The problem of miles for mortgages, solved … almost

For most of us, a home is the most expensive purchase we’ll ever make. Which naturally leads mileage collectors to wonder whether they could charge their mortgage payments to credit cards affiliated with their travel rewards programs. Over the course of most home loans, earning one mile for every dollar charged to a credit card would be worth hundreds of thousands of frequent flyer miles, and often times more.

As a rule, however, mortgage companies and banks don’t accept credit card payments, effectively stymieing frequent flyers’ efforts to tap this potentially lucrative source of miles.

But where a consumer need exists, it’s a safe bet that a company will appear on the scene to fill it. And for this particular need, there’s CardIt.

Here’s CardIt’s sales pitch, from the company’s website:

“Pay your mortgage with a credit card via CardIt and you can:

“Protect your credit and property by paying on-time even when you have no cash

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“Potentially avoid late fees

“Enjoy benefits of your cash-back, airline or other rewards credit cards

“Better manage your cash-flow”

Of course, that convenience and those frequent flyer miles aren’t free. The fees, which aren’t nearly as prominently displayed as the benefits: “CardIt charges a convenience fee of 2.49% + $19.99 of the amount of your mortgage payment.”

I’ll leave it to the reader to place a value on convenience and determine whether the extra costs can be justified on that basis. But looking just at the frequent flyer miles piece of the value proposition, the analysis is pretty straightforward: Paying an extra 2.49 cents per dollar charged to earn miles that are only worth approximately 1.2 cents each is a textbook example of a dodgy deal.

Sorry, homeowners. The problem of cost-effectively earning miles for mortgage payments remains to be solved.