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Can You Buy A House With A Credit Card?

Last modified: Sep 29, 2022

If you own a credit card, you may have wondered: can you buy a house with a credit card?   

Simply put, buying a house with a credit card is possible, but it has pros and cons. This article tells you all about them so you can make the best decision and be smart with your money.     

Can You Buy a House With a Credit Card? 

When you finally have the money to buy a house, using a credit card sounds crazy, but it’s possible. The main question is whether you should do it.   

Read more: Everything You Need to Know About Credit Score for Mortgage.

Should You Use Your Credit Card to Buy a Home?   

If your credit card limit is quite large, you can buy a house, but It's crucial to realize that you may get a fixer-upper for $15,000 to $40,000 in different parts of the country. Consumers with high credit limits may be able to pull this off, but it’s hard to manage it in most situations.       

You can use your credit card to borrow money and buy the house, as long as you have enough available credit to afford the amount. However, while you might be able to pull it off, we don't encourage it.          

Pros, Cons, and Obstacles 

Buying a house with a credit card has its pros and cons. For example, some benefits may include credit card rewards and immediate payment. However, the disadvantages include additional fees, paperwork, shorter repayment, debt-to-income ratio, reduced credit score, a maxed-out credit card, and interest rates.  

If you live in a large city, particularly one on the coastlines, you may be wondering who could have a credit limit large enough to buy an entire house. However, you can still find fixer-uppers for $40,000, $30,000, or even $10,000 in many places. Someone with a good credit score and a high salary may be able to get enough credit to finance such a purchase with ease.     

However, here are some reasons why we believe you shouldn’t buy a house with a credit card. Firstly, previous research has shown that using your credit card to get a cash advance might be extremely costly. To withdraw the funds, you'll have to pay a fee of up to 5%. Simply borrowing the money from your credit card would cost you $500 on a $10,000 withdrawal.          

Furthermore, cash advance interest rates are typically greater than the interest you pay on standard purchases, which is higher than the interest rate on a conventional mortgage. Additionally, the interest begins to accrue the day you take out the loan.  


Another thing you should be aware of is the risks involved. Assume you have a $30,000 credit card limit; you could easily purchase an older home in a small town in the US for that price.  

However, the cash advance limit on a card is frequently lower than the card's overall credit limit. If your total credit limit is $30,000, you may only be able to get a cash advance of $10,000.     

Another issue is paying your mortgage with a credit card. Unfortunately, credit card payments are not taken directly by mortgage lenders. Therefore, you will have to pay your mortgage with a 2.85% fee if you use a Mastercard or Discover card. 

Most consumers won’t find it worthwhile to pay their mortgage with a credit card because of the fees and taxes. To avoid the risks, we suggest you don’t buy a house using a credit card. 

Interestingly, nearly 40% of all American homes are entirely mortgage-free.      

Read more: Best Mortgage Protection Insurance Companies of 2022.

Understanding the Home Buying Process 

If you want to buy a house, you must understand the process or hire an agent to help you. It’s best to start your research early to determine your budget and start planning.

Moreover, you should get prequalified and preapproved for credit for a mortgage. With the help of an agent, you can find your home and make an offer. Lastly, you should get a home inspection.  

As previously mentioned, you can’t escape the risks of using your credit card for purchases like this. When making big purchases on your credit card, you are at risk of becoming a victim of fraud and theft, so be careful and think it over beforehand

Another common question is whether you can pay a down payment with a credit card. The answer is yes, but using a credit card for a down payment or mortgage payment is generally not a good option due to the hefty transaction fees that outweigh any benefits. But, we’ll go into more detail below. 

Read more: How Much Credit Should You Establish to Buy a House?

Manufactured Spend and Plastiq  

There are two techniques involved when answering whether you can put a down payment on a house with a credit card

Manufactured spending is the technique of maximizing credit card spending to earn rewards while minimizing the adverse effect on your bank account balance. So if you want to attempt to buy a house with a credit card, we suggest you use this technique.      

Another method is called Plastiq, which is a service that lets individuals and businesses use debit or credit cards to pay vendors that don't otherwise accept those payment methods.        

Overall, you can buy a house with a credit card. However, many risks are involved, so it's better to purchase with the money you already have to avoid them.  


How much can you put on a credit card when buying a house? 

You can put as much as you want on your credit card, but you’ll have to check the card’s limit when attempting to buy something.

How to pay a mortgage with a credit card?

You have to be careful while paying a mortgage with your credit card. Try to pay your mortgage by putting it on your credit card like a regular purchase. You won't have to pay a third-party service to send a special check to the mortgage company.

Is it better to have a loan or credit card debt when applying for a mortgage?

It's a good idea to pay off your credit card debt before applying for a real estate loan. First, you're likely to be paying a lot of money in interest (money that you'll be able to funnel toward other things, like mortgage payments, once your debt is repaid).

Can you pay a mortgage with a credit card?

You can, but it is not advised. If you decide to do it,  try to put it on your card like a regular purchase. Otherwise, you might pay a third-party provider a check to your mortgage servicer, and the fees are not worth it.

Can you use a credit card for a down payment on a house?

The answer depends on the home sellers because, occasionally, they do not accept credit card payments directly. In some cases, they do, but the transaction fees are pretty hefty. 

Policy Advice is a website devoted to helping everyday people make, save, and grow money. While our team is comprised of personal finance pros with various areas of expertise, nothing can replace professional financial, tax, or legal advice.

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