In the continuing destruction caused by the sub prime meltdown, homeowners have to be even more careful about managing finances and making regular mortgage payments than ever before. If you have a mortgage on your house—which is quite possibly your most valuable asset—it’s time to find new ways to ensure that you are always able to send in that monthly check.
While airline miles, gasoline and redeemable points are all attractive incentives offered by credit card companies, the cash back credit cards are far more popular. The rewards don’t come to you as numbers on a sheet of paper and there are no cumbersome mathematical equations to confuse your understanding of the rewards programs; with cash back cards, you get cash in hand, which is infinitely more desirable than obscure and confusing points systems.
Cash back credit cards can be used to save for your yearly vacation or for that new digital camera you’ve
been eyeing at the mall, but they can also serve a much more practical purpose. You can use that cash back credit card to earn money toward your house payments, which might stave off a foreclosure or give you sufficient peace of mind to sleep at night.
The trick to using cash back cards to pay off a mortgage is responsible spending. You want to maximize your cash by using the card as frequently as possible, but you certainly don’t want to exceed your credit limit or charge more than you can realistically afford. The cash back you earn with these cards can sometimes be mitigated by the high interest rates when you carry a balance from month to month.
Capital One No-Hassle Cash Rewards Card
One of the best cash back credit cards on the market today is the No Hassle card from Capital One. It is particularly attractive because you can request the cash you’ve earned at any time and your rewards never expire. Furthermore, they offer a 25% annual cash bonus on the money that you earn throughout the calendar year on top of the 1% cash back on all purchases.
This card requires an excellent credit score and has a maximum credit limit of $20,000. They offer a 0% introductory interest rate on purchases and balance transfers with no balance transfer fees and no annual membership fee. This is a great card if you want to save up extra cash for your mortgage payment while enjoying a low interest rate in the meantime.
Citi Dividend Platinum Select MasterCard
Another great cash back resource, the Citi Dividend Platinum card offers 5% cash back on purchases at drug stores, supermarkets, gas stations and utility companies for the first six months, during which you can also enjoy a 0% introductory interest rate. After the six months, you earn 2% cash back on the aforementioned purchases and 1% elsewhere. This card is unique in that it offers cash back on balance transfers and cash advances as well as credit card purchases, which is beneficial for consumers who need to consolidate debt or have access to quick cash.
Chase Freedom Visa
The Chase Freedom Visa is another cash back credit card that can help you save for your mortgage payments with 3% cash back on purchases at grocery stores, fast food restaurants and gas stations (and 1% everywhere else). This card isn’t quite as flexible with redeeming your rewards as the Citi Dividend; you must wait until you reach the $50 threshold.
If you choose to wait until you have accumulated $200 in cash back rewards, however, Chase will reward you with $250, and you don’t have to worry about an annual fee.
Comparing the Cards
If you’re looking for a cash back credit card to help with your mortgage debt, it is best to look at all features on each card option before submitting an application. For example, some credit cards don’t have a grace period or, if they do, offer it only if you don’t carry a balance from month to month. You’ll also find that variable interest rates can spike and you can be issued a higher interest rate if you fail to pay your bill on time.
In this world of sub prime mortgages and predatory lending, home owners must do whatever they can to keep on top of their financial obligations. Cash back credit cards are just one way to accomplish this goal.
