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Debt Consolidation or Debt Perpetuation?

[Feb 8, 2009.]


Ok so it’s official, American Express has announced they will allow you to pay your mortgage payments with your credit card.   American Express has done it’s homework and has had some successful ventures in this area once before.  They introduced the luxury rental payment program and the luxury condo down payment program in the past few years and the Express Rewards Mortgage program is American Express’ latest program.

Express Rewards Mortgage program, designed for the consumer seeking a new or refinanced prime loan, provides cardholders with the ability to pay recurring monthly mortgage payments on their American Express Card; delivering convenience and security since they will have one less check to write and one less due date to remember. It also offers Cardmembers another opportunity to earn membership rewards, cash back, airline or hotel points or other types of rewards affiliated with their card simply by paying their monthly mortgage.

The Express Rewards Mortgage program is open only to American Express (AXP) consumer card members and applies to new mortgages for a home purchase or refinance of a qualifying prime loan offered by American Home Mortgage (AHM).

The card holders will have to pay a one-time fee of $395 to the lender for enrollment in the program at the time of closing, the credit card and travel services company said in a statement. In order to qualify for this feature, cardholders will have to finance their mortgage with American Home Mortgage Corp. Those who currently own a home can have their loans refinanced with this lender to participate in the program.

Although this is an interesting concept and American Express has been successful venturing in this area before, this venture could present problems for both American Express and homeowners.  Credit to pay debt adding even more debt, not sure if this is the right solution but the reward points will come in handy.

Source: American Express Press Release


About Author:

Brent Lane is a Mortgage Consultant in Roseville, California. He helps homeowners in California with their mortgage financing and writes on his BLOG at www.thelanegroup.blogspot.com

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