Paying debt with a credit card is an option that is used not only as a convenience or in times of financial distress but to earn rewards offered by credit card companies. Many types of debt can be paid using credit cards, such as utility bills, credit cards, personal loans and even auto loans and mortgages.
Legal
While it is legal to pay your mortgage with a credit card, it does not mean that you will be able to pay with a credit card. There are many issues involved with a lender being set up to accept credit cards. Contact your mortgage company to see if the company has the capability to accept credit cards. There may be other ways to pay via a credit card even if your lender doesn't directly take credit cards.
Alternatives
Credit card companies use rewards, lower interest, no interest and other gimmicks to get customers. Your credit card may offer a bill payment service, and you can set up the account to pay your mortgage. You must make sure the credit card company will mail out a paper check for this to work. Your bank may offer a bill pay service using your credit card as the funding source. Contact your credit card issuers as well as your local bank to check if this is an option.
Benefits
Many credit cards have reward programs where you earn points toward cash back, travel rewards or other gifts. For each dollar spent, you earn a set number of points. By charging the credit card, you earn the points for a purchase you would have paid anyway. Many people pay a bill with a credit card and immediately send a payment to the credit card company. By paying the credit card immediately, interest is not charged, and you have earned the rewards.
Cautions
Using a credit card to pay a mortgage should be done either as a last resort when there are no other options or with full knowledge that the funds are there to repay the credit card. Using a credit card without plans to repay the debt can result in finding yourself in a serious financial situation leading to poor credit or bankruptcy.
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