridgewood Savings Bank World Mastercard FM Mini Review: This card offers a nice intro bonus. Earning an effective 3% on travel and dining isn't bad, but considering the annual fee in future years it isn't very compelling to keep this one. Note that they have a nearly-identical business card. |
Bank of America Business Advantage Cash Rewards Mastercard Recent better offer: $750 after $5K spend in 90 days [Expired 9/1/21] |
HSBC Premier World Mastercard® credit card FM Mini Review: This card may be worth it for the welcome bonus and possibly for the annual rideshare benefit if you have an HSBC Premier checking account and can thus keep the card annual fee-free. Note that the points value is based on HSBC's stated value when redeemed for airfare via the HSBC portal. |
Best Western Rewards Premium MasterCard issued by First Bankcard |
Citi Custom Cash Card Recent better offer: None FM Mini Review: This is a great card to have and hold for a single category where you spend no more than $500 per month as it represents an excellent return without rotating categories to track. |
Citi Rewards+ Card FM Mini Review: 10% points rebate (up to 10K rebate per year) make this a great choice to pool with ThankYou Premier, Prestige, and/or Double Cash |
New Orleans Pelicans Credit Card FM Mini Review: Points are worth $0.01 each toward a statement credit or 1.25c toward Fanatics gift cards, so this card could be a good deal for its bonus categories. |
Liverpool FC Credit Card FM Mini Review: Points are worth $0.01 each, so the welcome bonus and ongoing rewards in bonus categories are respectable for a card with no annual fee. |
Manchester United Credit Card Recent better offer: 50K points were briefly available at launch FM Mini Review: Points are worth $0.01 each, so the welcome bonus and ongoing rewards in bonus categories are respectable for a card with no annual fee. |
Cleveland Cavaliers Credit Card Recent better offer: 100K points were briefly available at launch FM Mini Review: Points are worth $0.01 each, so the welcome bonus and ongoing rewards in bonus categories are respectable for a card with no annual fee. |
JetBlue Card Recent better offer: 9/2017: 15K after $1K spend FM Mini Review: Not bad for a fee-free airline card. |
Norwegian Cruise Line® World Mastercard® FM Mini Review: Points are worth $0.01 each toward onboard credit or cruise purchase with Norwegian. Note that points expire 5 years after they are earned regardless of activity. This card offers very poor value for ongoing spend after meeting the welcome bonus requirements. Interestingly, it appears to be eligible for Bank of America Preferred Rewards, which would increase the bonus categories by as much as 75% for those with Bank of America's top-tier Platinum Honors. |
Miami Marlins Credit Card FM Mini Review: Points are worth $0.01 each toward a statement credit or 1.25c toward gift cards for Marlins gear, so this card could be a good deal for a Marlins fan. That is particularly true if you value some of the unique experiences offered by Home Run Rewards. |
Citi AAdvantage® Executive World Elite MasterCard® Recent better offer: 75K after $7.5K spend in 3 months FM Mini Review: Excellent choice for those who need Admirals Club access (included for both the primary member and authorized users). Heavy spenders who are short of the miles necessary for status can earn 10K elite qualifying miles with $40K spend. Plus, it offers the usual collection of perks for flying AA (free checked bag, priority boarding, etc.). |
American Airlines AAdvantage MileUp Card FM Mini Review: Not bad for grocery spend if you highly value AA miles |
ABOC Platinum Rewards FM Mini Review: A decent no-fee rotating category card with a respectable if not large welcome bonus. |
Upromise World MasterCard® issued by Barclays FM Mini Review: This card could be decent for an easy cash back bonus, but there are much more rewarding options for ongoing everyday spend. |
AT&T Access Card FM Mini Review: This card may be worth it for a welcome bonus, but it would be worth considering a product change to the Double Cash down the road..Unforunately, it seems it is no longer possible to product change to the AT&T Access More card. |
Discover it® for Students $50 + First Year Double + $20/year Get $50 after first purchase. All cashback earned in first 12 months will be doubled including 5% earned in rotating categories. Plus, get $20 cash back each school year your GPA is 3.0 or higher for up to the next 5 years. No Annual Fee FM Mini Review: In my opinion this is the single best "starter card" for students. It offers great rewards and no annual fee. |
Virgin Atlantic White Card |
Discover it Miles - Double Miles your first year $100 + First Year Double Get $100 after first purchase. All "miles" earned in first 12 months will be doubled. This makes this a 3% cash back card for the first year. No Annual Fee FM Mini Review: Great card to get for its first year 3% cash back. |
The Comenity® Mastercard® Credit Card FM Mini Review: Possibly worthwhile for a low-spender looking for an easily-attainable welcome bonus. |
Allegiant World Mastercard® Credit Card Alternate offer: You may be targeted for an offer including a $100 statement credit during a dummy booking. FM Mini Review: Points are worth $0.01 each toward airfare and do not expire unless you cancel the card. If you cancel the card, you forfeit all points. Between that policy and the annual fee, this card probably isn't worth it in most scenarios. |
Discover it® $50 + First Year Double Get $50 after first purchase. All cashback earned in first 12 months will be doubled including 5% earned in rotating categories. No Annual Fee FM Mini Review: This is a great choice for its rotating 5% categories |
Marvel MasterCard from Synchrony FM Mini Review: Good option if used only in 3% categories (e.g. dining and entertainment) |
HSBC Premier World Elite Mastercard® credit card FM Mini Review: Points are worth 1.5c each when redeemed for airfare through the HSBC portal. Could be worthwhile for a welcome bonus, but not rewarding enough to justify keeping beyond the first year. |
SoFi Credit Card FM Mini Review: This card could be a good option for someone looking for a 2% cash back Mastercard, though keep in mind that the Citi DoubleCash is a competitor that earns at the same rate while offering points which could become transferable to airline partners, whereas the SoFi credit card only earns cash back rewards. |
Amtrak Guest Rewards Platinum Mastercard Recent better offer: 20K after $1K spend |
Citizens Bank Cash Back Plus® World Mastercard® Offer Expired Previous Offer: 10% back on groceries, restaurants, and food delivery (on up to $500 in purchases each month) until 5/5/21 No Annual Fee FM Mini Review: This card isn't ordinarily worth a look with only 1.8% cash back. However, if you're able to take advantage of 10% back on $500 per month in groceries, restaurant, and takeout it could certainly be worth it in the shoter-term. |
Barclaycard Arrival Plus® World Elite Mastercard® Recent better offer: None. This is the best we've seen. |
SEFCU Lightning Credit Card® FM Mini Review: The terms note that you will "* Earn 5x points on online purchases through January 31, 2021 and 3x points on first $1,250 of grocery purchases per quarter. " YMMV as to whether the 5x online category is capped at $1250. If it is indeed capped, this card wouldn't make much sense given its lack of a welcome bonus. |
Huntington Voice FM Mini Review: With most of this card's category bonuses, you can do better with other cards. If you do find a useful category and max out the $2K spend each quarter, you'll come out only $80 ahead per year compared to using a 2% cash back card. |
Barclays Arrival™ World MasterCard® |
Discover it Business - Double cash back your first year First Year Double All cash back earned in first 12 months will be doubled. This makes this a 3% cash back card for the first year. No Annual Fee FM Mini Review: Great card to get for its first year 3% cash back. |
Citi ThankYou Preferred Card FM Mini Review: Downgrade from Prestige or Premier to this card in order to keep points alive |
Citi Rewards+ Student Card FM Mini Review: 10% points rebate (up to 10K rebate per year) make this a great choice to pool with ThankYou Premier, Prestige, and/or Double Cash |
Citi® AAdvantage® Gold MasterCard® FM Mini Review: This card hardly seems worth the $50 annual fee |
Citi Double Cash Card FM Mini Review: 2X rewards for all spend with no annual fee makes this card a winner. Earn 2X everywhere and redeem for the equivalent of 2% cash back or 2X ThankYou points. Pair with the Premier or Prestige card to make points transferrable to airlines. |
Santander® Ultimate Cash Back® credit card FM Mini Review: While the headline is 3% back for a year, the bonus itself is an extra 1.5% back on up to $20K in purchases for the first year. That's certainly not a bad return on otherwise unbonused spend, but many other cards on the market that offer even moderately good welcome bonuses offer greater net return with significantly less spend. |
Bilt Mastercard None This card features no welcome bonus, but it offers the chance to earn 1x points when paying rent (on up to $50K per year in rent payments) with no annual fee. No Annual Fee FM Mini Review: If you pay rent and haven't been earning rewards, this card is a no-brainer as you can pay your rent and earn rewards with no fee. A surprisingly good set of transfer partners makes the rewards for using this for rent worth getting the card for that main purpose alone (as long as you remember to use the card 5 times per month). |
JAL USA CARD 10K miles 10K miles after $5K spend in first 3 billing cycles with promo code SPG2020 $70 Annual Fee FM Mini Review: This card offers a poor earning structure of just 1 mile per dollar and a very weak bonus compared to required spend that it just isn't worth it. |
Chase IHG® Rewards Club Select Credit Card Click here to view details about a similar card: IHG Rewards Club Premier Recent better offer: 85K + $50: 80K after $1K spend in 3 months + 5K for adding authorized user + $50 statement credit after first purchase FM Mini Review: Those free night certificates issued before 5/1/18 are redeemable at any IHG property, but those issued after 5/1/18 are restricted to properties up to 40K per night. For only $49 per year, this still a good card to keep, but not to use for spend |
Amtrak Guest Rewards World Mastercard Recent better offer: 50K + $100 statement credit after $2,500 spend |
AT&T Access More Card FM Mini Review: Excellent choice for those who shop often online (thanks to 3X earnings) |
Barclays Arrival® Premier World Elite Mastercard® FM Mini Review: This card is best for earning JAL miles, which can be very valuable. If you spend exactly $15K or $25K per year, you can earn an effective 1.76 Japan Airlines miles per dollar or 2.14 miles per dollar with other transfer partners. Points can alternatively be redeemed for 1 cent each towards travel. |
AAdvantage® AviatorTM Silver World Elite MasterCard® FM Mini Review: $25 per day of in-flight food & beverage credits is pretty interesting. If you fly AA enough to make good use of this, this card is well worthwhile. |
Citi ThankYou Prestige Card Recent better offer: 75K after $7.5K spend in 3 months FM Mini Review: The Prestige card's best in class 5X rewards for dining, airfare, and travel agencies is hard to beat. Sadly, this travel card doesn't provide any travel protections. |
Earn spend bonuses: elite status, free nights, etc.
Many credit cards offer bonuses for meeting high spend thresholds. You can find a comprehensive list here: Best big spend bonuses. Whether or not it makes sense paying Plastiq’s fee in order to reach these thresholds depends upon how much you value elite status or other rewards earned.
Here are a few examples of big spend bonuses available with Mastercard credit cards:
- Chase Aeroplan Card: Renew 25K status w/ $15K spend ⚬ Status Boost w/ $50K spend ⚬ Priority Reward w/ $100K, $250K, $500K, or $750K spend ⚬ Free award companion for rest of calendar year and all of next with $1Million spend
- IHG Premier Card or IHG Premier Business Card: 10K bonus points + $100 statement credit after you spend $20K in a calendar year + make one additional purchase ⚬ Diamond status after $40K in purchases + one additional purchase in a calendar year. Business card only: Free night certificate (up to 40K points) after $60K in purchases + one additional purchase in a calendar year.
- American Airlines cards: Most American Airlines cards now earn Loyalty Points in addition to redeemable miles with spend. This makes it possible to earn elite status without flying. Some also offer extra bonuses for large spend. Here are some examples:
- Citi® AAdvantage Platinum Select® World Elite MasterCard: $125 AA Flight Discount with $20K membership year spend.
- Citi® AAdvantage Executive World Elite Mastercard: Earn 10,000 additional Loyalty Points after you spend $40,000 in purchases during the qualifying status year.
- CitiBusiness AAdvantage Platinum Select MasterCard: $99 companion certificate with $30K membership year spend.
- AAdvantage Aviator Red World Elite MasterCard: $99 companion certificate with $20K membership year spend.
- AAdvantage Aviator World Elite Business Mastercard: $99 companion certificate with $30K membership year spend.
- Barclaycard JetBlue Plus, or JetBlue Business: Spend $50,000 and get Mosaic status which offers free checked bags; expedited security; early boarding; free drinks; enhanced point earnings; and 15,000 bonus points upon qualifying.
Earn rewards through spend
Not many cards earn rewards worth more than 2.85% when not considering welcome bonuses, bonus categories, or big-spend bonuses, but there are a few. Based on our estimated point values (Reasonable Redemption Values), you can earn up to 3% with the right card. That said, that’s such a small increment in value over Plastiq’s 2.85% fee that I wouldn’t recommend bothering with this unless you need the points for an even more valuable award.
The following table shows the cards that earn the best rewards for spend that is not within a bonus category. The list is limited to cards that (to the best of our knowledge) can be used to pay mortgage through Plastiq. If you press “next” often enough, you’ll find all matching cards in our database, but the first ones are those that offer the best rewards for everyday spend.
Card Info Name and Earning Rate (no offer) |
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Discover it Miles (First Year) Base 3% |
Citi Double Cash Card Base 2X (2.9%) |
Business Advantage Unlimited Cash Rewards credit card (with Platinum Honors Preferred Rewards) Base 2.625X (2.63%) |
Barclaycard Arrival Plus® World Elite Mastercard® Base 2X (2%) |
Barclays Arrival® Premier World Elite Mastercard® Base 2X (2%) |
SoFi Credit Card Base 2% |
Paypal Cashback Mastercard Base 2% |
Citizens Bank Cash Back Plus® World Mastercard® Base 1.8% Dine 10% Grocery 10% |
Bank of America Business Advantage Cash Rewards Mastercard (with Platinum Honors Preferred Rewards for Business) Base 1.75% Travel 5.25% Dine 3.5% Gas 5.25% Phone 5.25% Office 5.25% Biz 5.25% |
Business Advantage Unlimited Cash Rewards credit card Base 1.5X (1.5%) |
Discover it Business - Double cash back your first year Base 1.5X (1.5%) |
Santander® Ultimate Cash Back® credit card Base 1.5% |
Discover it Miles - Double Miles your first year Base 1.5% |
Barclaycard CashForward Base 1.5% |
The Comenity® Mastercard® Credit Card Base 1.5% |
Citi Custom Cash Card Earning rate: 5x on purchases in your top eligible spend category each billing cycle, up to the first $500 spent, 1x thereafter. Eligible categories: Restaurants, Gas Stations, Grocery Stores, Select Travel, Select Transit, Select Streaming Services, Drugstores, Home Improvement Stores, Fitness Clubs and Live Entertainment. ⚬ 1x on all other purchases |
Citi® AAdvantage® Gold MasterCard® Base 1X (1.3%) |
JAL USA CARD Base 1X (1.3%) |
Upromise World MasterCard® issued by Barclays Base 1.25% |
New Orleans Pelicans Credit Card Base 1% Dine 4% Gas 4% Brand 4% Other 4% |
Miami Marlins Credit Card Base 1% Dine 3% Brand 5% Other 3% |
Huntington Voice Base 1% Travel 3% Dine 3% Gas 3% Grocery 3% Shop 3% Office 3% Biz 3% Other 3% |
Liverpool FC Credit Card Base 1% Dine 3% Brand 5% Other 5% |
Manchester United Credit Card Base 1% Dine 5% Other 5% |
SEFCU Lightning Credit Card® Base 1% Grocery 3% Shop 5% |
Marvel MasterCard from Synchrony Base 1% Brand 3% Other 3% (Select entertainment = Movie Theatres, Video Rental and Game Stores, Theatrical and Concert Promoters, Amusement Parks, Digital Entertainment, Games and Software, Music, Books and Newsstands, Toys and Hobby Stores) |
Ridgewood Savings Bank World Mastercard Base 1% Travel 2% Dine 3% |
Major League Baseball® BankAmericard Cash Rewards™ MasterCard® credit card Base 1% Travel 3% Dine 3% Gas 3% Grocery 2% Shop 3% Other 3% |
Bank of America Business Advantage Cash Rewards Mastercard Base 1% Travel 3% Dine 2% Gas 3% Phone 3% Office 3% Biz 3% |
ABOC Platinum Rewards Base 1% Dine 5% Grocery 5% Shop 5% Other 5% |
Citi Dividend Platinum Select Base 1% Grocery 5% Other 5% |
AARP® Essential Rewards Mastercard® Base 1% Gas 3% Other 3% |
AARP® Travel Rewards Mastercard® Base 1% Travel 3% Dine 2% |
Cleveland Cavaliers Credit Card Base 1% Dine 3% Grocery 3% Brand 5% |
Conclusion
It’s possible to earn huge rewards by regularly signing up for new credit cards and using your mortgage spend to earn welcome bonuses. In some cases, even without a welcome bonus, it can make sense to pay Plastiq’s fees in order to earn “big-spend” bonuses such as elite status, free nights, companion tickets, etc. I don’t usually recommend paying your mortgage through Plastiq without earning a welcome bonus or big spend bonus, but it can make sense at times. For example, by using the Citi Double Cash card, you can earn 2 ThankYou points per dollar. After Plastiq’s 2.85% fee, that’s like paying 1.425 cents per point. That can make sense if you also have a Premier or Prestige card so that you can transfer points to loyalty programs in order to book high value rewards.
See also: How to Earn Rewards by Paying Rent.
my mortgage company allows me to pay my mortgage via debit card with no fees (caliber). Could I use the Point Debit card to pay and earn 2%?
Sometimes earning points can be alot of work and effort that takes time and gas. Sometimes you can earn points in your sleep. I call paying my mortgage on the Double Cash through Plastiq pajama points because they automatically earn points each month. Yes, the fee of 2.9% stinks, but I consider that these points will earn way more than 2.9%. If my aggregate methods of earning points has some cheaper ways (Rakuten), and some more costly Plastiq, and some in between, then that is all part of the game.
At first reading the title, I thought there was a way to pay for mortgage with credit cards without fees.
I still haven’t given up hope…
This is very high cost to buy points or status. Unless you have a signup bonus that you just cannot meet the spending requirement, I think all other use case you are at loss.
With a title like that, I was hoping Greg would have some big reveal for a lucrative approach to paying a mortgage. Even if it was convoluted, I would have considered it. I guess instead this serves as a confirmation of what I was already understanding to be the case. Other than the occasional school fee for the kids, I pay almost my entire life through CC … except mortgage. Oh well, at least I was able to refinance in late 2020 to well under 3%.
Is it possible to use Plastiq with MC prepaid GCs, which could then be drawn down to pay for mortgage?
No plastiq doesn’t take prepaid debit, VC or MC. They banned it more than a year ago.
Curious as to whether anyone knows why there’s such hostility among the credit card issuers to using their cards to pay your mortgage? It seems like a legitimate use to me.
I’m guessing it’s due to a fear of the credit user failing to pay the balance and the CC issuer prob can’t get their money back from the home equity.
How is this different from any other charge you make on a credit card?
Yeah, it’s debt on debt … a bit like you taking out a second mortgage without any approved collaterilization (if that’s a word).
Technically, the Visa network doesn’t prohibit using a Visa card to process a debt payment. But, the Visa network characterizes a debt payment as a cash-like transaction. As such, a person will not earn points and will be charged a cash advance fee. While it’s not prohibited, it’s impractical. I believe Amex has an outright prohibition.
To extend Greg’s concept, one could use a payment service to pay a car loan, a student loan . . . any kind of loan. It just needs to be on a Mastercard.
For those in business, there is an alternative to Plastiq. It’s called Melio Payments. Melio’s fees are roughly the same as Plastiq, although I believe it is experimenting with alternative fee structures. It is important to note that ONLY business-related payments are allowed. That being said, payment of a mortgage on an investment property is allowed.
What I don’t understand is why they would treat a mortgage payment differently from, say, a phone bill payment?
Let’s say that I lend you $1k in cash. Let’s say that you want to pay me back and use a credit card to do so. The card issuer doesn’t see this as a purchase of either a good or a service. It is an interpersonal transfer.
Let’s say that I lend you $1k for a home loan. How does the card issuer know the difference.
For tax purposes, the interpersonal transfer is not taxable. The home loan payment is taxable.
When a payment is made to a person via PayPal, PayPal asks whether it is a interpersonal transfer or for goods/services. If it is interpersonal, no 1099. If it is for goods/services, yes 1099.
As characterization of every loan repayment type could be unwieldy, I’m guessing that Amex and Visa wanted a simple straightforward characterization of all loan repayments — even if it means disallowing things like a mortgage, car loan, or student loan. I think it was too much of an administrative burden.