How to Earn Points (or Make Money) When You Pay Your Mortgage, Student Loans, & Car Loans! – Using ChargeSmart for Mortgages

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 [Disclaimer:  Information in the table below was accurate as of Saturday, September 15, 2012.  Please double check the exact rate for your lender to make sure it is accurate.]

Last week I wrote about how to earn Chase Ultimate Rewards points or cash back by using either a Chase Ink Bold/Ink Plus or the American Express Blue Cash Preferred to buy gift cards to pay your loan.

I’ve created a table below with the ChargeSmart fee for paying $100, $250, & $500 towards your mortgage.

Paying $100 or $250 towards your loans is almost always going to be unprofitable because of the high fee which ChargeSmart charges.

But paying $500 towards your mortgage using a Visa or MasterCard could get you Ultimate Rewards points or cash back even after taking into account the ChargeSmart fee.  But do the math to see if this makes sense for you!

How to See if Paying $500 via ChargeSmart Makes Sense

For example, suppose you want to pay $500 towards your mortgage with Acacia Federal Savings Bank. 

Step 1 – Find Lender

Scroll down to the chart and look for Acacia Federal Savings Bank under “Lender

Step 2 – Find $500 payment fee

Go to the last column “ChargeSmart Fee as a percent of $500 payment”  The ChargeSmart fee is 3.3% for a payment of $500

Step 3 – Find the Total Cost

Add 1% (the activation cost of the Visa/MasterCard) to the fee to get an approximate total cost of paying your mortgage with a Visa or MasterCard gift card bought with either the Ink Bold/Ink Plus at an office supply store or with the American Express Blue Cash Preferred at a grocery store.

In this example, the approximate total cost is 4.3% ( 3.3% for paying via ChargeSmart + 1% gift card activation fee.)

Step 4 – Is Total Cost More Than Points or Cash Back Earned?

The last step is to see if this makes sense for your situation.

Chase Ink Bold or Chase Ink Plus:  You earn 5x Ultimate Rewards points or 5% cash back for buying the Visa or MasterCard in an office supply store with the Chase Ink Bold or Ink Plus.

To make things simple & to be conservative in valuation, let’s say you value 1 Ultimate Reward at 1 cent per point.

You’re paying ~4.3% in fees, so your net gain is ~0.7% (5% in cash back/value of 1 Ultimate Reward Points – 4.3% in fees).

The net result is that you’re earning 0.7 Ultimate Rewards points per $1 spent when you pay your mortgage in $500 increments via ChargeSmart.

This may or may not be worth it to you once you factor in the value of your time, but this took less time than I thought it would.

American Express Blue Cash Preferred:  You earn 6% cash back for buying the Visa or MasterCard gift card at a grocery store with the American Express Blue Cash Preferred.

You’re paying ~4.3% in fees, so your net gain is ~1.7% (6% in cash back – 4.3% in fees).

You’re effectively earning 1.7 cents cash back per $1 spent when you buy Visa or MasterCard gift cards at a grocery store with the American Express Blue Cash Preferred and pay your mortgage in $500 increments via ChargeSmart.

Again, this may or may not be worth it to you once you factor in the value of your time.

Caution

Million Mile Secrets reader Brant wrote in that some banks will apply only your 1st payment towards the monthly payment and ALL other subsequent payments go towards reducing the principal balance.

This could mean that your lender will ding you for not making the full monthly payment so be very careful when you break up your monthly mortgage payment into more than 2 payments.

For my student loans it is the opposite, multiple payments all go towards future monthly bills and do not reduce the principal unless I click that option online.

Also make sure that you can pay your credit card bill in FULL.  Credit card interest is much, much higher than interest on loans and you just won’t get ahead by paying interest on credit cards.

LenderCharge Smart Fee for $100 Mortgage Payment
Charge Smart Fee for $250 Mortgage PaymentCharge Smart Fee for $500 Mortgage Payment
Flat FeeCharge Smart Fee as a Percent of $500 Payment
1st 2nd Mortgage
$17.95
$17.95
$17.95
Yes, $17.953.6%
21st Mortgage
$17.95
$17.95
$17.95
Yes, $17.953.6%
AAA Mid-Atlantic
$7.24
$10.68
$16.40
No3.3%
Acacia Federal Savings Bank
$7.24
$10.68
$16.40
No3.3%
ADVEST
$7.24
$10.68
$16.40
No3.3%
AIG
$7.24
$10.68
$16.40
No3.3%
AgFirst Farm Credit Bank
$7.24
$10.68
$16.40
No3.3%
AllFirst Mortgage
$7.24
$10.68
$16.40
No3.3%
Allstate Bank
$7.24
$10.68
$16.40
No3.3%
American Express
$7.24
$10.68
$16.40
No3.3%
Americas Servicing Co.
$29.95
$29.95
$29.95
Yes, $29.956.0%
Aurora Loan Services
$34.95
$34.95
$34.95
Yes, $34.957.0%
B&W Investment Properties
$7.24
$10.68
$16.40
No3.3%
BB&T Mortgage Loans
$19.95
$19.95
$19.95
Yes, $19.954.0%
Banco Popular Mortage
$24.95
$24.95
$24.95
Yes, $24.955.0%
Bank of America Mortgage
$14.95
$14.95
$14.95
Yes, $14.953.0%
Blue Edge Mortgage
$7.24
$10.68
$16.40
No3.3%
Burnet Home Loans
$7.24
$10.68
$16.40
No3.3%
CCO Mortgage
$24.95
$24.95
$24.95
Yes, $24.955.0%
Century 21 Mortgage
$24.95
$24.95
$24.95
Yes, $24.955.0%
Coldwell Banker Mortgage
$24.95
$24.95
$24.95
Yes, $24.955.0%
CUNA Mortgage
$7.24
$10.68
$16.40
No3.3%
Chase Home Finance
$22.95
$22.95
$22.95
Yes, $22.954.6%
Citi Mortgage
$24.95
$24.95
$24.95
Yes, $24.955.0%
Citizens Bank Loans (Principal Payments 15 Digit Accts)
$7.24
$10.68
$16.40
No3.3%
Citizens Bank Loans (RegularPayments 15 Digit Accts)
$7.24
$10.68
$16.40
No3.3%


Citizens Bank Loans (Line Principal Payments 17 Digit Accts)
$7.24
$10.68
$16.40
No3.3%

Citizens Bank Loans (Line Regular Payments 17 Digit Accts)
$7.24
$10.68
$16.40
No3.3%
Colonial Savings Mortgage
$19.95
$19.95
$19.95
Yes, $19.954.0%
Dovenmuehle Mortgage
$7.24
$10.68
$16.40
No3.3%
ERA Mortgage
$24.95
$24.95
$24.95
Yes, $24.955.0%
Ever Home Mortgage Company
$7.24
$10.68
$16.40
No3.3%
First Midwest Bk Mortgage
$7.24
$10.68
$16.40
No3.3%
Flagstar Bank
$39.95
$39.95
$39.95
Yes, $39.958.0%
GMAC Mortgage
$27.95
$27.95
$27.95
Yes, $27.955.6%
Green Tree
$21.95
$21.95
$21.95
Yes, $21.954.4%
HSBC
$29.95
$29.95
$29.95
Yes, $29.956.0%
HomeEq Servicing Corporation
$16.95
$16.95
$16.95
Yes, $16.953.4%
Home Comings Financial Network
$19.95
$19.95
$19.95
Yes, $19.954.0%
Hudson United Bank
$7.24
$10.68

$16.40
No3.3%
Independence Community Bank
$7.24
$10.68
$16.40
No3.3%
Instamortgage
$7.24
$10.68
$16.40
No3.3%
Insurbanc
$7.24
$10.68
$16.40
No3.3%
Jackson Federal Bank
$7.24
$10.68
$16.40
No3.3%
John Deere Community Credit Union
$7.24
$10.68
$16.40
No3.3%
Landover Mortgage
$7.24
$10.68
$16.40
No3.3%
M & I
$7.24
$10.68
$16.40
No3.3%
M&T Mortgage
$19.99
$19.99
$19.99


Yes, $19.994.0%
MBNA Mortgage
$7.24
$10.68
$16.40
No3.3%
Massachusetts Housing Finance Agency
$7.24
$10.68
$16.40
No3.3%
Mellon Bank Mortgage
$7.24
$10.68
$16.40
No3.3%
Mercantile Mortgage Corp
$7.24
$10.68
$16.40
No3.3%
Merrill Lynch Mortgage
$7.24
$10.68
$16.40
No3.3%
Met Life Bank
$7.24
$10.68
$16.40
No3.3%
MetLife Home Loans
$7.24
$10.68
$16.40
No3.3%
Mortgage Service
$7.24
$10.68
$16.40
No3.3%
MortgageQuestions.com
$18.95
$18.95
$18.95
Yes, $18.953.8%
MortgageSave.com
$7.24
$10.68
$16.40
No3.3%
NCB,FSB
$7.24
$10.68
$16.40
No3.3%
Nationwide Advantage Mortgage Company
$7.24
$10.68
$16.40
No3.3%
Option One Mortgage
$7.24
$10.68
$16.40
No3.3%
PHH
$7.24
$10.68
$16.40
No3.3%
PHH Mortgage Corporation
$7.24
$10.68
$16.40
No3.3%
PNC Bank
$29.95
$29.95
$29.95
Yes, $29.956.0%
Provident Bank
$7.24
$10.68
$16.40
No3.3%
Provident Funding
$21.95
$21.95
$21.95
Yes, $21.954.4%
Specialized Loan Servicing
$7.24
$10.68
$16.40
No3.3%
TD Bank North Mortgage Group
$7.24
$10.68
$16.40
No3.3%
Towne Center Bank
$7.24
$10.68
$16.40
No3.3%
US Bank Mortgage
$7.24
$10.68
$16.40
No3.3%
Vanderbilt Mortgage & Finance Inc
$7.24
$10.68
$16.40
No3.3%
Warwick Savings Bank
$7.24
$10.68
$16.40
No3.3%
Wells Fargo
$24.95
$24.95
$24.95
Yes, $24.955.0%
West Coast Bank
$7.24
$10.68
$16.40
No3.3%
World Savings
$7.24
$10.68
$16.40
No3.3%

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28 responses to “How to Earn Points (or Make Money) When You Pay Your Mortgage, Student Loans, & Car Loans! – Using ChargeSmart for Mortgages

  1. For GMAC mortgage, a payment of $500 does not make sense. However, does it make sense just to pay with your credit card the entire amount using Chargesmart?

    • @Maury – Looks like ChargeSmart charges a flat fee of $27.95 regardless of the amount for GMAC Mortgage. This could make sense depending on your monthly payment. For $1,000 you pay ~2.8% which is still high, but could be worth it if your payment is higher (so the fee as a % of the payment reduces).

  2. I have B of A so the charge is 3 per cent. Will this be 3 % of the total mortgage which is about 3k? Also, will i be charged the flat fee of $27.95. Can I pay partial payment of my mortgage and then deduct the rest using my checking account at B of A?

  3. For first timers using chargesmart, do they still offer a $10 credit?
    not bad for folks who are trying to hit a min cc spend.

  4. Steve, Yes. I just went to the Chargesmart website and it said I could save $10. For my situation (Wells Fargo) it doesn’t make sense (plus I’m too chicken).

  5. Disappointing that Suntrust Morgtage is not on the list. Initially I thought you could make a payment to whoever you wanted to, but the recipient has to be in their “network.”

  6. My Wells Fargo student loan payment goes to an address in Dallas, and has a flat fee of $9.95! My new Ink Bold card needs its spending bonus reached…

  7. Was going to try this but I went to pay my first loan payment on my new vehicle and was given the option to use a credit card with no fee (at least it didn’t inform me of a fee). How sweet is that!? Free miles/points each month for making a loan payment to RBS Citizens loans.

  8. After your post last month I checked Wells Fargo and it seemed like any amount I entered was giving a $24.95 fee. Might be a great deal for paying say $20,000 off the principal.

  9. I did mine for the 3 months recurring and I have my mortgage with Wells Fargo. It was only beneficial the first month and because I needed to hit 10k in 3 months on my Ink. After the 3 months is up I’m canceling it as I’m losing money.

    • @Jan – The 3% is only for payments of $500. If you pay $3K in one transaction, you will pay ~1%. Also, keep in mind that BOA may not apply multiple payments towards the outstanding balance so check with them before making any payments.

      @Mark
      – Ha!

      @Lee – That’s a great deal.

      @Jason – Yes, that would be a great way to pay off a chunk of your mortgage and earn points!

  10. Can’t you just buy the gift cards at Office Depot using your Ink Bold and then take those gift cards directly to the bank ( mine is Wells Fargo) and make your mortgage payment? Why do you have to use Charge Smart at all?

  11. Beware, fees can be much higher than your spreadsheet indicate. I have Provident Funding as my lender – they charge a flat $21.95 fee – for my mortgage, it was 0.6%. Sounded great. Until I got to the final payment screen where they tacked on a “Large Payment Security Fee” of $78 (with no explanation of why the fee or how it was calculated). Total fees came to 2.7% or ~$99. Needless to say, did not fund my mortgage that way. But I can see how it might be useful as a last resort to meet a spending requirement to get a big bonus on a good card. That said, cheaper ways to accomplish the same thing, if more convoluted.

    • @Ron – The large payment fee isn’t charged for the $500 amount listed in the spreadsheet, but for higher amounts. But the large payment fee kills any value for higher payments unless you have a minimum spending requirement for a sign-up bonus.

  12. I have a BOA mortgage and the large payment fee + payment fee ended up being around $60 for a $2100 payment. I also have a rental property mortgaged through Citi that has a $1100 mortgage and the fee is $24.95 and a large payment fee around $0.40. I might even be able to deduct the fee for tax purposes.

  13. Don’t forget about to account for the activation fees when buying the visa gift cards. We’ll have to check chargesmart out for sure.

  14. Last year for a Wellsfargo mortgage fee was $24.95, now its $49 (even for a $500 payment)… no wonder chargesmart had a big headquarter. any other alternative you know of?

  15. thanks Darius. yes I do have BB. my loan payment is ~2k which at last yr’s fee of $24.95 would be worth the $8 difference between Vanilla Reload (4x$3.95~16) & Chargesmart, but $49 is grotesque. I will be driving around to pick up the VRs.

  16. My mortgage is $1750 with Wells Fargo. I have a new citibank card that needs $3000 in expenses to get 50K miles. If I pay the entire first month mortgage through chargesmart, it will charge me $46, will I get miles for those dollars and will it post as mortgage for the entire month to Wells?

  17. Gilbert Ercanbrack

    I have a US Airways Dividend Miles Mastercard, can I pay my Coldwell Banker mortgage of $1141 and get the awarded miles on a recurring basis?

  18. Would it make sense to use charge smart to pay my 2200/month Everhome mortgage for 3 months in order to help my hit the 10k on the Citi Executive AA mastercard? Thanks.

    Todd

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