Only a few mortgage companies accept credit card payments and yes, you can earn miles by paying your mortgage through credit card, although it would depend on the credit card you’re using but as I said, most mortgage companies do not allow direct payment of mortgage through credit cards.
Moreover, some credit servicers also do not allow direct payment of mortgages through their cards. Why most lenders frown upon credit card payments has to do with the fact that you’re paying one form of debt with another.
Miles are a form of credit card reward package offered by most credit card issuers as a spending incentive for card holders. Miles come in the context of air travel. However, most people confuse miles for literal distance in miles in air travel.
It doesn’t work that way. The number of miles you need for a flight depends on where you’re headed, the actual price of the flight without the miles and whether or not it’s travel season. So even if the distance you want to travel is 500 miles, you might need 20,000 credit card miles to book a free flight for the distance.
As said earlier, paying mortgage directly through credit card for miles can be problematic when it comes to most lenders but there’s ways around that, such as transferring money from credit card to a transfer account such as one at Plastiq and then paying off the mortgage and using a cash advance, but these ways come with issues of their own that have been discussed below.
Problem with Paying Mortgage Through Credit Card for Miles
Any advantage you have in miles will be countered by the transaction fees you’d be paying and so it might not even be worth it after all. For instance, you’d be charged a fee of an average of around 1.5%-3.5% for most cards.
That is for paying off a mortgage to lenders that allow payment through credit cards. On the other hand, if you used a service like Plastiq, you’d be charged 2.85% if you choose to pay a mortgage via credit card. There’s limitations even with Plastiq. Visa and American Express cards can’t be used to pay mortgages via Plastiq.
2 Steps to Earn Miles on Your Credit Card
1- Find a Credit Card With a Miles Reward Program
First off, you’d need to find a credit card with a miles incentive suitable to your travel as well as spending habits and the specific airlines with miles reward partnerships with credit card issuers.
Another thing to keep in mind is to see what amount of spending earns what number of miles. Some credit card issuers offer 1 mile for every $1 you spend in your credit, others could have better or worse deals. Choose the one that suits all of your needs.
2- Spend With your Credit Card
The way to earn miles on a credit card is to simply spend. If you want to buy some goods or services, buy them through your credit card, provided that you’re okay with credit card interest and can pay your credit debt timely. Note however, that the exception to the rule is cash advances.
You won’t earn miles on cash advances or if you decide to switch to another credit card through balance transfer.
3 Ways You Can Lose Credit Card Miles
Losing credit card miles can be much easier than earning them. I’ve outlined below how that can happen.
1- Overdue Credit Debt
If you miss out on timely paying your credit debt within the designated period, you can not only lose points in your credit score, you’re likely to lose some of the miles you earned on your credit. On top of that, you won’t gain back those lost miles even if your credit reputation recovers in the future.
2- Refund on Credit Payment
This one’s quite obvious. You earn miles by buying goods and services through your credit card. If you get a refund on any of those purchases, you lose the miles you earned on those purchases.
3- Airline Out of Business
If the airline which is associated with your credit card’s miles reward program, goes bankrupt or shuts down business operations, you could end up losing your miles. This one is not on you but it can still cost earned miles.
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