Paying your Mortgage with a Credit Card

I received a message on the Forum from a reader asking me how to pay regular expenses, such as his mortgage, insurance, etc on a Credit Card, and while I gave him a specific answer there, I’d also like to expound on this concept here.  As you guys might know, I’m trying to not write about specific MS tricks here on the blog, because that doesn’t gel well with the idea of keeping them alive.

That said.  I think when a person asks ‘how do I pay my mortgage with a credit card’ they are coming from a very specific place, and as such some generic help might be useful.  It’s likely they understand points, miles and cashback is great, they earn some already, and they want more of it.  So let’s talk strategy.

Firstly, there isn’t really a scalable and sustainable way to pay your mortgage with a credit card.  There are some options to do so, but they come with overall caps and limits that pretty much kill the concept at scale.  And more importantly, they come and go again.

Secondly, you need to remember the value of your time.  It is worth a LOT more than you think.

Let’s take a $3000 mortgage payment, and assume we could find a fee free way to pay that with credit card.  On the one hand, you might think to yourself, with a 2% card and a 4% mortgage, you have just cut your loan rate in half!  However, being a bit of a pessimist, i’d rather look at it like this:

• A $3,000 payment is worth $60 or so per month in rebates. Providing you use the right card.

Now, ask yourself, what is your salary, how many hours a week do you work, and how much do you hate your boss?

If you are working hard to enjoy life, do you want to trade what precious free time you have earning $60 of rebates?  If you do, then you could go buy gift cards, load them to an app and possibly pay your bills.  If you have access to such locations that sell them and regularly frequent them, then this is certainly an option.  Indeed, it is possible to bump the rebate to $150 if done correctly.

But the question remains, how much is that time of yours worth?  If we think of a $3000 mortgage it is likely that your salary is $130,000 per year, probably around $150-$175K when you add on your 401(k) matches, company stock, etc.  You’re probably earning about $75 per hour.  But lets remember that element of ‘your sucking it up to make a better life for yourself’.  So your free time must be worth more than that, else you should just quit and find something you love.

OK, you get it, but you REALLY want to do this…

Fine, I hope that the perspective helped a little. Now, if you want to pay your mortgage then the secret is to stop calling it your mortgage.  Call it instead, $3K per month of Credit Card spend. And find a way to do that.  Or, alternatively, sell stuff on Etsy.  The point here, is that credit card spend is a rebate.

Rebates = freeing up cash for other things = kinda free money/stuff

But if you actively seek them out, using brain power, trekking to grocery stores or whatnot, then you are working to earn rebates.  It doesn’t have to be a mortgage payment here.  As long as you work and somehow earn $3K of spend, you have achieved your goal.

This is key – if you can find a gig that is:

• Safe (no risk of fraud)
• Not another job (not trading time for money)
• Fast (not stuck standing in line waiting for someone to return a bunch of bananas)

Then you are golden. Sadly, it doesn’t exist.  Every single gig has the fraud risk, but some are faster than others.  To take a dead one as an example – Amazon Payments allowed you to send $1K per month per person and earn points.  I had 4 accounts, as I never got around to building more.  This meant that for 10 seconds each account each month I could earn $4000 of rebates.

In essence, if I had a $3000 mortgage- I just paid it with a credit card… and then some.  I call this approach the ‘Underpants Factor’.  If you can sit around in your underpants at home making a rebates when you would otherwise be doing nothing productive, then you are on to a winner – but if you have to actually go out an ‘earn’ your rebate, screw that!

Conclusion

For household budgets it is very important to ‘name your money’.  For example you might have a ‘Mortgage Payment’ and an ‘Emergency Fund’ but it all boils down to how much is coming in, and how much is flowing out of your house/family each month. Don’t be trapped by the names when it comes to earning rebates, because you might find yourself chasing opportunities that cost too much time and you’ll be spending your free time working, rather than savoring the time away from your darling boss.