Can You Pay Your Mortgage With a Capital One Credit Card?

For homeowners with a mortgage, making the monthly payment on time is crucial. Missed or late payments can result in penalties, damage to your credit score, and even foreclosure in severe cases. When money is tight, you may be tempted to rely on your credit cards to make ends meet.

But can you use a Capital One credit card specifically to pay your mortgage? No, you cannot directly pay your mortgage with a Capital One credit card as most mortgage lenders do not accept credit card payments. However, you can indirectly use a Capital One credit card for mortgage payments through third-party payment services like Plastiq, which charges a processing fee of around 2.5%.

In this article, we’ll take an in-depth look at whether or not you can pay your mortgage with a Capital One credit card. We’ll cover the logistics of how to go about making credit card payments toward your home loan, the potential fees involved, and the pros and cons of paying your mortgage with Plastiq. We’ll also explore some alternative payment methods to consider.

Understanding all of your payment options will empower you to make the smartest financial decisions for your unique situation.

What Is a Capital One Credit Card?

Capital One is one of the largest credit card issuers in the United States. Capital One offers a variety of credit card options, including cash back, travel, and balance transfer cards. Some of Capital One’s most popular credit cardsinclude:

• Capital One Venture Rewards Credit Card 
• Capital One Quicksilver Cash Rewards Credit Card
• Capital One Savor Rewards Credit Card
• Capital One Spark Miles for Business Credit Card

Like all credit cards, Capital One cards allow you to borrow money up to a certain limit to make purchases. As long as you pay your credit card bill in full each month, you won’t incur interest charges. However, if you carry a balance, Capital One cards tend to have relatively high variable APRs between 15-26%.

Can You Use a Capital One Credit Card to Pay Your Mortgage?

The short answer is no, you cannot directly pay your mortgage with a Capital One credit card. Mortgage lenders do not typically accept credit card payments for monthly mortgage payments.

This is because mortgage lenders would have to pay processing fees of 2-3% on all credit card transactions. To avoid losing profits to fees, nearly all mortgage lenders decline credit card payments.

However, there are some workarounds that allow you to indirectly use a credit card for mortgage payments, which we’ll explore shortly.

How Can I Pay My Mortgage With a Capital One Credit Card?

While you cannot pay your mortgage directly with a Capital One credit card, you can use a third-party payment service. This allows you to pay your mortgage by charging your Capital One card. 

The most well-known service is Plastiq. With Plastiq, you link your Capital One credit card information and use it to send payments to your mortgage lender. Plastiq charges a processing fee, usually around 2.5%, for this service.

For example, if your monthly mortgage payment is $2,000, you would pay:

• $2,000 for the mortgage payment amount
• $50 processing fee to Plastiq (2.5% of $2,000)

So your total credit card charge would be $2,050.

While the processing fee eats into your rewards, this route does allow you to pay your mortgage with your Capital One card. Just be mindful that Balance Transfer cards cannot be used with Plastiq.

What Are the Fees Associated With Paying My Mortgage With a Capital One Credit Card?

The main fee to be aware of when paying your mortgage via a Capital One credit card is the processing fee, usually around 2.5%. This fee is charged by third-party services like Plastiq for facilitating the transaction.

There are a few other potential fees to keep in mind as well:

• Cash Advance Fee: Capital One may charge a cash advance fee if your mortgage payment is not coded as a purchase by Plastiq. This fee is usually 3-5% of the transaction amount.
• Late Fee: If you do not pay your Capital One credit card bill on time, you may be charged a late fee around $40. 
• Interest Charges: If you carry a balance on your Capital One card, you will owe interest based on your APR. This is generally 15-26% with Capital One cards.

To avoid unnecessary fees, be sure to pay your credit card bill in full and on time each month when using this payment method. The processing fee is hard to avoid but the other fees can be prevented with responsible use.

How Can I Minimize the Fees and Risks Associated With Paying My Mortgage With a Capital One Credit Card?

If you decide to pay your mortgage with a Capital One credit card via a third-party processor, there are a few tips that can help minimize fees and risks:

• Pay your bill in full each month – This avoids interest charges and late fees from Capital One.
• Know your credit limit – Only charge what you can afford to pay off so you don’t risk maxing out your credit card.
• Consider rewards cards – The best Capital One cards for this purpose would be the Savor or Quicksilver that offer cash back to offset fees.
• Communicate with your lender – Let them know you will be processing payments through a third party to avoid complications. 
• Understand how it impacts your credit – This method can result in higher credit utilization if not paid quickly.
• Have a backup plan – Still have a way to pay your mortgage directly as a backup if needed.

With proactive planning and responsible usage, you can minimize the risks of this payment method. But it’s wise to consider it a last resort option rather than your go-to each month.

What Are the Benefits of Using a Credit Card to Pay Your Mortgage?

While it is not ideal, there are some potential benefits that make paying your mortgage with a credit card enticing in certain situations:

1. Earning Rewards Points

If you use a rewards Capital One credit card like the Savor or Quicksilver, you can earn cash back or travel miles from your mortgage paymentpurchases. This helps offset the 2.5% processing fee.

2. Building Credit Score

Making on-time payments with a credit card shows fiscal responsibility and can build your credit score over time. This perk boosts your creditworthiness for future loans and credit lines.

3. Convenience and Flexibility

The ability to pay your mortgage with a credit card gives you flexibility if you are ever short on funds in your bank account. The grace period before interest kicks in allows more time to pay as well.

For these reasons, it makes sense why some homeowners may want to put their mortgage on a credit card in certain months. But it is not a long-term solution.

What Are the Drawbacks of Using a Credit Card to Pay Your Mortgage?

While the benefits seem enticing, there are considerable downsides to be very mindful of when weighing this decision:

1. High Interest Rates

If you cannot pay off your credit card bill in full, the APR interest rate will be much higher than a mortgage interest rate. This exponentially increases costs.

2. Potential for Debt Accumulation

It can be easy to overspend and accumulate credit card debt when relying on plastic for large, recurring payments. This can quickly snowball into a major financial burden.

3. Possible Fees and Charges

As covered earlier, you’ll owe a 2.5% processing fee. And if you incur interest, late fees, or cash advance fees, costs pile up fast. Rewards rarely outweigh added fees.

4. Impact on Credit Utilization Ratio

A maxed-out or large credit card balance negatively impacts your credit utilization ratio, which can decrease your credit score.

Weighing these drawbacks will help inform if paying a mortgage with a credit card aligns with your financial goals and risk tolerance. Often, the cons outweigh the pros.

What Are Other Ways to Pay My Mortgage?

Given the downsides of using credit cards, what are some other routes to consider for making mortgage payments? Here are a few solid options:

• Automatic bank draft – Many lenders let you automatically pay from a checking account each month.
• Paying online – You can make one-off payments securely on your lender’s website.
• Paying by phone – Most lenders have a pay-by-phone option available 24/7.
• Sending a check – Checks sent by mail is always an option if funds allow.
• Money order – Secured checks purchased at retailers can be mailed if cash is tight.
• Paying in person – Some lenders have local branches where you can pay your mortgage. 

Evaluate these options to find the most affordable and convenient way to pay your mortgage without relying on credit cards.

How Can I Choose the Best Payment Method for My Needs?

Figuring out the optimal way to pay your mortgage will depend on your unique financial situation and priorities. Here are a few key factors to consider:

• Can you pay the monthly amount in full on time? If not, credit cards carry too much risk.
• Do you tend to carry credit card balances? If so, you may end up paying far more in interest.
• How is your current credit score? Maxed out cards can lower your credit utilization ratio.
• Do you hope to earn rewards? Compare potential earnings versus fees incurred.
• Does the convenience outweigh the costs? Understand all risks and if benefits offset them.

Carefully weighing considerations like these will guide you in determining if a credit card is the most strategic payment method or if you are better off using a conventional route. Seek professional credit counseling if you need help assessing options.

Conclusion

Paying your mortgage with a credit card like Capital One may seem convenient. But in most cases, the risks, fees, and drawbacks overshadow the potential rewards. Ultimately, it is best to avoid relying on credit card payments for monthly mortgage installments unless absolutely necessary in an emergency. 

If you do move forward, use caution by paying on time, minimizing credit usage, and having a backup plan. Weigh all the pros and cons carefully to decide what makes sense for your situation. With smart planning, you can strategically manage mortgage payments even when money is tight.

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