CardIt
 

As advertised on Flyertalk.com...

Pay your mortgage with a credit card....Auto loan and lease payments coming soon!

Discover, Mastercard or VISA, but not American Express.

Fees: 2.49% PLUS $19.99 per transaction.

http://cardit.com/

Dennis,

thanks for the info and more importantly your countless on going contributions on this Forum!

Having said that I think that this "deal" will be a commercial failure , eevn among hard core milegae junkies.

1- List of participants is primarily comprised of sub-prime and small lenders.

---what percent of the US mortgage do you think that their list has?
---What is the marketshare of the participants?


2- Fees make the tax payments look like a great deal.
Unless making a very large payment then the $20 Flat on top of 2.49 adds a lot of vig.

If you have a $15,000 a month morgage with one the participants then $20 is not meaningful.

But I'd venture to guess that most FT'ers with a mortgage that size did not borrow from this list of participants.

Finally, its a very uncompelling business model.
The flat fee is even more costly on the "soon" to be offered Auto and lease payments.

From the horse's mouth . . .
 

Hi FT'ers,

Just wanted to throw in my two cents from Cardit.

Though our fee may be off putting to some, many rewards cards significantly offset that expense. With the right combination of rewards program and flight scheduling, we have found that even after paying our fee, users have been able to end up in front 1/2 point or more. With that said, we are also working on ways to reduce our fee and/or provide other incentives to use our service.

"writetorich"'s claim that our participants are primarily sub-prime and small lenders is incorrect. Currently, we accept payments for 116 lenders (and growing) including the Top 10 mortgage servicers which represent the overwhelming majority of prime mortgage products. Cardit gives no preference to the lenders we support in regards to their loan types.

As for our auto and lease payment offerings, we are formulating a fair fee structure and have yet to publish it on our site. We can divulge that it will likely be very different from our mortgage payment model.

I appreciate the forum's interest in our service. As with most things, Cardit isn't for everyone; however, we are more than happy to offer it as an option for those to whom it makes sense.

With any additional questions or concerns, don't hesitate to contact me at jake (at) Cardit (dot) com.

Jake

Welcome to Flyertalk, and thank you for identifying yourself.

1. Do all card issuers treat CardIt transactions as purchases, rather than cash advances?

2. Is there any prospect CardIt will accept American Express?

3. Any problem using CardIt to make larger than required payments, or extra principal-only prepayments?

Welcome to FT.
 

A first post worthy of a veteran;)

You'll fit right in on this board:D

Thanks for responding and "verifying" your identity with a corporate e mail address.

To answer your questions . . .
 

1. Yes, it shows up and is handled the same as any other charge.

2. Yes, but not immediately. We are exploring the possibility of adding them and hope to do so soon.

3. There shouldn't be. Payments from Cardit look like any other payment. As long as your lender doesn't require principal to be paid through a different channel, it shouldn't be a problem.

Thanks for your interest in our company. Feel free to post any other questions here or to contact me directly. Regards ;)

I just went through the first few steps on the website to see how it worked, and only one amount can be entered for the payment. When I pay directly to my lender online, I have to enter any extra amount as either extra principal or extra escrow. Without my lender knowing what the extra amount is for, it may not be applied as extra principal. More than likely, it may be applied as a partial payment toward the next payment, which may include some interest rather than all principal. I would like to use this service if Amex gets approved, but I also want to pay extra principal and am not certain that it would be applied correctly.

Jake-

Can you provide an example of this? If I could come out ahead I would be interested in CardIt. I don't know of any card that pays more than 2% on standard purchases, that card being the Premier Pass when paired with a flight pt.

To end up 1/2 pt ahead as you say, one would need to be using a card that pays 3% or more.

Unless you are referring to getting the maximum value out of you points when redeemed and not just the earning ratio.

Thanks!

Great question. We have found that each lender processes extra payments differently. For example, Wells Fargo directs payments in excess of the monthly bill to principal by default. Some of the newer mortgage products (neg am, IO, or PITI) that allow flexible payment amounts may be treated differently. The best way is to verify with your specific lender what their default procedure is for excess payment amounts. If your comfortable telling me your lender, you can email me and I'll research this for you.

1 TYP is worth 3 cents if redeemed for first/business class travel. Many cards offer 2 points per purchase, Citi Platinum Amex offers 3 points for first two years. 3 x .03 = 9 cents per $ spent, or a theoretically 9% "cash back." Not really cash in pocket, but value in plane tickets.

If you just use TYPs for gift cards, you get exactly 1 cent per TYP, or 3% cashback on the Citi Platinum Amex.

Unfortunately, this is a moot point as CardIt doesn't take Amex.

Jake,

I'll give an example exactly similar to Richard's. When I schedule my mortgage payment each month with Countrywide, If I include extra amounts I have to tell it where to apply them, whether Principal or Escrow. I think what he's getting at is, it would be great if cardit.com was setup so that we could direct where we want extra payments to go, just like we can if we are paying our mortgage directly to the lender. What my lenders default for extra payment is, is not going to help unless it just happens to be what I want it to be. As Richard suggests, the default may often be to hold the amount as credit toward the following month, preventing us from paying the extra principal to pay off the mortgage sooner.

CardIt
 

Jake,

I find your discussion to many questions honest and compelling to look at the service....

So , if i have to pay my monthly Chase car loan , do I have to advice them prior that i would pay it on CardIt or that step is not necessary...will be happy to consider mortgage payments down the road after the fee stumbling block gets eleminated.

Thanks.

NO!


A TYP is not "worth' 3 cents if redeemed in first/business class.

First, that assumes that the hassle and inefficiencies of dealing with EXPREDIA does not result in a less than competitive price and or at a minimum and aggravation and waste of time factor.

Second, It assumes that the premium luxury travel would have actually been paid for by you in cold , hard cash.

After all you are paying card it , cash in advance.

Third, if you are a couple with a mortgage very often you need around half million dollars of points to get two J tixs.

So you have paid Jake a 2.5% vig for years to get about $250,000 or best case $167,000 in mortgage payments to him.

lost opportunity cost?

vulgarities of future TY point devaluations?

Uncertainty over retail pricing on Business class? some regions EUROPE, SOUTH AMERICA SAO PAULO are VERY HARD TO REDEEM AT THE CURRENT CAPS.

Fourth, your 3 cents in travel assumes a very unlikely scenario of redeeming the ABSOLUTE maximum value on a ticket that you would have definitely paid for any way. Its difficult to Hot EXACTLY the maximum.


Finally, what would you rather have Three cents in cash for 500,000 points OR the potential speculative ability to book travel , WITH ONE VENDOR, WITH ONE SEARCH ENGINE & BOOKING LIMITATIONS with that travel having a theoretical potential maximum value of 3 cents.??

I apply a 50% discount to the above scenario.

A TY point is "worth" 1.5 cents to me and if I can't achieve a critical mass of 250,000 TY points then its worth 1 cent in cash.

Conversely, I pay my taxes using starwood Amex as the SPG points are Worth 2.49 cents ( or close) to that. Sometimes even the Hilton AX, If I need it no meet the annual $ 20,000 theshold requirement for HHonors Gold.

Do you have any hobbies other than publicly disparaging the Thank You Program? You have made it abundantly clear over many months (both before and after the 'vulgar' devaluation), in many posts, and through many threads, that the TY Program does not meet your needs. Must we hear it yet again?:confused:

Ummm, be careful with this. It may have a place under certain circumstances, but paying 2.49% plus $20 per transactions simply to earn miles is, well, idiotic. A $1,000 payment costs $45 in fees. There is no rewards card that can consistently return 4.5% and you'd need that to just break even for your fees! You're far better simply dropping $45 (or whatever the fee would be) in a savings account. At the end of the year, you can spend the cash on your "reward" travel.

Sorry... :td:

My thoughts exactly !!!

By the way, we all know that "writetorich" hates TYP, is a firm believer is all things created by AMEX, and that if any program faces a devaluation -- that program SUCKS !!!

but we must hear it all the time :D

What is also somewhat nice about this program is the possibility of the extra float depending on when the charge hits vs. when your statement cuts.

If you can get a credit card whose statement cuts on the 30th, and you mortgage is due on the 15th, you pay your mortgage on the 1st then you have all that extra time before your payment is due. If you switch cards every month you can in theory come out ahead.

-Dave

You "come out ahead" by saving a few days of of interest but paying ~4% for the convenience? If you have a mortgage payment that you need to float, get a smaller house.

Need to float no, want to float now and then yes. And it's not 4% it's 2.5% Not to mention the other option. If you are putting it on a 0% for 12 months card you can come out way ahead making minimum monthly payments and putting the savings into a 6% or better account.

-Dave

You are ignoring the $20 fee?

If we're getting into details, the fee is 2.49% + $19.99. If your mortgage payment is $199,900 or more, the total fee will be 2.5% or less. :D

Well the few days could easily be 60 - 90 days.

Here is how:

1. Set up your credit card billing cycle to start a couple of days before your payment is due. This will give you a 45 day float (25 days for statement to end + 20 days before payment is due)

2. Pay the credit card using MBNA bill pay. If you set up billing cycle on your MBNA card to start a couple of days before payment is due on above credit card you will get another 45 days or so of float.

Even if you get your "float" to 90 days, that means long run (after the first 90 days), you will just be on a three month lag so have three months of mortgage payments you could earn interest on. Depending on your mortgage amount and savings account rates, you're probably looking at a couple hundred bucks a year tops.

Well said. Seems like this forum is full of spooks!

Also this is not new at all, there is another out there and has been around for a couple of years that I know of.

Rich, Ive started to look at TYN more closely since discovering AMEX Plat and I can show you ways of redeeming Long-Haul J flights which are the most efficient use of miles/points, period. But now gotta run, ill resume later.

Agreed. Overall I still don't think it's very feasible unless you have a large mortgage payment and value miles/points at a higher value than I do.

I would consider it valuable if I was really close to hitting a threshold bonus for spending or during a double/triple points promotion. Sadly, most cards I would want to do this for are AMEX.

Sorry for the delayed response, bombayduck.

An integral part of our service offering is *not* having to advise your lender, be it for your car or your mortgage payment. It is received as an electronic check on your behalf.

Now, we are really starting to "nickel and dime"....theortically it is possible to earn some interest due to the lag...but here is something to consider:

1) Will the interest equal the fees or even 50% of fees associated with each and every single transaction?

NO !!!

2) Will this create more headaches for someone who is trying to make this work?

YES !!

Personally, not for me :td::td:

If anyone wants to try it and run a 6 month figures including your time spend, I would love to look at thew figures over a few beers !!! My treat !!

Let's assume you are already charging every possible to dollar to your preferred cards. Along comes an offer like this...

Citi® Platinum Select® / AAdvantage® World MasterCard®
Earn up to 40,000 bonus miles. Earn 20,000 AAdvantage® bonus miles after you make $750 in purchases within 4 months of becoming a cardmember. Earn 10,000 AAdvantage® bonus miles after you make $10,000 in purchases during your FIRST year as a cardmember and 10,000 additional AAdvantage® bonus miles after you make 10,000 in purchases during your SECOND year as a cardmember. Plus, no annual fee for 12 months.

You could earn these bonuses by diverting dollars from other cards, or you could use dollars from your mortgage or income taxes that are currently paid by check.

Let's say you make four $2,500 payments in the first twelve months, and incur $329 in fees.

10,329 miles for spending $10,329
20,000 miles bonus ($750)
10,000 miles bonus ($10,000)
40,329 @ $0.00816 per mile

One other thing that I just thought of:

[Dishonest mode on]

If you are a business owner, and put through a large amount of charges every month, you could easily put another 3 or 4 thousand on the card and "forget" to list is as income at then end of the year. One of my customers has on average $175,000 to $200,000 on his business card every month (him and 10 or so users) it's his business so it would be a simple matter for him to take almost another $60,000 out of the business a year and not pay taxes on it.

[Dishonest mode off]

The above would have very limited application in the world but I could see it being useful for some people.

-Dave

Including a signup bonus is kind of dubious, unless you are a serious churner.

In what sense is it dubious? There is nothing about CardIt's program that says the customer must setup a recurring transaction. Make four $2500 payments, spend $329, collect 40,329 miles. Game over.

Want to play again? Use this one...

With the Citi CashReturnsSM MasterCard®, you’ll earn 5% cash back on all purchases for 3 months

I consider it dubious because 99.9% of consumers don't get a new credit card every 3-6 months as required by your schemes.

Also, the 20,000 for $750 seems ridiculous to count toward CardIt because there are a lot easier ways to rack up to those $750 minimums, such as everyday spending. Personally, I would only count miles I would not have earned otherwise, and a signup bonus does not fall into that category.

We are in complete agreement. My idea is to apply for one, and only one, card. Use it for four transactions. Done. These are miles I would not have earned otherwise because it uses dollars that are currently disbursed by check, rather than dollars that are already run through another card.

It makes no difference to me whether you like the idea, but please explain if you think my arithmetic is incorrect: 40,329 miles for $329 extra dollars.

Your arithmetic is fine if you wouldn't have gotten that card without CardIt, but I personally wouldn't apply for a card just to use for a few mortgage payments when I already have enough trouble keeping my total Citi cards below their allowable limits (in terms of # and frequency of applications). There's an opportunity cost to signing up for an AA card.

Thank you for the clarification. There certainly is a case for spending $750 to collect 20,750 miles and ignoring the rest, but this is a quirk of the ineptly designed offer. In any event my purpose was primarily to illustrate a different way of thinking about CardIt as a tool for extracting value from bonus offers, without disrupting one's normal pattern of accumulation.

I play the arbitrage game of taking funds from 0% or low percentage introductory credit card offers and putting them into high-yield savings or other investment accounts. CardIt and other similar services would assist in this arbitrage game only for the C/C's that offer 0% on new purchases but not on balance transfers, and my experience has been that most cards offering 0% offer it on balance transfers, not purchases, though some offer 0% on both balance transfers & purchases. So CardIt seems to be of limited utility for this purpose.

The cardit site seems to be down now in terms of payment steps, at least for Wells Fargo. I just get a system validation error message. Jake, any problems?

So if you had a $1,000 mortgage, you could use this service and get, say, 1,000 miles, for the cost of $44.89.

Or, you could send flowers from USAir->FTD, for $45 and earn 945 miles (900+45 for card spend). - free flowers, and no worries about a new company having a mix up that ends up with a late payment and mark on your credit report.

Maybe this makes more sense for someone with a million-dollar mortgage, but not me.

We are up and running. There may have been some routine maintenance going on.

Thank you for checking with us - safe and comfortable flying everyone!

- Jake