Credit Card Rewards Points
Utilizing your credit card rewards points can be an efficient way to save money for larger purchases like a mortgage. But it’s essential that you understand when and how these valuable resources can be put to use; after all, they could ultimately save you thousands of dollars in the long run.
When considering using a credit card to pay your mortgage, it’s essential to factor in any fees that could apply and determine if they are worth the cost. Generally speaking, paying for services with higher costs than what rewards from your card could be earned is not recommended.
Credit cards typically provide numerous ways for customers to earn points, including making purchases, meeting initial spending requirements and referring friends. Some issuers also provide milestone rewards like bonus points when customers make a certain number of purchases or spend a specific amount in one year; plus other incentives designed to motivate users to remain with the program.
One option for paying your mortgage is using a credit card that provides bonuses on payments made to the lender, such as American Express Bluebird or Target Prepaid REDCard. Unfortunately, these cards aren’t accepted by most lenders and could incur an additional fee.
Another option is using a third-party payment provider such as Plastiq. Although these services can be convenient, they may have hidden fees that are difficult to calculate, making them ineffective for your individual requirements.
Some credit card issuers offer cash back that can be redeemed for things like travel or gift cards. Unfortunately, these options typically have a minimum threshold to earn rewards, so make sure you’re getting the most value possible.
Your credit card rewards points can also be used for everyday purchases like groceries or gas. Although these rewards may not offer as much value as other redemptions, they could still be a useful addition to your monthly budget.
If you’re paying your mortgage with a credit card, be sure to monitor the balances carefully. Ideally, pay off the entire balance each month in order to avoid interest charges that can put a strain on your finances.
Utilizing Your Credit Card Rewards to Pay Off Your Mortgage
Some card issuers, like SoFi and Citibank, offer programs that let you redeem points directly for debt payments. These services offer an additional 1% on eligible payments which can be beneficial when working toward paying off your mortgage.
Furthermore, many of these programs provide additional advantages like concierge service, free rental cars or discounts on certain products. The most successful programs provide a combination of incentives to attract and retain customers.
To maximize your credit card rewards, be responsible and pay off your balance in full each month. Otherwise, you could end up paying a high interest rate and forfeiting valuable rewards.