anybody know if mortgage (or rent) payments can acrue freq flyer miles? i'm thinking about using a credit card to make the monthly realty payments. i may be dreaming on this one, though, since i heard credit card companies are likely to count mortgage/rent payments as a "cash" transfer/exchange because an actual product or service is not being purchased in that case. we could all earn a boatload of points each year, though, if it does acrue points.

let me know.

thanks,
fm

This isn't really CO related, and therefore it belongs in MilesBuzz, so over it goes. I would suggest that doing a search on "mortgage" will turn up LOTS of prior discussions about this topic.

Xyzzy
CO forum moderator

(edited by DaDOK)

Every so often someone will ask this question. The thought of shelling out thousands of dollars a month and not getting miles/points seems so . . . wrong! And such a waste.

However, I think the general consensus is that no bank will accept a mortgage payment by CC. IF there is an isolated bank out there, someone here on FT would have shouted from the rafters about it.

And BTW, I disagree with you the reason is that "an actual product or service is not being purchased". You are purchasing the right to live in the home until it is paid in full -- not much different from anything else you buy in installments. For instance, if you buy a $6,000 home theater in installments of $100/month for 60 months/5 years (likely more $$ to account for interest), you don't technically 'own' it until the loan is paid in full. Yet those electronic companies accept CC's as payment. I think banks don't accept them because that's the way they've always done it.

There was an article recently in an Austin paper discussing this topic. It was noted that more apartment complexes are accepting cc's for rent payments. The comment was that the mortgage industry was monitoring this for the future. Several issues involved here...the mortgage co. would lose 2%+ in fees plus it could get some homeowners in trouble with their cc's by not properly covering their cc bills after making mortgage payments.

Maybe in the future...

Kind of, but there's a very valid reason for the policy.

A mortgage is usually the homeowner's largest debt, and the banks don't like the idea of you paying for secured debt (mortgage) with unsecured debt (credit card). Yes, you may be doing it just for the miles, but most people don't pay off their credit card debt monthly (another discussion entirely).

In any case, it is impossible for the bank to know if you are using the card because you don't have the cash or just to get the miles. By requiring "cash" payments they get the earliest possible indication of any potential problems with your mortgage.

It's good business practice on such a large debt. As such, miles for mortgage payments remains the Holy Grail of free travel.

I suspect that some marketing department will eventually work out a program, but probably the tradeoff will be a higher interest rate or service fees, as is currently the case with all the miles for mortgage programs now where you get miles when you consummate a loan.

Not exactly the answer you're looking for, but you can always buy CharterOne gift certificates with your mileage card, then turn them into a money order in the amount of your mortgage payment and mail in the money order as your mortgage payment.

It's cost. Plain and simple. Visa and MasterCard generally have a 2% fee, payable by the merchant. This would be a significant incremental cost to servicing a mortgage.

As to late payments and creditworthiness - there's nothing stopping customers from making mortgage payments with cash advance checks from credit card accounts. In fact, in most cases, I'd expect the check could qualify for "balance transfer" pricing (if such a special is being offered on your card) as many mortgage checks are made payable to a bank or other financial institution.

Rather than making your check payable to "Citibank Mortgage," make it payable to "Citibank" - they'll accept the check. This would be difficult for the credit card bank to decipher - and credit card issuers may give you more favorable treatment (fees, rates, etc). One thing to keep in mind, if your mortgage and credit card are with the same bank, banks won't usually accept checks drawn on their own credit accounts for payment (but they will accept checks drawn on other bank's credit accounts).

I'm also a residential landlord. I've thought about accepting credit cards for rent - but again, the cost is prohibitive. The benefit of being able to just plug in the tenant's account number into the machine on the 1st of the month is very attractive, but with an average rent approaching $2,000/mo, it's not worth $480 year ($2,000 x 12 x 2%) per unit to me. Not by a mile.

Seeing as the majority of posters here are Americans, this will be irrelevant. It does apply to the Canadians though.

CIBC offers a mortgage called the Aerogold mortgage. I think you get a point a dollar paid in payments. The points accure to Aeroplan. The drawback to the mortgage, is that rate is not discounted, you pay the posted rate, typically 1.25% above the discounted rate. This makes for very expensive points. All in all, a very "gimicky" mortgage and not worth taking.