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Using Credit Card for mortgage payments

Discussion in 'Accounting & Tax' started by paulF, 24th Aug, 2016.

  1. paulF

    paulF Well-Known Member

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    Hey guys,
    I have three loans that are set up to automatically deduct loan payments (Interest only) from an offset account.
    I was thinking to get the bank to use my Credit card instead of the offset to make the payments in order to keep the balance of the offset as high as possible to save more in interest.

    Any disadvantages in doing that or issues ?! i have alerts on when my credit card is due so i never miss on those.

    Cheers
     
  2. Foxdan

    Foxdan Well-Known Member

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    Then get a second credit card to pay for the amount on the first card and so on.... Make it a debt circle...

    Pretty sure you can't pay a mortgage with a credit card. Just as you can't pay one credit card off using another credit card.
     
  3. paulF

    paulF Well-Known Member

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    Sorry, i'm not following. First sentence says get a credit card to pay first and then second one says you can't pay a CC with another?!

    Seems like i jumped the gun on this one as some googling is showing that paying mortgage payments via a CC is not possible.
     
  4. Kinnon Bell

    Kinnon Bell Finance Broker

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    Can't use debt to pay for debt in this example.

    Only way to make it happen is if you do a cash advance and then you don't get the points, you get charged ~1.75% to withdraw the cash and you get charged interest on day one which would defeat the purpose of what you're trying to achieve.
     
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  5. Scott No Mates

    Scott No Mates Well-Known Member

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    That sounds like a cash advance from the CC so you're paying higher interest on the card sttaight away.
     
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  6. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Pretty sure it's a cash advance which generally cost a fair bit.

    Cheers

    Jamie
     
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  7. paulF

    paulF Well-Known Member

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    Thanks very much guys,
    seems like Cash Advance is the technical word for it and yup, no advantage in doing so. It would actually be more costly to do so.

    Thanks again for all the replies guys.
     
  8. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Yep, about 4-5 times more costly.
     
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  9. House

    House Well-Known Member Premium Member

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    Used to be able to do it in the US.

    Anyone looked into a BPay workaround?!
     
  10. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

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    Can be done as a cash advance but not worth as outlined above.

    I ditched my credit card and just use a visa debit card.

    Was getting Qantas FF points but the value proposition seems to have decreased significantly.

    Got $800 of woolworths vouchers on the way which probably covered the fees and charges over the years, but probably not!
     
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  11. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    I suppose you could do it for the points by having your CC in surplus by at least the amount of the loan repayment. It wouldn't save you any interest, but you might get FF points (assuming they're available with cash advances).
     
  12. Hedgy

    Hedgy Well-Known Member

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    Theoretically you could use PayPal as a front for your CC, but not sure the numbers stack up. Anyway this is how it works if you want to look into it. Setup two PP accounts--one could be in your name and the other could be in your wife's name (assuming you have a wife). The PP account in your name is linked to your credit card. From your account you gift the required mortgage payment to your wife. This gift will appear as a CC transaction and not a cash advance so you get the usual interest free period and payment terms on your CC to pay it back. The money will immediately appear in your wife PP account and from their she can transfer it to your personal bank account at which point you can use it to pay your mortgage. What's the catch, well PP will change about 2.4% of the value of the money gift from you to your wife which is a lot cheaper than a CC's interest on cash advances. Not saying it is worth while, but just throwing this out as an option for you to think about. Good luck.
     
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  13. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    It can be done but it will be a cash advance which means no interest free period and a rate of about 20%
     
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  14. Weaver

    Weaver Active Member

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    I think you can get a cash advance on the first CC, (eg 10Kto pay into loan), and then get a second CC and with a zero interest balance transfer and use it to pay down CC1. thus save interest on 10k for the time period of your zero interest balance transfer on CC2. Some people keep rolling it over into new CC with zero balance deals just before their deal expires.
    Fair bit of hassle I think and you'd have to have some big CC balances available to do it. Prob not worth doing below $20k
     
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  15. Ghoti

    Ghoti Well-Known Member

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    The payment will be delivered via BPay, but still treated as a cash advance.