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Can you pay your mortgage with a credit card?

Can you pay your mortgage with a credit card?

When it comes to paying your mortgage, it’s not a good idea to use credit cards. Understand why credit cards and mortgages don’t mix, and find out where to get help if you’re struggling to keep up with your mortgage payments.  

Anelda Knoesen
From the Money team
minute read
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Posted 9 JANUARY 2020

What’s wrong with using a credit card to pay my mortgage?

Many mortgage providers don’t accept mortgage payments made with a credit card. If you try to pay in this way and your payment is rejected, it may adversely affect your credit score.

But even if your provider accepts the payment, it may be treated as a cash advance by your credit card provider, which means you’ll start paying interest on the payment immediately. If it’s not seen as a cash advance, you’ll still need to clear what you owe within a certain number of days (usually around 55) to avoid interest charges.

Any interest you pay on credit card debt will be on top of the interest you’re already paying on your mortgage. And credit card interest can be 20% or more, making it a very expensive form of debt.

Why do people use their credit card to pay their mortgage?

There are a couple of reasons why people might consider paying a mortgage with a credit card, such as struggling to keep on top of your repayments or trying to qualify for a sign-up bonus on another credit card. However, using a credit card is likely to make things worse, so it’s better to find an alternative.

Debt: If you’re thinking about using your credit card to pay your mortgage, then there may be a more serious debt issue, such as not being able to keep up with your mortgage repayments.

If this is the case, you should notify your mortgage provider and consider getting free debt advice from a debt charity, such as National Debtline or Citizens Advice.

It’s better to be being open and honest with your provider about your situation, instead of falling into arrears before alerting them. They may be able to help you by giving you a repayment ‘holiday’, where you stop making payments for a period of time. This might give you the breathing space you need to get back on track.

Rewards: In exceptional circumstances, you may be trying to qualify for a sign-up bonus (some credit card providers offer a sign-up bonus if you spend a certain amount within the first six months) or trying to maximise points on your rewards card. It’s never a good idea to go into debt on a rewards card, as the interest rate will be so high. These cards work best if you clear the debt each month – any interest incurred quickly wipes out the value of the reward.

In most cases, it’s unlikely that the percentage of rewards, such as a bonus or cashback, would cover any fees that you’re likely to incur by using a credit card to pay your mortgage.

Are you struggling to keep up with your mortgage repayments?

If you’re struggling with debt and finding it difficult to keep up with your mortgage repayments, you can get free advice from these organisations:

Citizens Advice Bureau

National Debtline
0808 808 4000

Consumer Credit Counselling Service (CCCS)
0800 138 1111

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