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Use Credit Card Rebates To Help Pay Off Your Home Mortgage Loan Principal

Published 1/13/08 (Modified 12/19/13)
By MoneyBlueBook

Editor's Note: Thank you for your interest, these offers have expired and are no longer available.

One of the biggest problems and common complaints of using rebate credit cards is the reward program's propensity to encourage overspending. Finding a reward credit card is easy and particularly with cash back cards, redeeming rebates is a breeze. But the problem is - are you putting your cash back earnings towards the right type of expenditures? Credit cards that offer airline miles or redeemable gift cards are certainly wonderful, but they don't do much to encourage the right type of spending or the development of responsible money habits. Citibank's Home Rebate Platinum Select Mastercard is a unique card that tries to change all that by helping you automatically put those rebates towards something important and worthwhile - the mortgage loan you have on your house or condominium.

Automatically Pay Down Your Home Mortgage Principal Using the Citibank Home Rebate Card

If your current card reward program is only going to encourage you to spend beyond your means on things you don't need, you should definitely take a look at the Citibank Home Rebate Card as a serious alternative. It's not the sexiest or fanciest of rebate cards, but it's uniquely practical and well suited for home owners and those who want to be more responsible with how they spend their rebate dollars. The card automatically reallocates all earned rebates towards paying off your home loan principal. Paying down principal is better than paying ahead on your mortgage because by paying down the principal, you lower the total amount of interest you pay, and may be able to shorten the duration of your mortgage by months or even years on a standard 30 year mortgage.

With the Citi Home Rebate Platinum Select Card, cardholders earn a 1% rebate on all eligible purchases. Once a year, the rebate you've accrued is automatically sent to your mortgage company and applied to your loan principal. This is the reason why the Citi Home Rebate Card is so popular - it helps people bypass the temptation to redeem rewards and rebates for things they don't really need, and it also helps to rein in their overspending habits. The card is a useful tool for those trying to adopt a more frugal and responsible lifestyle.

Although not nearly as versatile or universally available for all applicants, similar programs can be found for specific mortgage companies, including the Countrywide Credit Card - Rewards Platinum Visa - ($50 payment to mortgage principal for every 2,500 points earned), and the GMAC Mortgage Equity Rewards MasterCard ($25 payment to principal for every 2,500 points).

Charge Your Monthly Home Mortgage Payment Using An American Express Credit Card And Earn Rebates

In a significant but fairly recent development, at least one credit card company has joined forces with members of the mortgage loan industry to give card holders the ability to pay monthly home mortgage payments using their credit cards, including ones that even offer cash back and reward rebates. American Express started the trend earlier in May 2007 by inking partnership deals, first with American Home Mortgage, and later with IndyMac Bank. Currently, the offer is only available to those that have new or refinanced home mortgage loans through these lenders, but it's reasonable to expect the program to be expanded in the coming future.

Under the new American Express partnership called the Express Rewards Mortgage Program, partner lenders like IndyMac have agreed to accept American Express reward credit cards for mortgage payments. The arrangement is only available to eligible consumers taking out a new or refinancing an existing prime home loan through partner lenders. Borrowers must pay a one time fee of $395 to the lender at the time of closing, but depending on the American Express reward card you decide to use to make the monthly payment as well as the size of your monthly mortgage payments, the upfront cost can be recouped fairly rapidly, within 1-5 years, a relatively short time in typical mortgage years.

For mortgage loan owners who usually pay hundreds, sometimes thousands of dollars on their mortgages every month, just imagine how many reward points you can earn! Since the mortgage payment is typically the largest monthly cost for most people, being able to charge the payment to your card is a tremendous windfall in terms of earning cash back rebates. Let's say your monthly mortgage obligation is $2,000 a month and you charge another monthly $1,000 for living expenses. By tacking the entire amount onto the American Express Blue Cash Card for example (probably one of Amex's most popular high rebate percentage card), you could easily earn a cash back rebate of more than $400 a year. The amount you can earn can be substantially even more if your mortgage or expenses are even higher. It works because with the Blue Cash Card, once you've charged $6,500, you get to earn the bonus rate of 1.5% back on further purchases (and as much as 5% back on any charges for groceries, gas, or drugs).

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11 Responses to “Use Credit Card Rebates To Help Pay Off Your Home Mortgage Loan Principal” 

  1. SanDiegOh says:

    Great post Raymond. I think these are great options for people who tend to overspend and especially for those who are in interest only loans. Thanks for the info.

    Denny Oh

  2. sue says:

    Thanks for the great idea for the credit card rebates. I have a rebate coming to me that I am not sure how to apply it. 1) retail card 2) cash back or 3) apply to my current statement balance. (don't have past due amount). Applying directly to my mortgage would be another option to help pay it down faster.

  3. sue says:

    sorry my website was listed as an error in the post above

  4. SavingDiva says:

    I think it's kinda scary that people will be able to pay their mortgages with credit cards...

  5. Robert D. Ashby says:

    While using rebates to pay for your mortgage helps some, I would rather see rebates used for investment purposes. I am not talking about savings accounts like they already have, but help people invest in college and retirement funds that can be more beneficial to them than paying off their mortgage. Americans have a more serious issue with retirement planning than paying off mortgages.

  6. Chris says:

    Beware of GMAC equity rewards card if you transfer a balance!!! In fact I would not recommend it at all. You will be hit with the oridinary transfer transaction fee which will in fact be your first purchase with them. After that you will be stuck paying finance charges untill you have your ENTIRE balance paid off. Con Artists at their best. They should be sued.

  7. Wallace says:

    The company that called phone is 971-285-3130. I'm trying to determine their integrity. How do I check?

  8. Raymond says:


    Are you posting this question on the right article? If you're talking about spam phone calls...try Googling the number to determine the origin. Or you can try calling back but add a *67 to hide your phone number from view.

  9. Lonnie says:

    Great Article....very informing

    I wanted some extra miles so I tried it. I payed my mortgage by credit card through this website called Chargesmart. I was kinda iffy about doing this, but it worked. The fee is an issue so i won't do it to often, but it doesn't hurt to do it every now and then.

  10. Dave says:

    Great post, though some of it is outdated. The express rewards program from Amex is gone and the company i used to use to pay use went under. An earlier poster mentioned chargesmart so i tried that last month and it worked pretty well actually. the fee was an issue but it was lower than what i paid with a cash advance so ill prob do it again next month. it took 2 days for it to arrive and came in like a wire transfer... not too bad overall.

  11. Nathaniel Viall says:

    Yes You Can!!! I also have bad credit and was looking for land and a home. I got a FHA loan. Just got approved last week. I was able to get 3 acres and a brand new double wide. Yes I did have to put a down payment but it was small. Good thing is that everything else is included in the loan. Check with your local banks.

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