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Did you know you can use gift cards to pay your home mortgage?
Yes, that is true, and I will walk you through the steps so you can do it, too.
Home mortgages are typically impossible to pay using credit cards or gift cards, but in this blog post, I will show you how to use a service called Plastiq to liquidate your growing stack of gift cards to send mortgage payments.
If you have gift cards you haven’t touched in months or years, this method might be perfect for you.
Nov 2023 Update: Delivery Fees
Plastiq recently added delivery fees to all payments.
Please add this fee to each payment type whenever sending mortgage payments through Plastiq.
There are additional delivery fees associated with each payment and are broken down in the below chart. These fees cover our costs associated with sending payments based on your vendor’s preference (for example the cost of maliing a check or sending a wire transfer through our partner banks). These fees are detailed on the payment review screen prior to submission of your payment and will fall under the Delivery Fee line item.
Plastiq.com
| Payment Delivery Method | Delivery Fee |
|---|---|
| Check | $1.49 |
| ACH/Bank Transfer | $0.99 |
| Billpay | $0.99 |
| EFT | $0.99 |
| Domestic Wire | $8.99 |
| International Wire | 39.00 |
What is Plastiq?
Plastiq.com is a service that allows you to pay your bills with a credit or debit card.
Although Plastiq charges a 2.9% service fee plus the delivery fee, it could be worth it if you do not have any other methods to convert your Mastercard gift cards to cash.
And if you ask me, using my gift cards to pay off my mortgage is a much better option than letting them go unused.
Before Using Plastiq, Check PayPal Bill Pay
Since Plastiq charges a 2.9% fee, it is unappealing to many folks.
Before using Plastiq, check if your home mortgage lender or credit union is on PayPal Bill Pay (PPBP).
Paypal Bill Pay accepts mortgage payments using credit cards without charging extra fees, but only if your lender allows it. It’s worth a try, though!
If your mortgage lender accepts credit card payments via Paypal Bill Pay, you have struck gold as you will completely avoid debit card/credit card transaction fees when using it.
It is arguably the best and cheapest way to send mortgage payments using your debit and credit cards.
The only downside is that not all mortgage companies are on PayPal Bill Pay and not all accept credit cards.
However, check periodically as they add new billers frequently.
What Type of Gift Cards to Use?
Plastiq currently accepts Mastercard gift cards or Mastercard credit cards for mortgage payments.
American Express and Visa gift cards can be used for other payments on Plastiq, but not mortgages.
Where Do I Buy These Gift Cards?
The gift cards I use to pay my mortgage are purchased using credit cards that earn travel points when used at specific merchants.
Ultimately, these travel points are what I use to book free or discounted travel.
Staples and Office Depot frequently run gift card promos where you can buy Mastercard gift cards on sale.
Just make sure to use a credit card that earns a category bonus at office supply stores.
Is the Plastiq Fee Worth It?
Plastiq charges a 2.9% service fee, so make sure you crunch your numbers before using this strategy to send mortgage payments.
Update: Given that each gift card will now incur an additional charge of $0.99 to $1.49 delivery fee, please determine if this liquidation method is still cost-effective for you. I would spend those gift cards elsewhere if you have other ways to convert them to cash.
When Do These Gift Cards Go On Sale?
We announce these gift card deals at our free Facebook Group – Travel Miles and Points. Feel free to join other points enthusiasts there!
This is Not For Everyone
This strategy will only work for folks willing to pay the 2.9% Plastiq fee plus delivery fee when liquidating Mastercard gift cards purchased using credit cards that earn travel rewards.
Since this also works with Mastercard credit cards, it can be a great way to meet the spending requirements of new Mastercard cardholders and earn generous welcome bonuses.
At any rate, crunch the numbers first to see if you think this service is worth the fee before using Plastiq.
Steps In Using Gift Cards on Plastiq
Step 1: Sign Up for a Plastiq Account
The button below is a referral link.
Step 2: Click “Make a Payment”
Click the “+” sign to make a payment
When you click the “+” sign, you will also be given the option to make multiple payments.
Step 3: Add a Vendor
You only need to add a “vendor” once by clicking “Create New Vendor“.
Plastiq will then indefinitely save all previous payees and payment methods until you remove them.
You can also indicate how you want the funds delivered to your recipient. Your options include ACH, Check, or Bill Pay.
If you have already saved a payee, click the drop-down arrow and select the agency to which you want to send your payment.
In the example below, I selected to send payments to Wells Fargo.
Step 4: Enter Your Payment Details
Since each Mastercard gift card has $200, I subtracted the 2.9% fee and typed in the difference in the amount field ($194.36).
You can pay any amount as long as your payment does not exceed the gift card amount.
Next, fill out the rest of the form:
- Pay on behalf of (your name)
- Invoice or Account Number
- Memo for recipient
New: Plastiq Now Charges Delivery Fees
Step 5: Add/Select Your Payment Method
Since we are paying using Mastercard gift cards, we need to enter each card individually by clicking “+ New Payment Method“.
Plastiq makes keeping your payment information on the site easy, so you don’t have to enter it every time. I only delete my cards when I know the vendor has received my payments.
Step 6: Choose a Delivery Option & Date
Since I am sending multiple partial payments to my mortgage lender, I schedule all of my payments to arrive at the same time before the payment due date.
If you schedule all of your payments to arrive at the same time through Plastiq, they will be sent as one payment.
Heads up: Whenever I send partial payments to my mortgage lender through Plastiq and other sources (i.e. bill pay from another bank), I always call my lender ahead of time to let them know. For example, Wells Fargo wrote a note on my account saying that all future partial payments would go toward my monthly mortgage instead of the principal balance. They now have a permanent alert on my account that all partial payments are specifically for home mortgage payments.
An advantage of using Plastiq is that it allows me to be somewhat flexible about how I send payments.
This allows me to simultaneously liquidate unused Mastercard gift cards and use new Mastercard credit cards to meet minimum spending requirements. The remainder can be paid in cash.
It is not unusual for me to send my mortgage lender 2-3 partial payments to cover a single mortgage payment at any given month.
My mortgage payments typically consist of the following methods:
- Partial payments using Mastercard gift cards through Plastiq (2.9% fee)
- Partial payments using a NEW Mastercard credit card through Plastiq (2.9% fee)
- Bill Pay from my bank account (free)
Step 7: Upload an Invoice (Optional)
Step 8: Schedule Payment
Verify all the information is correct, then click “Schedule Payment“.
Step 9: Wait For Payment Confirmation
Plastiq will confirm that the payment was successful. You will also get an email confirmation.
Step 10: Check the “Scheduled” Tab
Check the “Scheduled” or “Completed” tab to ensure all your payments are accounted for.
Plastiq will also send you an email once the payments have been delivered.
Step 11: Alert Your Mortgage Lender About Partial Payments
Notify your mortgage lender that incoming partial payments should be applied toward the monthly mortgage.
| You can use this script: “I will send several partial payments in the next few weeks. Can you note on my account that I would like any future partial payments to be applied toward my monthly mortgage and not toward the principal? Thank you!” |
After I sent the above request to Wells Fargo, all of my statements now include the following disclaimer:
Partial Payments: Any partial payments received are not applied to the mortgage but instead are held as Unapplied funds (shown above in the Account summary section). If sufficient funds are received to cover a full payment, the funds will then be applied to the mortgage.
Frequently Asked Questions
What is the Maximum Amount Plastiq Allows?
Although Plastiq can process payments made with personal prepaid debit cards, there is a limit of $10,000 per month. Plastiq will decline payments that exceed this amount.
How Many Gift Cards Per Day Can I Use on Plastiq?
I have inconsistent data points. Some days, Plastiq stops accepting payments after five gift cards. Sometimes, it can accept more than ten.
When Plastiq stops accepting after 5, you can try using their service again the next day. Alternatively, you can try to log out and log back in using a different browser.
Final Thoughts
If you have many Mastercard gift cards sitting around that you never use, put them to good use by paying your home mortgage with them!
By using Plastiq.com, you can finally pay your house payments using gift cards, even if your mortgage company doesn’t accept them.
While Plastiq.com charges a small fee, this fee may be worth spending if you earned travel rewards from the gift card purchase.
Plus, isn’t liquidating gift cards better than having them accumulate dust?
Nonetheless, I love that I can now leverage mortgage payments to help me inch closer to the vacation of my dreams using travel points. Thanks to Plastiq!
Have you used Plastiq.com yet to pay your mortgage using gift cards that earned travel rewards? If yes, how was your experience?
EDITORIAL DISCLOSURE – Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, hotel, airline, or other entity. The content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.
I read your post about using MCGCs to pay your mortgage using Plastiq. I received an email from Plastiq claiming they did not take GCs. How are you using the MCGCs through Plastiq? Thanks
I click “credit cards”.
Thanks for this very straightforward explanation!
In your Wells Fargo example, you send 7 payments … does your bank require you to indicate whether each payment is a “partial regular payment” or what portion should go for principal or interest? Do you (or did you) have to follow up with your bank to ensure they allocate properly?
I tried this some years ago with the Pentagon Federal Credit Union and they misapplied my payments, and it was a hassle to get them to re-apply the payments every month. But maybe it’s worth trying again.
Are you pausing paying through Plastiq while their ownership changes?
Hi Gerry! Thank you for reaching out. These are great questions. Regarding payments, I called Wells Fargo and requested that all payments go towards my mortgage. So, they wait until all the partial payments are enough to pay one month’s worth of mortgage. I have reached out to another lender (NewRez) and they were able to do the same for me for another property. Just call and have them write a note on your account.
Sorry to hear about the hassle. If your lender is a credit union, have you checked PayPal BillPay? There are a bunch of credit unions on there, and you may be able to send payments through there to avoid the 2.9% Plastiq fee. I do have an article about it, just google “Paypal BillPay” and look for my article.
Regarding the ownership changes, I have not paused my payments. To the contrary, I’ve ramped them up so I can liquidate all of my MCGCs before the situation worsens. I hope that they can get out of this quagmire soon. Disclaimer though – this is not advice, please do what is comfortable for you 🙂
I heard that Plastiq has recently filed for bankruptcy. Any insights whether we can continue to send mortgage payments?
It’s been BAU (business as usual) for me with Plastiq, so it will depend on your comfort level and risk tolerance. As for me, I’ve sent multiple gift card payments to pay my mortgage despite the bankruptcy announcement and they have all been going through smoothly. Thanks for asking!
Does it have to be physical gift cards or can it be e-gift cards?
Hi Bill. I use physical and e-gift cards as long as they are Mastercards.
I did this but my mortgage lender applied my gift card payments towards the principal. Has that ever happened to you? Do I call to ask them to move it towards my mortgage. Thanks so much for this step by step guide.
HI Trisha, thanks for reaching out. Yes, that has happened to me. You can troubleshoot by calling your lender and asking them to move your payments from principal to monthly mortgage. They were able to do this for me without any hiccups. Keep me posted.
Hey, thanks for this – do you need to call your mortgage company every time you’re sending partial payments?
Hi Lance, I only called once to both Wells Fargo and NewRez.I updated the post to include a script I’ve used when I called. Check Step 11.
Hey! I’m just learning how to set this up – in your example in step 3, you’re sending money to Wells Fargo which just happens to be the same bank that I’m paying my mortgage to. For mortgage payments, do you typically choose ACH, Check, or Wire? I assumed it was through ACH, but I don’t know what the routing number would be in this case (can I just use the same routing number that a checking account at Wells Fargo would have, or is there a mortgage-specific number?)
Hello. Great question. I send through Bill Pay (ACH). When you add a biller, do the following steps:
a. Search for Wells Fargo “Bill Pay”
b. Plastiq will generate a drop down menu of various addresses, select the address where you want to send your payment to.
c. Follow the rest of the prompts.
Recently, Plastiq started charging a delivery fee per payment type, so sending ACH will incur an additional $0.99 fee, so make sure you factor that fee before sending payments. Keep us posted.
Hi have you done this recently? Paying my mortgage with MCGC’s via Plastiq worked without any issues until this month. Just tried to make a payment for my mortgage payment due 3/1 using 20 or so $200 GC’s from Staples and every single payment declined. Both Plastiq and Blackhawk have not been very helpful in figuring out the issue. Thanks
You’re right. They have stopped working. Bummer! Plastiq appears to be blocking the MCGC BIN#. I’ll update the post that this is no longer working as of this week. Thanks for sharing the DP.
No luck getting Wells to accept payments that will process as regular payments w/o either applying to principal OR getting automated payments ahead of schedule OR deposited to escrow OR returned to me.
Correspondence:
This letter is in regard to the following mortgages: *snip*
I would like to establish that partial payments made for these loans be held as unapplied funds and NOT be applied to principal payments.
Can you please establish this for these accounts? The language I’ve seen reported for these terms at Wells is:
“””
Partial Payments: Any partial payments received are not applied to the mortgage but instead are held as Unapplied funds (shown above in the Account summary section). If sufficient funds are received to cover a full payment, the funds will then be applied to the mortgage.
“””
Can you further reply to clarify how this will interact with autopay.
Question 1: If there are unapplied funds then will the amount paid by autopay be for the full payment amount or will it be automatically adjusted to only cover the shortage?
Question 2: If there are sufficient unapplied funds then will the monthly payment come from the unapplied funds and autopay for that month not occur (while remaining scheduled to occur for the next month)
Thank You!
=>
Subject: We’re responding to your request
Case Number: *snip*
Account number ending in: *snip*
Dear *snip*:
Thank you for your patience while we looked into your request. We are responding with the information you need.
Payment applications
Unapplied funds is where partial payments or deposits are held while they wait to be applied to another payment element, such as principal or escrow. Funds in the unapplied balance at the time of your automatic payment will not readjust the amount that is automatically withdrawn. If there is enough in the unapplied funds account to complete a full payment, that amount will typically apply itself to the next payment due, and the automatic payment will still be drafted, causing two months of payments to be applied. This does not help pay down interest sooner.
Making additional payments toward your principal balance will help to pay off your account sooner. Reducing your principal balance may allow you to pay less interest with each payment and may increase the equity in your home sooner than originally amortized.
The status of your account can impact how we apply your payment. It may differ from your origination documents depending on the status of your account. Typically, when we receive a full monthly payment, we apply the funds as outlined in your Mortgage:
First: accrued interest
Second: principal
Third: escrow, if possible
Unless you’re approved for a specific payment plan, we don’t recommend submitting partial payments. Funds received, which don’t equal a full payment, may be applied or deposited in the following ways:
* Applied to fees
* Applied as a principal curtailment
* Deposited to your escrow account.
The funds may also be returned to you. We recommend sending full payments to us to avoid payment application issues.
If you’re interested in making partial payments on a regular basis, our Preferred Payment Program may benefit you. Please call customer service at the number provided below.
How to contact us
We appreciate the time and effort you took to contact us. We accept telecommunications relay service calls. If you have questions, please contact me at *snip*. I am available to assist you Monday through Friday, 7:30am to 4:00pm Central Time. If you require immediate assistance and I am unavailable, you may reach our Customer Service department at 1-866-234-8271. Representatives are ready to help you Monday through Friday, 6:00am to 10:00pm and Saturday 8:00am to 2:00pm.
Sincerely,
Alex C
Customer Service Representative
Home Lending Information Requests
HI Yaarp, thank you for the DP. All of my extra payments are going towards the principal. Can you clarify what your preference is for excess payments?
> Can you clarify what your preference is for excess payments
What I’d ideally want is that excess payments up to some cap be saved and applied to later mortgage payments and that autopay would be aware of these saved funds and not charge on months when it was already fully covered and charge only the remainder for a payment when it was already partially covered. In other words, I’d prepay in fancy pants ways when I’m so inclined and autopay would server as a backstop to make sure that I don’t miss a payment or become delinquent.
Wells says that they do not support this. I got (yet another) response about this from wells which gives a pretty good explanation of how they work and what options they provide. Here it is:
==
Unapplied funds and modified posting logic
We’d hoped to speak with you about your request but weren’t able to reach you. We understand you to be requesting that partial payments and/or extra funds received in excess of the monthly payment no longer be applied as principal curtailments (ie. reductions) once the monthly payment has been received and applied to the account. As we will discuss below, we are not currently able to arrange this. We also understand you to be asking how this would interact with your current recurring withdrawal preferences. We want to help you understand the available options.
We should begin by advising that we don’t recommend our customers send partial payments. Among several reasons, this is because partial payments are more likely to be misapplied. Payment application logic is quite a bit more complicated than it first appears. Our customers that send partial payments are much more likely to have them applied other than as intended, and to spend their personal time on efforts to have payment applications reapplied.
If a partial payment or a payment in an amount in excess of the monthly payment will be sent, we recommend the payment be made by check, be transmitted to us by mail, be accompanied by a payment coupon, and include a brief message (written on the coupon) indicating to what payment element or elements you intend the payment be applied. This is the best method to make a one-time exception to how a partial payment (or funds in excess of the monthly payment) would otherwise be applied. However, even when you do take this step, your payment may be applied other than as requested if those elements are not currently eligible. For example, a partial payment for a delinquent account would need to be held unapplied, even if you requested it applied to principal.
If you still want to pursue making partial payments or paying more than the monthly payment each month, it may be possible to arrange that excess funds be handled differently on an on-going basis. When we make a standing exception to the logic according to which your payments are applied, this is known as modified posting logic. Please note that you are not currently eligible for modified posting logic because it is incompatible with recurring drafting. Our recommendation is that you remain on recurring drafting.
If you wish to pursue modified posting logic despite our recommendation, the next thing we’d want to discuss is what will be done with remaining funds once the monthly payment has been made. As you allude in your letter, currently any funds received in the month in excess of the monthly payment are applied to the account following the application of the monthly payment. You may be less familiar with the order of application for these extra funds. It is currently:
Corporate advance (if funds advanced on your behalf to pay escrow and other items)
Later charges
Other fees
Non-sufficient funds fees
Principal curtailment
In addition to this application order, partial payments in the exact amount of certain items, such as escrow shortages, fee balances, or specific fee assessments (for example the amount of one late fee) often get picked out by our systems for application to the presumed intended balance.
Although it may be possible to hold extra funds unapplied for a time with modified posting logic, the goal of doing so would be to pay the account ahead by one or more months (typically limited to twelve months ahead, after which additional funds in excess of one monthly payment will once again be applied as principal curtailments). In your letter, you seem to be asking for modified posting logic so that extra funds paid in one month be held unapplied in order to dynamically adjust down the amount of your recurring draft for the following month. As mentioned above, this option is not offered because accounts on recurring drafting are not eligible for modified posting logic. We regret that this is not the expected response.
If you still wish to pursue modified posting logic for the account, or have additional questions on the available options, we recommend you contact use at one of the numbers below. If you’d rather continue communicating about this in writing, you can send us a follow-up at:
Wells Fargo Home Mortgage
PO Box 10335
Des Moines, IA 50306
Fax: 1-866-278-1179