7 Novel Ways to Use Credit Cards for Real Estate Investing

by | BiggerPockets.com

Who doesn’t like credit card rewards?

For that matter, who hasn’t dreamed of swiping their next real estate investment on their credit card?

While title companies sadly don’t accept credit cards, there are still ways to use your credit cards to pull cash for real estate investments. A quick word to the wise, though: These techniques may not actually cost less than more traditional loan sources. Not only are credit cards usually expensive, they come with their own risks, from immediate cancellation to debt spiraling and a cut financial safety net.

Swim at your own risk!

1. Use the prepaid debit card/money order trick.

This has been floating around the Internet for a few years now and still seems to work. At a retail store, you buy a prepaid debit card along with your groceries and put the entire purchase on your credit card. You then use the prepaid debit card to pay for a money order… made out to yourself. You deposit it at your bank, and voila! You have cash, where before you had plastic.

Of course, the prepaid debit card itself might include a small fee, and the money order will probably cost $1 or so. But if you can find prepaid debit cards with high enough balances, it may be worth the trouble.


2. Load up on PayPal “My Cash” cards.

Heard of these? A variation on the tactic above, they’re reloadable debit cards linked to your PayPal account. You buy them at retail stores and load money onto them, and that money then transfers to your PayPal account.

There are limits, of course. Each card can only be loaded with up to $500 at a time, and there’s a monthly maximum of $4,000. Each card also costs $3.95.

Still, it’s a useful and cheap way to move $4,000 from your credit card to your PayPal account (and from there, to your checking account) each and every month.

3. Pay directly for materials when renovating.

It’s amazing more real estate investors don’t do this. To begin with, many contractors pad their materials estimates, so paying for labor only will save money immediately. After a contractor gives you a quote for a renovation job, tell them you’ll pay them for labor but will pay for the materials yourself.

Ideally, go with the contractor to the supplier to keep an eye on what materials you’re paying for. If you have 100 percent trust in the contractor, the cashier can simply call you when the contractor is at checkout, and you can give the cashier your credit card information.

Related: Planning to Pay Taxes With Your Credit Card? Stop! And Read This.

Remember to always collect receipts from the contractor, to check the materials purchased, and to keep the receipts for tax season.

4. Use contractors who accept credit cards.

Some contractors do, for a fee (usually in the 3-3.5% range). It can make sense to do if you’re short on cash for the renovation project or if your mortgage lender is willing to lend money for the purchase but not for additional renovations.

Just be sure to have several contingency plans in place to pay this money back to the credit card company. Quickly.

5. Actually use those convenience checks.

Many credit card companies periodically mail cardholders a few “convenience checks,” which are checks paid from the credit card balance. They come with fees, but sometimes these fees are mitigated by 0% interest for an introductory period. If the up-front fee is only 3-4%, it may be worth swallowing that fee in exchange for no interest payments due for the next year.


6. Stockpile cash and credit card debt, then balance transfer to 0% APR.

You may not be able to put your real estate purchase on your credit card, but you can put nearly every other expense on your credit card and stockpile cash for a few months. The problem with this method is that you rack up a bunch of expensive credit card debt.

Fortunately, credit card companies offer enticing introductory 0% APR periods to persuade you to sign up. Once you’ve stockpiled the cash you need, open a new credit card with a long introductory 0% APR period for balance transfers. Then it’s simply a matter of transferring your credit card balance to the new card, where you won’t have to make interest payments for up to 15 months.

7. Consider just eating the cash advance fees.

Credit card companies typically charge 3-5% for cash advances, which is no picnic to pay. But mortgage lenders charge their own nasty fees, from junk fees like a $495 “processing fee” to lender points. Conventional mortgage lenders also take 30-60 days to close, regardless of what the 24-year-old loan officer promises. Credit card cash advances are instantaneous.

And hard money? Most hard money lenders charge just as much in points as the credit card does, plus junk fees to boot.

If you’re buying an $80,000 property and have three $30,000 credit cards, it will probably be faster and may even be cheaper to use a credit card cash advance than a hard money lender. At least you’ll get some of the cash advance fee back in the form of reward points.

Related: How to Be Smart About Credit Card Debt When You Have Student Loans

Credit cards are dangerous tools, but they can still be powerful when wielded effectively. Because they serve as a backup source of funds for most of us, it’s doubly important to be careful not to overextend on debts and to have another emergency backup available. Real estate investors also need both a primary and at least one contingency exit plan for paying these debts back quickly.

Happy swiping!

Ever used credit cards in your real estate investing? Want to tell us juicy details about the vacation you want on after your last house flip, paid for entirely by credit card rewards?

Well, probably not, but we’d love to hear your experiences and thoughts anyway!

About Author

Brian Davis

Brian is a landlord and long-time rental industry expert, who offers a range of free landlord resources through his company, SparkRental. Grab a state-specific lease agreement or take our free mini-course on buying 2-4 unit rental properties while you’re at it.

Message me if you’d like me to write for you about real estate or personal finance!


  1. Dean C.

    Nice article. I’m not sure I understand #1 though. Is this really just a tactic to get cash out of a credit card while avoiding that hefty charge in the event you actually used the ‘cash advance’ option?

  2. Erin Korniyenko

    Manufactured spending meets real estate! For those in the military, use the SCRA to get really low rates and sometimes pay no fees (even cash advance fees) while you’re active. Barclaycard, for example, charges 0% and no fees until you retire/separate. I already planned on using some of these in that capacity to at least provide for a down payment or two. Good stuff! Though I would say this is for the extremely disciplined, not a beginner or someone who doesn’t actively budget and keep track of all the new due dates they will acquire with this method.

    • Brian Davis

      Great points Erin! Very true about these techniques being for the disciplined. One thing to note about using a cash advance for the down payment – mortgage lenders don’t like it, and may require you to pay down the card balance before approving your loan. Just something to be aware of as you move forward.

      • Erin Korniyenko

        I was able to write myself a cash advance check with one lender after they had pulled my credit for a loan. This lender didn’t care how I came up with my down payment as long as I had enough cash in various accounts to cover the down payment and the reserves needed for my 5 rentals (my IRAs always satisfy this). One option I was going to use in the future is to just season the funds, so take out a cash advance 3 months before I need it. My lender only requires 2 months of bank statements, so this would work. I have 6 years to use this option with Barclaycard with zero fees, and only minimum payments due. Of course I am going to have things paid off well before then, but I like the “free” money.

        • Brian Davis

          Nice! Seasoning can work wonders.
          Six years with zero fees? That’s a helluva card.
          Glad to hear you’re having some luck with drawing funds from credit cards for your real estate investments, hope you’re also racking up a few rewards for good measure!

  3. Syed Hussain

    Great post! There are tons of ways to “hack” credit cards for rewards for personal use, and there are so many more for business use. You can also get new cards periodically with sign up bonuses. Since most investors spend money on contractors and materials, those bonuses can really add up!

    • Brian Davis

      Thanks Syed, and so true about taking advantage of signup offers. Cardholders will also be offered higher and higher-end cards, with better benefits, as they spend heavily on cards and pay off balances regularly. Some of the really high-end cards offer some crazy benefits, you hear rumors about concierges doing outlandish services for cardholders. Real estate investors are definitely in a better position than most to take advantage of credit cards!

  4. Avi Garg

    #1 and #2 have been around for a while but you should have put caution. Not every store will let you buy pre paid card with credit card and even if you get it, its very difficult to liquidate. Always try with small amount first to prove concept.
    These have done for years and many stores are not allowing them anymore. So don’t get stuck with thousands of $$ in pre paid cards

  5. Tyler Huntington

    Seems like a good way to pay for a mortgage also, Citi double cash on a $2k mortgage =$40 a month. But like Avi said, must try with smaller amount first. Also, if you tried to do this for a down payment on a property (unless paying for full in cash) a lender would ask for sourcing docs and a copy of a money order would more than likely not fly. (anti $ laundering)

    • Brian Davis

      Yeah mortgage lenders don’t like to see any part of the down payment borrowed, and ask several times about it on the 1003 (mortgage application). They also don’t like to see high credit card debt, so there’s a good chance they would require that the credit card balance be paid off as a condition of funding.

  6. Casey Murray

    My AmEx gold card offers way more bang for your buck when booking flights, etc by going through the AmEx points reward website. You sell yourself short by applying points to charges. Just a thought after racking up all the credit card points!

  7. Hello Brian,
    Great article with lots of good tips. I was wondering how I could use my good credit to help me acquire properties faster. We’re definitely going to try at least one of your tips. Thanks and keep writing.
    From Nancy

    • Brian Davis

      Thanks Nancy! To buy properties faster, you might want to talk to some commercial lenders about bundled property loans. Another option to explore is crowdfunding websites like RealtyShares or PatchofLand. But a word of caution: before you scale up your acquisitions, be sure to get at least 5 (preferably 10) profitable deals under your belt.
      Best of luck!

  8. Ashley Wilson

    Great article! One tip you gave that we take a step further is #3. For example, where we buy our lumber, you can create a business account. That company only bills you at the end of the month. So it delays the needed cash for the purchase. Once we get the bill, we pay it with a credit card, which in turn delays the payment by another month. Then once we receive the credit card monthly statement (which can sometimes be up to a month later), we pay it off. By doing this you can delay cash out (and thus interest on your loan if using financing, or cash out if paying for the whole job in cash) by almost 2 months!!!! If you are doing a quick flip, you may already have the house under contract, or even possibly closed and you still have yet to pay the rehab bill, nor interest on it!

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