Paying the Mortgage with Credit: ChargeSmart Tries Where Others Have Failed

Is there a market for a service that allows you to pay your mortgage on your credit card? History so far says “no.” Last year, Amex introduced a program with American Home Mortgage and IndyMac that allowed cardmembers to put their mortgage payments on their Amex after paying a one-time fee of $395. However, American Home Mortgage is now bankrupt while IndyMac looks to be headed that way as well. Another company, CardIt LLC, introduced a service late last year that allowed mortgage payments to be charged for a fee of 2.49% plus $19.99 per transaction. That business also has already failed.

Now, another company is giving it a try, and its business model appears to be largely the same as CardIt’s, though it boasts access to a larger network of billers and lower transaction fees.

ChargeSmart LLC announced that its new service will allow consumers to charge their mortgage, auto loan, lease, and utilities with a Visa or Mastercard. It claims to support over 4,000 billers, including Bank of America, Chase and Citi.

ChargeSmart charges 2.29% + $4.95 per transaction, which in my opinion, still makes it too expensive to use except in rare cases. (An exception, for instance, might be when Citi offered its 5% CashReturns card.)

It’s possible that for a rare few, using the service on a regular basis could be profitable, but it’s more likely that it is most useful for those who need temporary bridging financing (a potentially dangerous use) or to take advantage of a limited-time credit card spending promo.

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