Having a credit card you don’t have to pay an annual fee for is good. Having a card that pays you is even better.
Since our objective is mortgage acceleration, for several years I have been using two credit cards that make payments to our mortgage principal based upon how much we charge in goods and services throughout the month. Both cards pay 1% of charges to mortgage principal. Thus $2500 in charges has a return of $25 cash to the mortgage principal.
Both are personal cards; though, I use one for business and one for household expenses. (Mortgage principal repayment is not an option on ‘business’ cards.) Of course, we pay both cards off in full every month so we do not accrue interest charges. That means we also use a couple of other cards (each) to stagger repayment dates.
The Citibank card pays rewards annually. The $99.43 and $5.55 are both Citi rewards. We refinanced to a lower interest rate very near my anniversary date, which is when, and only when, Citi coughs up the dough. The $5.55 was mailed as a check since Citi had not yet located our new mortgage. The $99.43 was deposited directly to the loan number on file.
The two $25 payments were both from Wells Fargo, who pays on the mortgage as soon as charges equal $2500. They found our new loan and inquired whether we preferred they’d pay it somewhere else. In the space of barely more than a month, we received $154.98 on our mortgage principal.
Since this is a new 15-year mortgage at 4.375% per year, this influx of cash cut an additional $141.32 in interest, besides the principal reduction, for a total $296.30 savings for using the business card for a year and the personal card for two months!
Home Rebate cards are harder to find than they were before Countrywide went belly up (they paid 2% to Countrywide mortgagers). Home Rebate cards are worth looking for unless flight miles or other rewards mathematically serve you better than does cutting your mortgage by a few hundred to a few thousand dollars.
Remember, the objective or mortgage and debt acceleration is to circumvent interest payments (charges) by reducing principal faster than the benefactors of all that interest recommend!