Paying off your mortgage with your credit card? How's this work?

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Most banks won't take credit cards. Too many chargebacks or it puts the borrower in a worse position: trading low interest debt for high interest debt.

I'm curious why you would want to do this?

Hi @Miguel Caldera . It would technically be possible however I can't say I would recommend it, but I'll explain how you could go about through a hypothetical situation. Lets say the payoff for your mortgage is $100,000 and you currently only have $10,000 in available credit with one credit card. If you plan to payoff the mortgage with credit cards you'll either have to increase the credit limit on your one card or open several others to make up the $90,000 difference. For the sake of simplicity let's assume you have the income to support $100,000 total credit card limits. You call your bank to request the increase and now you have the $100,000 of available credit to pay your mortgage off. Now, there a few scenarios you're likely to encounter when you try to pay it off using a credit card.

1. They don't accept credit cards for payment

2. They have a maximum transaction limit for payment amounts over the phone

3. Your credit card company may have a transaction limit

4. They don't accept your credit card vendor (Visa, MasterCard, etc.)

I could be missing a few possibilities but you get the point. There are a couple things you could do to get around these. You could:

1. Complete a cash advance off of the credit card and put the funds in your checking account and then have a cashiers check cut and then bring the cashiers check to pay it off.

2. Make multiple payments over a period of a few days/weeks.

One thing you'll want to keep in mind is that doing a cash advance is even more expensive than making a normal purchase. The credit union I work for charges an additional 2% interest on cash advances. You'll also likely have to pay a fee to complete the cash advance. The credit union I work for only charges $2 per advance.

The scenario I gave you is extremely unlikely. If you are capable of somehow supporting $100,000 in unsecured funds then you likely have a mortgage higher than $100,000 (generally speaking). You'll also likely have to open more than one credit card as quite a few institutions won't offer credit limits that high. My credit union will only go up to $75,000. The more credit cards you have the less likely you'll be approved for another. Especially when done in a short time span.

Long story short, don't bother wasting your time trying to get enough credit cards to payoff a mortgage when you're better off financially with your mortgage.