Want to pay your mortgage with a credit card? It can be done; I’ve done so for years. Here’s how I make my monthly mortgage payment using my favorite credit card.

Why to Pay Mortgage with Credit Cards

You do not earn rewards. I still haven’t found one where you can earn cash rewards, although that would be fantastic!

However, you do get an extra month and a half of float to earn interest on your money. Even though interest rates are pathetic right now, it’s still free money. And when you get that float month after month, year after year, it does add up.

Pay Mortgage with Online Bill Payment

Update: The FIA method described below is no longer available. However, you can use ChargeSmart to pay your mortgage. Just make sure that your cash back will cover any fees that ChargeSmart charges. In addition, you can Use Bluebird to Pay your Mortgage with a Credit Card.

Old FIA Billpay Strategy:
FIA Card Services offers an online bill payment called “Bill Pay Choice.” It was a an option that was originally grandfathered in for old MBNA cardholders. I use my Schwab credit card for the billpay.

If you don’t already have a card serviced by FIA, it appears that the Fidelity Credit Card also will get you access to bill pay choice.

In addition, you can also mix a rewards card with online bill payment. It’s not like balance transfers where you have to keep new purchases separate; you can mix bill payments and new purchases without any fees or problems.

Set Up Automatic Payments

Using the bill pay, you can set up automatic payments. I’ve mentioned before that I pay all of our bills with FIA bill pay.

FIA pays my mortgage on the 25th of every month. My credit card cycle closes on the 15th of the following month, and my payment is due on the 12th of the third month. You could stretch it out even further, but I always try to build in a buffer in case something goes wrong. It all gets paid automatically so I don’t have to think about it.

So my August 25 mortgage payment will come out of my checking account on October 12. Until then, it’ll earn some extra money! Do this with all of your bills and you’ll start to see the float add up.

Do you pay your mortgage with a credit card?



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Comments to How to Pay Your Mortgage with a Credit Card

  1. That’s awesome, have you found out how much you save a year doing this? And how much you would save if interest rates went up 2 or 3 points?

    Daniel

  2. That’s a great idea, I can’t wait to try it!

    I wonder if some rewards programs will allow you to get points. It sounds like Schwab doesn’t, but maybe there’s one or two that might? That woudld be huge!

    Car Negotiation Coach

  3. Very interesting… would love to charge this nut.

    BTW, just wanted to check if you are part of the Yakezie or not?

    Thnx

    Financial Samurai

  4. That sounds like a plan only if your a disciplined enough to ensure that you have the funds set aside. Could you do this and earn reward points like frequent flyer miles? Now, that would be great.

    Multiple Egg Baskets

  5. Pretty sure this feature was just disabled. I used to have this setup so that I would use a different CC with the payment due date on the same date as the cycle reset date for my Schwab card. I would earn points on the other card, have Schwab card pay it off (I never carry a balance) and have those charges effectively moved to my Schwab card. I would then have the whole month of float on the Schwab card + 30 day grace period, effectively giving me an additional 60 days of free float (I used this to earn interest in my interest checking account). Unfortunately, I changed one of my CC #’s because I misplaced the card and couldn’t add Amex anymore. The mortgage companies appear to be missing from the list now as well. I think the gig is up, though my mortgage and other cards appear to be grandfathered in.

    Jeff

  6. Isn’t it true that the only “additional interest” that you earn on the float by pushing back your mortgage payment is just the initial 30 days? After you delay your payment by 30 days that first time, you essentially have to pay every 30 days after that, so you’re aren’t gaining anything additional.

    Tim

  7. Is it true, can you no longer pay your mortgage? Madison, have you verified? I was going to apply today, but mainly for the mortgage payment purposes.

    Joe

    • Joe,
      I just logged in to check and my mortgage was paid on the 25th, just like normal.

      However, I can’t tell if I’m somehow grandfathered in or not.

      Madison

  8. I just received notice that FIA is discontinuing my abilty to pay bills via Bill Pay Choice and having them billed to my credit card. Perhaps they’ve finally caught on to this free float they’re providing. Anyone else received this letter?

    WB

    • WB,
      I got the letter this week too. Boo!

      Although, it appears that if you schedule all of your bill payments automatically by Nov. 7, that they will still be paid until Feb. 12.

      I spent yesterday afternoon scheduling a bill for every single payment I make, to make sure to stretch it out for a few more months.

      We’ll have to search for a new way to pay, it was a great ride while it lasted!

      Madison

  9. Regarding the FIA Bill Pay Choice program, I can also confirm that FIA is discontinuing that feature, at least as far as credit card payments go. I just spoke with a customer service rep today, and they said the program will end in November 2010. Customers can actually still set up bills to be payed through FIA Bill Pay Choice. However, to use it going forward, you must supply a bank account to link with the bill pay system. FIA will not pay the billing merchants using your credit card, but will instead do a wire transfer from the bank account you provide. Thus, you will not earn any points. I guess it does offer some convenience to centralize bill payments, but I can already do this through my bank, I don’t need FIA as a middle man.

    Mike

  10. So far the only way I’ve thought of that I could possibly make this work for me favorable requires three different stars to all line up at the same time.

    My mortgage is with US Bank and on ChargeSmart they will only allow me to pay US Bank with a Discover or a MasterCard. The ChargeSmart fee is about 2.49% of my mortgage payment.

    (1) Pay with my Chase MasterCard – gets 1% CashBack on all categories
    (2) Rely on Envaulted CashBack of 1.25%
    (3) Sign-up for the recurring payment for which ChargeSmart will give you a $10 discount on the fee

    If I do all three of those then I only get an additional $4 in Cashback for paying my mortgage and of course, the float.

    I have not tried this yet because I have several concerns:
    (1) In order to get Envaulted to the 1.25% cashback level each month I have to be really on top of their CashBack deals which may not be sustainable for me.
    (2) I’m wondering if Mortgage payments are something that Envaulted would consider an “ineligible” purchase.
    (3) I can’t seem to find on the ChargeSmart site if you get the $10 Fee Discount immediately or on your next payment? And what happens if you try to cancel you recurring payment?

    Has anyone else had any experience with using ChargeSmart to pay their Mortgage and making it turn out to you favor financially?

    Craig

  11. Too bad FIA doesn’t do this anymore, it would’ve been nice.

    Linda

  12. You can also try to pay with ChargeSmart using Discover using quarterly Discover promotions. Every now and then they advertise 5% back which covers ChargeSmart fees. I will try.

    Vik


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