Pay Mortgage with Credit Card For Free

January 15, 2009 by TFB

Can you pay your mortgage with a credit card? The answer is YES. I've been doing that every month for two years. No, I'm not talking about third party programs which charge you a fee of more than 2% of the payment amount. That's not smart. I don't pay any fee or interest. Although I don't get credit card reward points for the mortgage payment, I receive free float. January mortgage payment is charged to the credit card on January 1. The credit card bill isn't due until after Feb. 15. When every mortgage payment is deferred by a month, it's equivalent to having one monthly payment in my pocket as an interest-free loan forever.

You need a credit card by FIA Card Services. FIA Card Services is the new name for MBNA after Bank of America bought it. Eligible cards include Fidelity Investment Rewards Visa (I have this card), the new Fidelity Retirement Rewards American Express, or the new Schwab Bank Invest First Visa, and perhaps some other cards also offered by FIA. The last two cards both pay 2% cash back on all purchases, which is the best you can find. These cards have online bill payment service just like checking accounts do. FIA calls it Bill Pay Choice. Set up your mortgage payment as a recurring bill and the card will pay your mortgage every month. Bill payments are treated as regular purchases, not cash advance. I then set up auto-debit from the card to my checking account for the full balance on the due date (call customer service for a form). That guarantees the card balance is paid off in full and on time every month. It's all free and fully automated.

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Comments

17 Comments on Pay Mortgage with Credit Card For Free

  1. Robert on January 15, 2009 | permalink
    2.  

    It's a great news, I am sure plenty of people would latch on to this opportunity, I hope this lasts for a long time!

  2. James on January 15, 2009 | permalink
    3.  

    Thanks for the great tip. After all, for many of us, the mortgage payment is the single largest montly expense. Do you know how I can find out about other available FIA cards? For years, I was looking for something like this. Thanks

  3. DoneToZen on January 15, 2009 | permalink
    4.  

    Is this for real? I've been looking for a way to pay my mortgage with a credit card (so that I cane take advantage of the rewards, of course) ever since buying my home, but the only one I saw was the third-party service that charged an exorbitant fee for the convenience. If this works out, it will be a nice source of free money!

  4. DoneToZen on January 15, 2009 | permalink
    5.  

    Whoops. Just read that your mortgage payment isn't good for rewards. You'll still earn some money if you put it in a "high-yield" savings account, I guess…

  5. TFB on January 15, 2009 | permalink
    6.  

    James – I don't know which other cards from FIA also have Bill Pay Choice. If you Google 'FIA "Bill Pay Choice"' you will see some other cards.

    DoneToZen – I updated the post and made "no rewards" bold. Free float is good enough for me.

  6. Oblio_A on January 16, 2009 | permalink
    7.  

    Useless. If you are so strapped for money that you have to delay your mortgage payment every month, you have bigger problems than figuring out how to juggle your debt. An "interest free loan forever" – give me a break. If you really want to win, pay 10% extra on your mortgage payment every month and reduce your total interest by thousands! (and you need to stop listening to Suzie Orman and her "FICO-babble" – she is not all that clever.)

  7. JeffieG on January 25, 2009 | permalink
    8.  

    James – Just wanted to make it clear to your readers…not only do your mortgage payments not received the 2% cash back, actually none of your online checks used with this account receive the 2% cash back. Pretty disappointed – I thought I found a way to get back 2% cash on my rent and student loan payments.

    So really, the only benefit would be the float.

  8. Jeff on January 28, 2009 | permalink
    9.  

    James: you indicated you used auto-debit to pay "the full balance on the due date". Is this the full balance of only the mortgage payment, or the full balance of all the charges on the card?

    If its the latter, I am confused; how could you know in advance what each month's full balance will be?

  9. TFB on January 28, 2009 | permalink
    10.  

    Jeff – The full balance of all charges on the card, including mortgage payment. The credit card company manages that. They automatically debit my checking account on the due date for the full balance, whatever it comes out to be. Of course I receive the account statement a few weeks before the due date and I'm aware of what's going to happen.

  10. Lost on January 29, 2009 | permalink
    11.  

    I called Schwab First Visa, they wont give you the 2% I call like 5 times different story each time. All the credit card company say you need to call your mortgage company and see how they treat the payment. If they treat it as cash advance you will be charge on the CC side. The fidelity one say the same thing call your mortgage company. Floating for 1 month is nice because with Schwab checking account you earn 1% for now before it was like 4%. If you have a few mortgage like I do it will help ALOT. I still want the 2% reward.

  11. Justin on May 21, 2009 | permalink
    12.  

    Have you actually done this?

    As I understand it you need to be grandfathered in to use MBNA's Bill Pay Choice.

    I think the only people who can get this feature are the ones who set up Bill Pay Choice years ago, before MBNA was purchased by Bank of America. Also, I guess people who are authorized users on MBNA cards that have Bill Pay Choice already set up can get it too (at least that's what I read on some fatwallet post).

    I guess that this is still an assumption, though–it's just something that I've sort of pieced together through a lot of internet research (I don't have this billpay but I want it badly). If anyone knows otherwise please shoot me an email at [removed by editor]… this feature is awesome and as far as I know I'm ineligible because I never had an MBNA card (I'm only 20 years old). If there's a way, though, I'd love to hear about it.

    Justin

  12. TFB on May 21, 2009 | permalink
    13.  

    Justin – Yes, as I said in the post I've been doing this every month for more than two years and it's still going. You need a card managed by FIA Card Services, not just Bank of America. Have you tried applying for one of the Fidelity or Schwab cards mentioned in the post?

  13. Justin on May 21, 2009 | permalink
    14.  

    I found out some more information on this last night.

    Unfortunately, no, a FIA Card Services credit card doesn't automatically grant you access to Bill Pay Choice. If I signed up and got a Schwab Invest First card tomorrow I wouldn't have access to the special billpay. Most people who have this feature were grandfathered in years ago through their old MBNA cards. What's nice, though, is that once you're in on one card, all your FIA cards get access… usually.

    Oddly enough, though, if I signed up for the Fidelity Visa card serviced through FIA tomorrow I -would- have access to Bill Pay Choice (probably–it worked for someone last year). It seems that the Fido Visa is the only option for newcomers to get access to this awesome feature. Fortunately, though, like I said before, once you get billpay on the Fido Visa you can extend it to any other FIA cards (like the Schwab or Merrill ones).

    Also, fyi, I've read that FIA Card Services -is- Bank of America–FIA is what card issuers use when they don't want their customers to know that their cards are being services by BoA.

    Thanks for the blog, by the way! If it weren't for this post I'd have had no idea that this feature even existed :) Take care~

  14. dan on May 26, 2009 | permalink
    15.  

    not sure if it is true, but I just called Charles Schwab cust. service and they said that as long as you dont use bill pay choice you are eligible for the 2% cash back on mortgage payments.

  15. Justin on May 26, 2009 | permalink
    16.  

    Yeah Dan, that is correct. Bills paid to lenders that accept credit card payments qualify for cash back here because technically they're considered retail purchases.

    Unfortunately, though, not many lenders have it set up so you can make mortgage payments with your credit card (without using Bill Pay Choice, anyway). However, a lot of other kinds of payments, like utility bills, can be set up just fine. It sure sounds nice getting 2% off on stuff like that :)

    Justin

  16. Justin on May 26, 2009 | permalink
    17.  

    Also, I just got accepted for a Schwab Invest First FIA card and I'm going to try a few different ways to get Bill Pay Choice on it–I'll let you guys know how it goes

    :)

  17. Justin on June 2, 2009 | permalink
    18.  

    Good deal! I guess the information I got before wasn't entirely correct :)

    Someone with no ties to MBNA or FIA or anything can apply for a Schwab Invest First Visa and start enjoying Bill Pay Choice as soon as they get it, no questions asked. Just register on fiacardservices.com

    Worked for me, anyway :) Thanks guys!

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