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Mortgages & credit cards-- there has to be a catch
Old 05-07-2004, 09:56 AM   #1
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Mortgages & credit cards-- there has to be a catch

This can't be a new idea but it certainly is over caffeinated.

Our mortgage payments are automatically deducted from our credit-union checking account each month. This puts a fairly high average balance in our lowest-interest account.

Theoretically I could charge the mortgage to my credit card, also theoretically generating a 1.5% annual rebate. Assuming the credit union lets us get away with it, would the credit-card company declare it an "unauthorized transaction" ineligible for the rebate? I've parsed my cardholder agreement for the M word (no hits) but it includes vague prohibitions on "finance charges", "balance transfers", and other potentially mortgage-related terms. I'm pretty sure the company wouldn't hesitate to declare an unauthorized transaction when it thinks it sees one.

Yes, it's only $25K/year, but that's $375 (about half a longboard) and the percentage rebate can significantly affect the bias of the mortgage vs investments reciprocated diatribe.

Any experiences or advice to report before I take aim at this windmill?
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Re: Mortgages & credit cards-- there has to be a c
Old 05-07-2004, 10:06 AM   #2
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Re: Mortgages & credit cards-- there has to be a c

It's unlikely your CU would let you pay via credit card since they have to pay merchant fees. * However, for some odd reason, PenFed let's me use a CC to buy CDs, which I do regularly.

I get the full rebate, and I've only had to argue with my credit card company once. *(They don't rebate balance transfers, and the CD purchase got coded as a "deposit", but I convinced them those are very different animals.)
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Re: Mortgages & credit cards-- there has to be a c
Old 05-07-2004, 05:14 PM   #3
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Re: Mortgages & credit cards-- there has to be a c

Here is something you might try. I read about this in the Journal a few months ago. I have not tried it, but an acquaintance has and he said it worked just fine.

Step 1: Buy gift cards from www.charterone.com/giftcards. Pay for these cards with a Visa or Mastercard that gives you frequent flier miles or points or a rebate for your purchases. Limit is $2,500 in cards each month.
Step 2 : Use your gift cards to get money orders at the Post Office, after checking that your PO will do it. Otherwise, find another source for money orders.
Step 3 : Use the money orders to pay mortgage.
Step 4 : Repeat monthly.

Would that work?

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Re: Mortgages & credit cards-- there has to be a c
Old 06-13-2004, 06:50 AM   #4
 
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Re: Mortgages & credit cards-- there has to be a c

I've never bought a CD with a credit card. However, I am still getting offers for -0- % promo CC rates. So far,
I have been able to take this money and keep it in play
at 3%, less the CC fee and any taxes due (typically
I pay none). Normally the promo bank rates run 90 days.
Then I have to find a new bank. I usually stay pretty
close to home, but it does require some searching.

JOhn Galt
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Re:  Thanks, GDER
Old 06-13-2004, 10:11 AM   #5
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Re:  Thanks, GDER

I've found plenty of people at NFCU who know how to say "No!" but I'm still working it.

We'll give your advice a try too... of course the risk is that one missed deadline wipes out most of the profits. Kinda reminds me of working again!

I can understand keeping a good credit score if I wanted to borrow money, but we've only done that for home purchases and I don't see doing more of that anytime soon-- if ever. And it seems that the more money I run up on credit cards, the more they raise my limits. Why didn't this happen during my working years?!?
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Re: Mortgages & credit cards-- there has to be a c
Old 06-13-2004, 05:15 PM   #6
 
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Re: Mortgages & credit cards-- there has to be a c

My credit is golden. I've made a pile of money
playing around with the CC promo rates (hey, I'm retired
and have time to spend on this stuff). However, no one will issue me a new card now. Between my total
cards/credit outstanding and the number of "hits"
to the credit tracking agencies, I am persona non grata
even though I am a no-risk customer. NO complaints
though. They have to folow rules and can't make
exceptions for everyone with a "story".

John Galt
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Re: Mortgages & credit cards-- there has to be a c
Old 06-18-2004, 01:00 AM   #7
 
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Re: Mortgages & credit cards-- there has to be a c

It's good to find a few other folks that think they can outsmart the CC companies.....so far I've been "burned twice by the ultra-low offers:

1st time everything was goin great until my payment arrived at 12:15 instead of 12 noon and the jacked the rate up on me to >20% (fortuneately, I had the cash to pay it all off)........I learned that I must use the recurring payment feature on my online banking account.

2nd time was just last week when I figured out that all my payments are going to the low interest balance while the remaining balance and new purchases are "stuck" at the normal rate......next time I will make sure the card has zero balance before I initate the promo rate feature and will not make any purchases with that card.

So far, I feel like my record (won/lost/tied) is 1/1/1 and I currently have two accounts running that should work out for me.
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Re: Mortgages & credit cards-- there has to be a c
Old 06-18-2004, 05:22 AM   #8
 
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Re: Mortgages & credit cards-- there has to be a c

Hello jazz! I only use the cards that I never touch for anything else (I have a pile of those), and I routinely pay
their bills as I receive them, so there is no chance
one will arrive late (which is one of the things they are
hoping for). A slight additional advantage to these
offers is that it shows activity in what otherwise
would be dormant CCs, thus reducing the chance
they will get cancelled
due to inactivity.

John Galt
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Re: Mortgages & credit cards-- there has to be a c
Old 06-19-2004, 04:09 PM   #9
 
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Re: Mortgages & credit cards-- there has to be a c

Maybe if I had found this forum earlier, I would not have had to learn the hard way!

I also have a few accounts that I don't need/don't use, so I am converting to the strategy you mentioned. I agree it's a plus to have some activity in these accounts

I have noticed the promo rates are a bit higher lately, but the terms have streched out from 4-6 months to "till paid off".....I wouldn't touch anything less than 12 months.
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Re: Mortgages & credit cards-- there has to be a c
Old 06-19-2004, 04:14 PM   #10
 
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Re: Mortgages & credit cards-- there has to be a c

Hey John Galt....you in DC (like me)?

How about credit union share-secured loans?

My CU account only pays 1%, but I can borrow upto current balance @ 3.5 % (which means I am actually paying 2.5%).........which is pretty good for some expenses, but on the other hand, they are charging 2.5% for me to use my own money....at least if gives me some flexibility
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Re: Mortgages & credit cards-- there has to be a c
Old 06-19-2004, 04:20 PM   #11
 
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Re: Mortgages & credit cards-- there has to be a c

Hello jazz.............If your credit limits are high enough, you don't need a year to make money. An example...................Let's say you have a $20,000
credit limit and can get it for 6 months at -0- %.
If you can get 3%, that's $600 per year, or
$300 for 6 months, less a fee which may be capped
at $50.00, so you net $250.00 which might be tax free,
depending on your situation. Too much bother?
Let's suppose you have 5 or 6 cards which offer you
-0-% Now you are talking some serious money.
You do the math.

JOhn Galt
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Re: Mortgages & credit cards-- there has to be a c
Old 06-22-2004, 02:35 AM   #12
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Re: Mortgages & credit cards-- there has to be a c

Quote:
I am still getting offers for -0- % promo CC rates....*Normally the promo bank rates run 90 days. Then I have to find a new bank.
I got what I consider a great deal from my existing account at Citibank when combining my son's college credit card bills -- 4.9% until paid off! Friend got the same deal but at 2.9% -- 'course he didn't have a Citibank Visa until the offer. Asked if they would lower my rate to 2.9% and they said 'no.' If I can find a lower non-expiring rate before son pays this off, I'll transfer.
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Re: Mortgages & credit cards-- there has to be a c
Old 06-22-2004, 03:23 AM   #13
 
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Re: Mortgages & credit cards-- there has to be a c

I have not had much luck getting the CC companies to
alter the terms of these offers. I've tried at various times to get a better rate (than offered), getting an
extension of the rate, and getting a credit line increase
to make their deal more attractive. Being a new
customer by virtue of signing on for the deal would hlep I think. Best I've been able to do is get them to
combine existing accounts (where I have multiple cards)
so that my max. availability goes up on the card
offering the "deal".

John Galt
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Re: Mortgages & credit cards-- there has to be a c
Old 06-22-2004, 07:49 AM   #14
 
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Re: Mortgages & credit cards-- there has to be a c

Hi GDER! Man, I never got that ZFL offer. Such a deal!

I have had some luck in the past applying a little gentle pressure (the "cancel" word), but mostly these
low interest promo offers are pretty hard to get
"adjusted". I have one running with Discover right now.
When it runs out, maybe I'll see if they will give me a ZFL
deal. Another thing I've noticed is I've received a deal
in the mail and passed on it because it was not attractive enough. A month later, here comes a better
offer from the same company. I have accounts open from -0- up to 1.99%. Sometimes the interest diff.
in your pocket is quite small, but it all adds up. A
couple of times I took a deal at around break-even
just to have the cash available for a few months.
Of course the interest I earn is taxable income, but
I typically pay no taxes, so that's not a factor.

John Galt
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