Two Credit Card Companies Want You To Pay Your Mortgage With Their Card. Is It A Good Idea?

Paying debt with other debt has long been viewed as a slippery slope to financial ruin, which is why mortgage companies have made it extremely difficult—until now. 

Bilt and the Mesa Homeowners Card are attempting to make mortgage payments via credit card viable by offering rewards while avoiding transaction fees, according to Fortune. Although there are hacks involving balance transfer cards to pay debt, interest rates and fees have thus far made the move prohibitive.

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“Generally speaking, you can’t pay off debt with another form of debt,” Jared Werksma, a financial advisor with Northwestern Mutual, told Fortune. “Mortgage companies will likely be on the hook for credit card transaction fees, which can be pretty steep considering that the average mortgage payment is more than $2,000.”

What Makes Mesa Different

Mesa is a mortgage marketplace startup staffed by veteran executives from Uber, Bilt Rewards, Robinhood Markets, Block, and Capital One. It works with different lenders and rewards homeowners with points for different home-related purchases, including mortgage payments. 

“Somebody’s mortgage payment is often their biggest monthly expense,” Tina Moore, head of commercial at Mesa, told Fortune. Before joining Mesa, Moore worked at Bilt and American Express. “It hasn’t been rewarded in the same way you can earn rewards on all the other purchases in your life. We identified this as a massive pain point.”

Mesa rewards points are as follows:

• 1x points per dollar spent on your monthly mortgage payments 
• 2x points on everyday essentials such as groceries, gas purchases, and EV charging. 
• 3x points on home-related expenses, including utilities, maintenance, decor, and home improvement projects. 
• 1x points on everything else 
• The card offers benefits targeted at homeowner needs, such as a credit to reimburse up to $65 for a qualifying big box store membership.

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How Mesa Works

There is no annual fee for using the card. To earn rewards on mortgage payments, cardholders must charge at least $1000 of non-mortgage expenses. Mortgages are paid by linking bank accounts to the Mesa app, which then makes payments via the app, debiting bank accounts and rewarding cardholders accordingly. 

How Bilt Works

Bilt has been associated with rent rather than mortgage payments. It offers 1 point per $1 on rent and is subject to a requirement of five transactions per billing cycle, with a maximum of 100,000 points earned on rent per year. Bilt revealed recently that it will allow users to pay mortgages, too.

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Precautions

“You’ll want to make sure they have safeguards in place for transmitting your payment information to your landlord, property manager, or mortgage company,” Jovan Johnson, a certified financial planner and co-founder of Piece of Wealth Planning, told CNET. “Look for other card features like fraud alerts or virtual card numbers, which can add an extra layer of protection.”

The Failsafe

Rather than borrowing to make housing payments, Bilt and Mesa work by debiting your bank account for payments, which protects users from racking up debt and interest payments. However, Bilt offers a credit line that a user could tap into. BiltProtect allows you to pay rent and earn points without accruing debt to ensure this doesn’t happen for rent payments.

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