topic Re: Maximizing Cash Back = 90% CL usage in Credit Cards

Maximizing Cash Back = 90% CL usage

Anonymous — Fri, 23 Jun 2017 21:49:18 GMT

I would like to maximize my cash back rewards and use my Chase FU to pay my mortgage. The problem is that it would temporarily put my usage at about 90% of my CL. I'm going to pay the balance in full as soon as the charge clears my Chase account so 3-5 days at most. Do you think that Chase would get nervous and reduce my CL, or would they be more inclined to increase my CL?

Re: Maximizing Cash Back = 90% CL usage

Anonymous — Fri, 23 Jun 2017 21:54:03 GMT

You're fine, especially youre paying it all off once the charge posts.

Re: Maximizing Cash Back = 90% CL usage

Anonymous — Fri, 23 Jun 2017 21:55:04 GMT

They will have no problem with it, if you pay it off every time.

It will not affect your scores, if they don't have time to report it (if it isn't there on the "cycle" day).

It shows them that you have things you want to put through the card, and over time that should push them to increase you. It certainly shouldn't hurt you.

If you're a PIF customer, then they make all their money off you from swipe fees. I do a similar thing with my rent - it goes on the Amex every month then gets paid once it "hits" - which can sometimes take forever (4-5 days to post after authorization), like they are hoping I'll forget and let it ride lol

In reality, I suppose it's the charge originator who holds the key to speed of settlement, but still, it's funny...

Re: Maximizing Cash Back = 90% CL usage

Anonymous — Fri, 23 Jun 2017 22:46:23 GMT

@Anonymous wrote:
I would like to maximize my cash back rewards and use my Chase FU to pay my mortgage. The problem is that it would temporarily put my usage at about 90% of my CL. I'm going to pay the balance in full as soon as the charge clears my Chase account so 3-5 days at most. Do you think that Chase would get nervous and reduce my CL, or would they be more inclined to increase my CL?

Is there a fee for paying your mortgage by CC?

Re: Maximizing Cash Back = 90% CL usage

Anonymous — Fri, 23 Jun 2017 22:51:33 GMT

I'm not sure, I've just been thinking about how to maximize my cash back and I thought about my mortgage first. I'll definitely look into whether or not I'd have to pay a processing fee. Depending on the cost, it might still be worth it.

Re: Maximizing Cash Back = 90% CL usage

Anonymous — Fri, 23 Jun 2017 23:08:53 GMT

@Anonymous wrote:
I'm not sure, I've just been thinking about how to maximize my cash back and I thought about my mortgage first. I'll definitely look into whether or not I'd have to pay a processing fee. Depending on the cost, it might still be worth it.

OK. It's very common for your mortgage server not to take credit cards at all, so for most people the option is to use a service like Plastiq, which may charge around 2.5%. Sometimes they have promotions and charge less, but otherwise, unless you have a UR transfer card and can get 1.7c per point transferring, you won't come out ahead

Re: Maximizing Cash Back = 90% CL usage

Anonymous — Sat, 24 Jun 2017 04:05:46 GMT

I'm actually surprised more mortgage providers don't accept credit cards. I get it that there are fees associated with these transactions, but if they pass the fees on to the account holder what's the big deal? I always thought it could only be a good think for the mortgage lender, as it gives the account holder another means to pay their bill. In a month where cash flow may be extremely tight, would the lender rather get paid or not get paid? If the answer is get paid (which it always is) you'd think they'd want to provide as many ways to the customer as possible to increase the probability of them paying on time.

Re: Maximizing Cash Back = 90% CL usage

Skymogul — Sat, 24 Jun 2017 05:56:55 GMT

@Anonymous wrote:
I'm actually surprised more mortgage providers don't accept credit cards. I get it that there are fees associated with these transactions, but if they pass the fees on to the account holder what's the big deal?

It's a sign you're in a debt spiral. If you need to make a mortgage payment on a credit card, you've already shifted all possible household expenses to credit just in order to make your debt payments. If you "need" to do this, you are in over your head.

Re: Maximizing Cash Back = 90% CL usage

mitchblue — Sat, 24 Jun 2017 10:08:39 GMT

From what I understand Mortgage companies used to take a CC as a payment.. They got screwed so they changed policies.

Re: Maximizing Cash Back = 90% CL usage

Anonymous — Sat, 24 Jun 2017 13:26:51 GMT

That's not true at all in this case.
The reason that was stated is that
Empiregoals is trying to get the most
out of his cash back credit card on a bill
that he is already paying anyway.
What's wrong with that ?

Nothing is wrong with that at all,
and he is smart for thinking that way.
Utilizing his cash back .

Re: Maximizing Cash Back = 90% CL usage

Gmood1 — Sat, 24 Jun 2017 13:39:20 GMT

@Skymogul wrote:
@Anonymous wrote:
I'm actually surprised more mortgage providers don't accept credit cards. I get it that there are fees associated with these transactions, but if they pass the fees on to the account holder what's the big deal?
It's a sign you're in a debt spiral. If you need to make a mortgage payment on a credit card, you've already shifted all possible household expenses to credit just in order to make your debt payments. If you "need" to do this, you are in over your head.

LOL..well I'm in some serious trouble.

I use it to boost my CC usage and put some spending traffic through my CC's. It has really helped with CLI's IMO. Plus I don't have to spend out of my budget in order to show usage.

Re: Maximizing Cash Back = 90% CL usage

dragontears — Sat, 24 Jun 2017 13:53:13 GMT

I think the key word in Skymogul's post is "need".
Do you "need" to use a cc to pay your mortgage for rewards? No, it is a "want"
Do you "need" to use a cc to pay your mortgage to "show usage to get CLI"? No, it is a "want"
Do you "need" to use a cc to pay your mortgage if you didn't have the money in your bank to pay it? This is what is bad, paying debt with debt.

Re: Maximizing Cash Back = 90% CL usage

Anonymous — Sat, 24 Jun 2017 15:34:55 GMT

Thanks for all the replies. It looks like the process will involve far too much. I wanted to just be able to use autopay but it's not an option.

I don't need to use my CC to pay my mortgage, but I would have loved to have the additional $1000 a year in cash back it would have given me 😀

Re: Maximizing Cash Back = 90% CL usage

NRB525 — Sat, 24 Jun 2017 18:22:05 GMT

@Anonymous wrote:
Thanks for all the replies. It looks like the process will involve far too much. I wanted to just be able to use autopay but it's not an option.

I don't need to use my CC to pay my mortgage, but I would have loved to have the additional $1000 a year in cash back it would have given me 😀

You pay $66,000 in mortgage payments in a year?

If you paid your mortgage through a website, you are looking at about $1,320 in fees for the year. But hey, it's $1,000 cash back, right?

Full disclosure I have paid at least half a dozen mortgage payments with credit cards, so I do not discourage anyone from doing so, just be clear how much you will pay in fees to do so, and make the conscious choice that it is OK to pay the fees.

Re: Maximizing Cash Back = 90% CL usage

Anonymous — Sat, 24 Jun 2017 20:11:28 GMT

Closer to $51,000 when I include insurance & HOA dues. However, as I stated in my previous post, it would be too much of a hassle even before considering any fees that might be assessed if I paid with a CC.

Re: Maximizing Cash Back = 90% CL usage

Anonymous — Sat, 24 Jun 2017 21:28:15 GMT

@Anonymous wrote:
I'm actually surprised more mortgage providers don't accept credit cards. I get it that there are fees associated with these transactions, but if they pass the fees on to the account holder what's the big deal? I always thought it could only be a good think for the mortgage lender, as it gives the account holder another means to pay their bill. In a month where cash flow may be extremely tight, would the lender rather get paid or not get paid? If the answer is get paid (which it always is) you'd think they'd want to provide as many ways to the customer as possible to increase the probability of them paying on time.

Credit card payments are also subject to reversal, a cardmember can dispute the charge and hold things up. There are also costs involved in passing on the fee on (you need to get the user to agree that they understand, your CSRs need to be trained etc). And also there are state differences into whether you can charge extra for using a cc. So my guess is that the companies don't think any potential benefit outweighs the costs, they can always charge a late fee anyway!

Re: Maximizing Cash Back = 90% CL usage

fliphusker — Sat, 24 Jun 2017 21:41:35 GMT

@Anonymous wrote:
Closer to $51,000 when I include insurance & HOA dues. However, as I stated in my previous post, it would be too much of a hassle even before considering any fees that might be assessed if I paid with a CC.

My house is paid off, but I assume like many others that there will be fees that go over what you would get back in rewards. I could put my taxes on my CC but I would lose $4 on my CDC by doing so.

But what I notice that many do not do is pay their insurance via CC and roll it into their payments. (Easier to deal with.) I am with Amica and I get a break by autopay each month, which I gladly pay with my CDC. I will take my free $30/year in cash back for a bill I have to pay anyway.

Not sure if your bank would even let you without boosting your interest rate, but worth checking into.

Re: Maximizing Cash Back = 90% CL usage

CreditInspired — Sat, 24 Jun 2017 22:03:37 GMT

@Gmood1 wrote:
@Skymogul wrote:
@Anonymous wrote:
I'm actually surprised more mortgage providers don't accept credit cards. I get it that there are fees associated with these transactions, but if they pass the fees on to the account holder what's the big deal?
It's a sign you're in a debt spiral. If you need to make a mortgage payment on a credit card, you've already shifted all possible household expenses to credit just in order to make your debt payments. If you "need" to do this, you are in over your head.
LOL..well I'm in some serious trouble.
I use it to boost my CC usage and put some spending traffic through my CC's. It has really helped with CLI's IMO. Plus I don't have to spend out of my budget in order to show usage.

+100

Re: Maximizing Cash Back = 90% CL usage

NRB525 — Sun, 25 Jun 2017 11:14:49 GMT

@CreditInspired wrote:
@Gmood1 wrote:
@Skymogul wrote:
@Anonymous wrote:
I'm actually surprised more mortgage providers don't accept credit cards. I get it that there are fees associated with these transactions, but if they pass the fees on to the account holder what's the big deal?
It's a sign you're in a debt spiral. If you need to make a mortgage payment on a credit card, you've already shifted all possible household expenses to credit just in order to make your debt payments. If you "need" to do this, you are in over your head.
LOL..well I'm in some serious trouble.
I use it to boost my CC usage and put some spending traffic through my CC's. It has really helped with CLI's IMO. Plus I don't have to spend out of my budget in order to show usage.
+100

Except that you are spending outside your budget. A mortgage payment should be expected to be a cash payment directly from a checking or savings account, with cash on hand, with no extra fees involved. That is ( should be ) your basis for your budget.

By using a credit card, you introduce a non-necessary fee to complete that transaction, that fee is spending outside your budget.

Now, on a decent rewards card, it usually works out to a wash; the rewards compensate for some of, may be almost equal to, the fee for paying the mortgage. So it looks like one is building rewards, but to be honest it's just pre-paying the rewards you get back later.

Again, my point is not to say "do not ever pay a mortgage with a credit card" since I have done it numerous times. The point is to be clear about the fees involved and understand that you are paying extra for this service.

Re: Maximizing Cash Back = 90% CL usage

Gmood1 — Sun, 25 Jun 2017 13:37:30 GMT

I have no extra cost incurred while paying with a CC. The service cost me 1.75% and I use a 2% cash back card( Citi DC) for the transaction. It doesn't cost me a dime to do it. So it's not outside of my budget.

Some folks were using the Citi AT&T for 3x or the Chase C$R. Both have been recoded not to give 3x points. For some reason they were processing as travel expenses. I'm not sure if Visa works with the service anymore.