The Easiest Way To Pay Your Mortgage With A Credit Card

pay mortgage with credit card

Sadly, Target RedCard has changed their terms you can no longer directly load the prepaid card directly with a credit card so this no longer works.

Tori and I love earning credit card sign up bonuses and rewards.

That said, we can only earn as much as our spending will allow in order to responsibly earn bonuses.

We do not spend a ton of money on frivolous things, so our monthly spending only used to allow us to get a few credit card sign up bonuses a year.

That was until we found an easy and free way to pay our mortgage with our credit cards in a bit of an indirect way.

Now we will earn many more bonuses and rewards while not spending a penny more, simply because we can pay our mortgage with our credit cards.

In addition we can now pay other bills with credit cards, like our electric bill, that we couldn’t previously use credit cards to pay.

So how do we pay these bills on our credit cards without paying fees and earning rewards at the same time?

Prepaid Debit Cards

I never thought I’d use a prepaid debit card until my friend Holly, from Club Thrifty, taught me this awesome trick. This trick showed me how to pay my mortgage with my credit card indirectly through a prepaid debit card.

In the past, using this method confused me due to all of the complicated procedures you needed to follow to make it work. When I first looked into it there were no prepaid debit cards you could directly load with a credit card. There used to be options, but they were shut down.

Then, just this past year a new product entered the market that made the process so simple that I had to try it out for myself.

The Target Prepaid REDcard by American Express

The Target Prepaid REDcard was released in test markets in 2014. While there were no nearby areas I could purchase the card at, I had a friend who was able to get one for me and mail it to me. I hear that may be rolling it out nationwide in the future. Regardless, once you have the Target Prepaid REDcard you can reload it at any target nationwide.

The beauty about this prepaid debit card is the fact that you can reload it directly with a credit card. Granted, you can only load $1,000 per transaction up to $2,500 per day and a total of $5,000 per month. Since my mortgages and other bills don’t get anywhere near the limits, I can easily use this as a one stop card to pay my bills that don’t accept credit card payments.

To top it all off, this card as no fees that would apply to me except the $5 purchase fee I reimbursed my friend for. This was huge because I am very against paying fees to access my money. However, I probably would pay a small fee in this case since my rewards would more than pay for the fees.

So How Does It Work?

Now that I can put money on a prepaid debit card, you’re probably wondering how I can pay my mortgage. My mortgage won’t take debit card payments either. Luckily, the Target Prepaid REDcard has free bill pay.

All I have to do is set up my monthly bills within my prepaid card website and I can use bill pay to pay almost any bill. Technically, I could pay off the credit card bill I used to load the card if I wanted to, but I think that’s silly and abusing the system.

Instead, I’ll only be using the card to pay bills I couldn’t otherwise pay with a credit card.

Why Is This Such A Big Deal?

Having the ability to pay bills like mortgages and utility bills makes a huge difference for our monthly credit card spend. Before, we would have only been about to charge about 30-40% of our monthly expenses on credit cards but now I’d say we can charge 80% to 95% of our monthly expenses on credit cards.

This huge jump will allow us to earn more sign up bonuses, which often have high spending thresholds to qualify for. Typically, the credit cards we apply for require us to spend anywhere from $500 to $5,000 in the first few months to earn the sign up bonus. Now, we’ll be able to earn twice as many sign up bonuses each year or more.

What Will We Use These Extra Bonuses For?

Typically, we use these sign up bonuses to pay for part of our vacations. However, now that we’ll be able to start earning more rewards and bonuses, we might be able to use them to pay for whole vacations or short weekend getaways.

In fact, we’re planning on taking an extended four night weekend trip to a nearby beach for almost nothing. We’ll be able to do this using just a couple of credit card sign up bonuses that we may not have considered had it not been for being able to pay our mortgages with credit cards.

What To Watch Out For

If you want to get in on this, by all means do so! Just beware of a few things. First, you need to realize that this prepaid card could change at anytime. They may quit allowing credit card reloads which would essentially make the whole system quit working.

Next, you’ll need to watch your credit card bills to make sure that your issuer doesn’t classify prepaid card reloads as cash advances. While I haven’t had a problem with this yet, I have heard it may be a possibility. Cash advances come with extra fees and immediate interest charges, so watch closely. They also don’t normally count toward sign up bonus spending thresholds.

As with any credit card spending to earn rewards, you must be sure you are in firm control of your finances. You simply cannot afford to begin spending more money simply because you’re making purchases on a credit card. If you do, you won’t end up earning any value from these bonuses and the credit card companies will have won.

The same thing goes with making sure that you pay your bill off in full every month. You don’t want to pay high interest charges when you only earn a few cents on the dollar in rewards. Finally, make sure you have a good system in place to avoid paying late fees.

Well, that’s my wonderful insight into paying my mortgage and other bills with credit cards. I’m so stoked and am totally looking into cheap and free vacations going forward into the future!

Would you ever do something like this to earn credit card sign up bonuses? What is your favorite bonus? Where would you go on vacation? Let me know in the comments!

Image by: roarofthefour Text added by: Lance Cothern

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About Lance Cothern

Lance Cothern, a Certified Public Accountant (CPA) licensed in the Commonwealth of Virginia, is the founder of Money Manifesto. You can read more about him here or connect with him on Facebook, Twitter, Google+ or Pinterest.


  1. Wow! I have to think this one out because at this point my spending is so low I don’t know if it’s worth the trouble. So very interesting. Thanks for keeping the ideas coming.

  2. Oops! I forgot to mention that my mortgage is paid in full, so that kind of cuts back on the need for this very interesting way to squeeze a little bit more out of your credit card.

  3. After reading the Target Redcard rules it says that the debit card can only be used for spending at a Target store or
    Looks like it’s not a viable option to pay your mortgage with this any more?????

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