Keeping current on your mortgage is a bedrock principle of financial responsibility. Missing a home payment can have dire consequences for your credit score and even your living arrangements. But if you find yourself in an emergency because you lost a job or suffered a medical setback, you might be forced to consider paying the mortgage with a credit card. Or you might wonder whether you can hike your monthly rewards points on a credit card by paying your mortgage that way. It can be done, in a roundabout way, but it’s not advisable, and it doesn't carry any rewards.
No major mortgage lender will directly allow you to use a credit card to make your monthly loan payment. Before the most recent recession, several had begun to accept credit card payments, and American Express also ran a program in conjunction with some mortgage lenders. But the collapse of the housing market made mortgage lending companies tighten their internal controls. Lenders now realize it's not to anyone's benefit to allow you to increase your debt load in this way. If you're in a temporary cash flow jam, with too many bills arriving at once before your next payday, pay your other obligations by credit card, reserving your available cash for your mortgage.
You could use your credit card to pay your mortgage by getting a cash advance. But you’re likely to pay high interest rates on a cash advance, and it won't earn you any rewards points on your card, so there’s no real advantage to this approach. A web-based service called ChargeSmart allows you to pay bills, including mortgage payments, indirectly by credit card, but it will charge you a 2.5 percent fee, so it's an expensive option. If you want to make sure never to miss a mortgage payment, you can ask your lender to take an automatic debit from your bank account. That way you never run the risk of being inadvertently late with a payment.
Mortgage payments are often as much as $1,000 a month. Running up your credit card to this extent all at once can have negative consequences. You’ll probably swallow up a big chunk of your available credit, which lowers your credit score. If you fail to meet your minimum payment on a large balance like this, the interest rate on your card could soar and you could be in a downward financial spiral. Thirty days is not much time to deal with the amount you charged, and your mortgage payment will be due all over again.
If the reason you’re considering paying this way is because of a financial hardship that you believe will be temporary, the better course would be to contact your lender and explain your situation. Many lenders will give you permission to spread your payments in a different way or will come up with a modification that takes account of your situation and allows you to get back on track.