Using Credit Cards to Pay the Mortgage–Not a Good Idea

By: Timothy McFarlin | Published: May 6th, 2010 | Category: Foreclosure Issues

Some homeowners might think that charging a few monthly mortgage payments to their unsecured credit cards would be a good way to keep a grip on their finances, but this tactic can have a nasty way of coming back to haunt the homeowner.

Credit card interest rates are notoriously high and can increase very rapidly.  If the homeowner falls behind on their credit card bill, they can expect to fall quickly into the same financial trap they were trying to avoid.  What may seem like a manageable debt at first can quickly spin out of hand, digging the homeowner even deeper into debt.  The homeowner who uses their unsecured credit cards to pay down their mortgage will eventually end up having to make a monthly mortgage payment in addition to an increased monthly credit card payment. 

The homeowner considering using their unsecured credit cards to pay their mortgage should also consider the fact that they will very rarely be able to say with confidence when a financial hardship will be over.  A person may go without a job for longer than they think and all of a sudden they find themselves being called by their mortgage lender and their credit card company.  In this instance, using unsecured credit cards to make mortgage payments is like putting a band-aid on a gunshot wound. 

The good news is that people don’t have to pay their mortgage with their credit cards because so many options exist to help homeowners stay on top of their debt.  Options include:  bankruptcy, short sale, loan modification, government assistance, and more.   While these programs may not sound enticing, the homeowner has to remember that at a certain point they have to choose the lesser of two evils; they can continue to borrow money to pay their debts until nobody will let them borrow anymore or they can take advantage of the various consumer recovery programs available and begin the process of credit score recovery.  What people need to realize is that consumer recovery programs are designed to help.      

Anyone who might be considering making a mortgage payment with a credit card is advised to consult with a financial advisor, counselor or attorney who can explain the debt recovery process.  These folks can also explain how to stop annoying debt collection phone calls and how to negotiate payment plans if necessary.

The biggest problem with debt recovery programs is that they have been given such a bad reputation.  Many people think that if they file for bankruptcy or attempt a short sale that they will never be able to have a line of credit again, but nothing could be further from the truth.  The fact of the matter is that most people who use financial recovery programs like bankruptcy, loan modification, short sale, etc, are able to improve their credit score within months of entering the respective program.

A life after debt does not have to be a life of poverty.  Many people that take advantage financial recovery programs are able to go on to live financially normal and stable lives.

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