Kudos has partnered with CardRatings and Red Ventures for our coverage of credit card products. Kudos, CardRatings, and Red Ventures may receive a commission from card issuers. Kudos may receive commission from card issuers. Some of the card offers that appear on Kudos are from advertisers and may impact how and where card products appear on the site. Kudos tries to include as many card companies and offers as we are aware of, including offers from issuers that don't pay us, but we may not cover all card companies or all available card offers. You don't have to use our links, but we're grateful when you do!
Can You Buy a House with a Credit Card?
May 14, 2025
Quick Answer
While purchasing a home directly with a credit card is not an option, it can sometimes be used for smaller, related costs such as the earnest money deposit or appraisal fees.
Should You Buy A House With A Credit Card?
Let's weigh the upsides and downsides of this unconventional home-buying method.
Benefits
- Earning substantial credit card rewards, such as points, miles, or cashback on the purchase.
- Utilizing a 0% introductory APR offer for what is effectively a short-term, interest-free loan.
- Streamlining the payment transaction itself, bypassing the need for wire transfers or cashier's checks.
Costs
- Incurring high interest rates, far exceeding typical mortgage rates, if the balance is not paid in full.
- Paying significant credit card processing fees, which can add thousands of dollars to the total cost.
- Finding a seller and title company willing to accept a credit card for such a large transaction.
- Requiring a credit limit high enough to cover the full purchase price of the property.
How to Buy A House With A Credit Card
While unconventional, buying a house with a credit card is possible for certain expenses. This guide outlines the key considerations and steps for navigating this complex financial strategy.
- Confirm Acceptance and Fees: Before proceeding, verify that your mortgage lender, title company, or seller accepts credit card payments for the down payment, closing costs, or the full purchase price. Inquire about processing fees, which can be substantial.
- Secure a Sufficient Credit Limit: Your credit card's limit must be high enough to cover the intended expense. This may require requesting a significant credit line increase or applying for a new card known for high limits.
- Select the Optimal Credit Card: Choose a card offering a large sign-up bonus, high rewards rates, and a long 0% introductory APR period to maximize value. Using a resource like the Kudos explore cards tool can help you compare options.
- Develop a Repayment Plan: This is the most critical step. Create a strict budget to pay off the entire balance before the introductory APR period expires, avoiding potentially massive interest charges on a home-sized debt.
Impact On Your Credit Score
Using a credit card for a down payment or the full price of a home can have significant and immediate effects on your credit score. Here are the key factors to consider before making such a substantial charge.
- Credit Utilization Ratio: This ratio compares your outstanding balance to your total credit limit. A massive purchase like a house will dramatically increase your utilization, which can significantly lower your credit score.
- Payment History: Making a large payment on time can positively impact your score. However, missing a payment on such a huge balance would be severely detrimental to your credit history and overall score.
- Credit Inquiries: Applying for a new card or a credit limit increase to make the purchase results in a hard inquiry. This can cause a temporary dip in your credit score for a short period.
Alternative Ways To Buy A House
Rent-to-Own Agreements
A rent-to-own or lease-option agreement allows you to rent a home for a specific period with the option to purchase it before the lease expires. A portion of your monthly rent is often credited toward a future down payment. This arrangement can be beneficial for aspiring homeowners who need time to improve their credit score or save enough money for a traditional mortgage, effectively locking in the property while preparing for the purchase.
Seller Financing
Also known as owner financing, this method involves the home seller acting as the lender. Instead of securing a loan from a bank, the buyer makes payments directly to the seller based on agreed-upon terms. This can provide more flexibility in negotiations over the down payment, interest rate, and loan schedule. It is a viable option when the seller owns the property outright and is willing to take on the role of a bank.
Choose the Right Card to Buy A House
While there isn't a specific credit card designed for buying a house, the right card can help manage the associated costs. Finding one with a 0% introductory APR or generous rewards on large purchases can be a game-changer. Kudos' Explore Tool helps you filter through nearly 3,000 options to find the best card that aligns with your financial needs for this major life purchase.
If you want to maximize your credit card rewards, Kudos is the premier free shopping assistant for online checkout. We're also giving you $20 back after your first eligible purchase—simply sign-up for free with code GET20 and buy from a Boost merchant.
Frequently Asked Questions
Can I pay my down payment with a credit card?
Most lenders do not allow this, as down payments must come from approved sources, not borrowed funds like cash advances.
Are there fees for using a credit card for home-related payments?
Yes, payment processors and mortgage servicers typically charge convenience fees, which can be around 2-3% of the transaction.
How does a large credit card charge affect my mortgage application?
It increases your credit utilization and debt-to-income ratio, which could negatively impact your loan approval and interest rate.
Supercharge Your Credit Cards
Experience smarter spending with Kudos and unlock more from your credit cards. Earn $20.00 when you sign up for Kudos with "GET20" and make an eligible Kudos Boost purchase.
Editorial Disclosure: Opinions expressed here are those of Kudos alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.
