Using credit cards as a mortgage tool

[mysonroger]

hi andie, me again!!

i'm just wanted your thoughts on using your credit card as a 'weapon' to reduce your mortgage. by that i mean, we put everything on our credit card each month so as to hold DH's income in our mortgage account for as long as possible....till the payment is needed for the credit card.

DH pays off the credit card each month, with the exception of a few ripper months when the bill is big as we are doing quite a few small renovations to our house. so the odd month slips in where there is still a bit owing. this is not the norm however.

we only starting doing this when a friend recommended it, but we never researched it ourselves, we just thought it sounded like a hot idea. we noticed pretty quickly the time reducing off our mortgage.

is it as simple as that? what are you thoughts on this??

much appreciated.

[andie_pandie]

Love the terminology, yes if you have the ability and discipline then it is a great tool to reduce the interest you pay on your mortgage.

Basically by paying most of your expenses onto the credit card then placing any extra money that is not needed onto the mortgage, you then reduce the amount of interest on the loan as the money works the minute it is in the mortgage.

Then at the end of the month you cashback the credit card amount required from your mortgage (as long as you have either a variable loan or a loan that allows cashback).

One way people come unstuck is if they spend far too much in the month over an above there loan repayment, as the loan still has to be paid. So you really need to be disciplined and keep your spending down if you want to come out on top.

I do use my credit card for everything, plus have managed over the years to even get enough to pay for a free dishwasher with reward points.