For some reason, certain people out there seem to think it’s okay to make their mortgage payments with a credit card.
While there are (possibly were) a few services out there that allow you to pay your mortgage with a credit card, it doesn’t make a lot of sense.
Credit cards tend to have variable interest rates, and if you miss a payment, the APR may skyrocket to the default rate, which is generally in the high 20%s.
Sure, you might have 0% APR for 12 months or longer, but what happens after that? And what about the related balance transfer fees.
There are also minimum payments to consider folks.
It’s not too smart to charge up a ton of money on your credit cards just because you think you can earn money elsewhere.
Balance transfer credit cards should be reserved for those looking to lower their APR, not to play a game of arbitrage.
Besides, fixed mortgage rates are at record lows these days, so why jeopardize a good thing?
The banks aren’t stupid – they don’t lend money out at rates below typical savings rates, at least not for more than a promotional period.
So as a rule of thumb, reserve balance transfers only to pay off other high-APR debt, like other credit card balances.
Never use them to rack up more debt, as the future is always uncertain.