New Service Allows You to Pay Your Mortgage with Your Card

American Express introduced a credit card quite awhile ago that allows its holder to pay mortgages with the credit card. This card, however, was a bit tricky to use and could be quite expensive because applicants had to pay $395 in closing costs in order to acquire a new mortgage or refinance their current loan. In addition, the number of lenders partnering with the American Express card was limited. Therefore, if you wanted the convenience of paying with your credit card, it was going to take quite a bit of paperwork and it most likely was going to involve changing your bank.

A new service from Cardit.com, however, allows the same convenience of paying your mortgage with your American Express card but does not have the same downsides. For example, you can pay your current mortgage through the Cardit program without the need to change your lending institution. Choosing this option will cost you a bit more, however. There’s a $19.99 fee as well as an additional 2.49% fee of the amount of your mortgage payment. This means you will have to pay an additional $44.89 each month for each $1,000 in mortgage payment that you’ll have to make.

I don’t know about you, but I think the practice of encouraging people to pay their mortgage with a credit card is absolutely terrible. To me, paying your mortgage with a credit card is a dangerously slippery slope. But if you’re seriously considering using a card for this purpose, you need to consider your options very carefully.

If you’re in a tight spot and are unable to pay your mortgage, a program like this can help get you over that hump. If you can’t afford to make a house payment, this service will help you make that payment and avoid the possibility of foreclosure. So, it might be a better idea in the short term to put that payment on a credit card (to be repaid quickly, of course) and avoid missing a house payment. Nonetheless, it’s not a practice I would encourage. Besides, you have to pay quite a bit extra for the “privilege” of using a card to pay your mortgage, which means it’s more expensive than just paying it outright.

If you are still interested in using a program such as Cardit, the one benefit is the fact that it works along with any Visa, MasterCard, or American Express credit cards. Therefore, if you have a rewards program, you can earn rewards with the help of your card. Of course, the fees that you pay for using the Cardit program will completely offset any rewards you earn.

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This entry was posted on Sunday, October 7th, 2007 at 3:34 pm and is filed under Debt & Consolidation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.