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Friday, August 3, 2007

Make Your Mortgage Payments with Your Credit Card

This is so unbelievably ridiculous and significant that it must be emphasized: You can now charge your monthly mortgage payments DIRECTLY to your credit card.

Oh sweet sweet credit bubble!

" American Express Co. will allow consumers to charge monthly mortgage payments, making them eligible for perks including rewards points on airline travel and hotels. "

That sure sounds good. Put it on the card, collect points and miles, and then pay it off that billing cycle thereby avoiding punishing credit card interest rates. However, in reality the individuals charging to their cards will be exactly the kind of individual you wish did not even have a credit card. They will be the ones already in a financial death spiral and will be using their cards as one final sad little postponement of inevitable foreclosure.

Now for the fun stuff:

May 23rd 2007: " The American Express Rewards Mortgage program with American Home Mortgage Corp. starts today, Christine Elliott, a spokeswoman for American Express said."

August 2nd 2007: " American Home Mortgage Investment Corp. plans to halt operations, becoming the second-biggest residential lender to fail this year as bad loans spread to people with good credit records. "

That was quick.

If I can't pay my monthly mortgage payment @ 6.5% and therefore charge it to my card, what happens when I get THAT monthly bill @ 19.9%?

Brilliant. Just brilliant. All of it.

Source: American Home Will Close as Loan Demand Collapses (Update4) (
Source: American Express Allows Mortgage Payments on Cards (Update3)(
Source: Credit Brothel Raided, Even Piano Player Not Safe: Mark Gilbert (