Paying a mortgage on a 0% Purchases Card 8 March 2016 at 3:32PM edited 8 March 2016 at 3:33PM in Stoozing: free cash from credit cards 7 replies 3.1K views

Richard019

EDIT: Paying a mortgage on a 0% Purchases Card or a cashback card

I know people paying their mortgage on their credit cards is often used in surveys as a marker for how well off the country is, ie more people doing it suggests more people are struggling with money. Is this just because it suggests they don't have the money to immediately pay their mortgage, or is putting a mortgage payment on a card a horrific idea because it would count as a cash advance? If it counts as a purchase it could also be a good thing as you could either earn cashback or put it into your stoozing pots (or both) to boost the income from this.

I've identified a couple of things I (or anyone else) would need to consider before doing this, but I don't know the answers to them and would appreciate if anyone more experienced could suggest any considerations I'd missed in terms of the implications/practicalities of doing it:

1) What is it classed as when you do it? - purchase is fine, anything else and I suspect it's not worth it (money transfer I might as well just do it direct to the bank rather than over complicating it adding in the mortgage account, cash advance is totally unviable)

2) If it's generally seen as an indicator of poor cashflow, what impact would there be on my credit file, and how would other lenders react if they could even see (it just says regular payment as far as I can see) - as I don't expect to need another mortgage deal after the one I get next year (which I'd get in place first) I'm not too concerned about it impacting on future applications for mortgages. I'll always have the money in place to pay off the balances so being able to transfer in future isn't a problem for me either if I've made a good amount in the meantime. If it raises a red flag and nobody will provide me a card whilst I'm doing it, or worse existing cards start cutting my limits then it's at best pointless, and at worst reducing my existing profits.

Once I've worked out if it's viable or not it's then a case of looking at the profitability, and at that point you're just looking at it like a standard purchase so I'm not really worried about having missed anything there.

zx81

Most lenders won't accept card payments unless you are in arrears.

Whether it is classed as cash or purchase will depend on your card and how they categorise the third party.

Richard019

Oh well, guess I'll have to think of other ways to maximise my stoozing then. Thanks for the reply though.

HappyMJ

Richard019 wrote: »

Oh well, guess I'll have to think of other ways to maximise my stoozing then. Thanks for the reply though.

zx81 did say "most" lenders. "Some" lender do accept payment by credit card. Ask and see if yours does.

It does not show up on a credit report that you pay your mortgage by credit card so won't affect your credit.

Fingerbobs

I was once told by a Nationwide customer advisor that mortgage payments could be made by credit card. I went away and worked out what I wanted to do, then phoned back to actually make the payment - only to be told this wasn't possible! Very, very annoying.

jonesMUFCforever

In all probability the only time mortgage lenders will accept credit card payments is if you are in serious arrears and under special control.

You won't be able to do it just to stooze.

Kendall80

jonesMUFCforever wrote: »

In all probability the only time mortgage lenders will accept credit card payments is if you are in serious arrears and under special control.

You won't be able to do it just to stooze.

However, you could use a long term low fee 0% money transfer card. Transfer your limit to a current account and use this to pay the mortgage.


Personally, i'm on a low mortgage rate so this would prove of little benefit to me but for those on 2.5% rates or more it could prove useful. A basic calc to work out if its worth it is to annualise the money transfer fee and compare to your mortgage rate.


Please note - I am not in any way advising such a course of action just merely stating a possible option. Personally, i've only considered using such a card for my SIPP for the tax relief.

jonesMUFCforever

Kendall80 wrote: »

However, you could use a long term low fee 0% money transfer card. Transfer your limit to a current account and use this to pay the mortgage.


Personally, i'm on a low mortgage rate so this would prove of little benefit to me but for those on 2.5% rates or more it could prove useful. A basic calc to work out if its worth it is to annualise the money transfer fee and compare to your mortgage rate.


Please note - I am not in any way advising such a course of action just merely stating a possible option. Personally, i've only considered using such a card for my SIPP for the tax relief.

You could do that but then you would have to pay the mortgage and the minimum on the card and find a way of paying back the capital on the card - IMO not the best way to save a lot.
If you have some spare cash then overpay the mortgage direct.