If individuals have rewards credit cards (CC), the charging their monthly amortizations to CCs can be huge enough expenses to help them quickly earn miles and points to travel for free. But getting financial institutions like traditional banks, credit unions, or lending firms to take the CC is not that easy.
Sign-up bonuses may be the best time to use these things to make housing loan payments. While spending a dollar can earn people one to three rewards points with some CCs, enrolling as a new client can earn them 30,000 to 50,000 points at one time if they spend a specific amount of money within the first couple of months of having the credit card.
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Most CC firms may require individuals to spend three thousand dollars within the first two to three months to get bonus points. Paying for big-ticket items like housing or car loans can get people to that bonus points quicker compared to purchasing groceries or lunches every day. But a lot of housing loan lending firms will not accept CCs for a couple of reasons – it could lead to more mortgage defaults by borrowers, and financial institutions do not want to ensure the one to two percent CC fees for processing the payment.
In a world of low IRs, that is just not an excellent way to add profits to the company. For people who do not pay their CC off every month, paying a housing loan with a card, and then having to pay fifteen to twenty-five percent in IR on their card is a sure sign that they cannot afford a housing debenture.
Online options
But if people are going to pay off their card bill and not settle the additional IR that would negate any rewards, there are various ways to pay a housing debenture with a CC. For a small fee of around three percent, some online applications like Venmo make online repayments for people.
Points on their site can be used to pay taxes, purchase a vehicle, or pay for things using a credit card; even if the company usually does not accept CCs, they can accept for a two percent fee. Some applications had promotions with Android Pay that allowed people to settle their rent using credit cards but without any additional fees.
A check is sent through the application to the user’s landlord, all while the client earns points towards vacations. Other online services accept CCs and pay the user’s bills, although the fees for these services are not displayed on their website until the user completes the third step. Fees are calculated depending on the service the user chooses to pay, the amount being paid, as well as the payment method.
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Prepaid cards
Paying three percent in additional fees will most likely be equal to, or more than the CC rewards people would get for paying mortgages and is usually not worthwhile. One cheaper option is to get prepaid cards (PC) that move the funds to online checking accounts to get around the issue of lending firms not accepting CCs. Banks like American Express have services that worked like debit cards that had to be loaded with funds for uses like paying housing loans. Some services like Bluebirds are still American Express’ online payment system.
Bluebird can be loaded with things people can purchase with their CCs, like PIN-enabled gift cards that work like DCs, for a five-dollar fee. Up to a thousand dollars per day can be added to the DC. Once GCs are loaded onto the Bluebird, they can now be used to settle housing loans online. Another good option is to automatically have the user’s government benefits or paycheck to their Bluebird account during payday for free using direct deposits.
Money orders
Another good way to use PIN-enabled GCs that can be purchased using a CC to pay housing debentures is to use GCs to purchase money orders. These things can be purchased at traditional banks, large retailers, or grocery stores.
People can take these money orders to their banks and pay their debentures in person or through the mail. These things have fees like 70 cents at CVS to five dollars at conventional banks and have limits of five hundred to a thousand dollars.
These steps may be worthwhile if the person is getting a sign-up bonus, as well as the air miles and points, are worth more than the fees they are paying; even then, these things can be tons of work. If individuals have to jump through different hoops, is it really worth your time and energy?
If it is enough to get the person to vacation destinations, it may be worth their time, money, and energy. There are some tricks that people can be doing to pay their housing loans, and paying their CCs or money orders can reap its rewards. Whether it is credits, loyalty programs, or mileages, it can result in good results if done right.
Settling down payments on properties using CCs
Usually, property lenders and sellers don’t accept CC payments. The limit on these things is unlikely to be high enough to accommodate these types of expenses even if lenders and sellers accept it. Also, lending firms usually require that funds for down payments have spent at least sixty days or two months in the borrower’s bank account to get seasoned. However, getting around these things is possible.
Using third-party applications like Venmo or Paypal, people can transfer their balances from their CC to another account for a small fee and transfer these funds to their accounts. Individuals can also get cash advances on their CCs. The issue with these methods is that IR on CC debentures are usually a lot higher compared to what people would get for their mortgages.
Apart from that, financial institutions want to know where the funds for the DP came from. There is a good chance that they will not accept CC debentures as down payments because the point of these payments is for the lenders to see that the borrowers are worthy of risks.
