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The Pros and Cons of Buying a Home With a Credit Card

If you have a high credit limit and the home you want to buy is within that limit, should you buy the home with your credit card? In many ways, it seems like a great option. The biggest reason being that you would be able to skip the entire mortgage process, one of the most dreaded aspects of buying a home. But before choosing this method of payment, consider the pros and cons of buying a home with a credit card.


  1. You will not have to pay any costs or fees related to a mortgage.
  2. You will be able to avoid the meticulous and time-consuming paperwork that comes with a mortgage.
  3. The majority of people who purchase a home with a credit card instead of taking out a mortgage are able to pay off their debt at a quicker rate. Though both the mortgage and credit card have interest, the mortgage comes with extra costs.


  1. The monthly payments for your credit card are going to be much higher than the typical mortgage. You will have to be careful that your debt-to-income ratio does not go out of proportion, where you are not making a sufficient amount of money to cover your debt. This will hinder your ability to increase your credit limit and secure a loan.
  2. Credit card debt decreases your credit score. Credit card debt makes up one third of the FICO credit score. This is going to make it difficult for you to be accepted for a loan in the future.
  3. If you max out your card in order to purchase the house, there are a number of areas you should be cautious of. First, your credit limit and credit score will decrease while your debt limit will increase. Second, you will be unable to use your credit card for any emergencies while your card is maxed out. This could cause quite a bit of stress depending on the situation.

When trying to determine whether or not to purchase a home with your credit card, seek the advice of professionals. Buying a home with a credit card is a risk. Before doing it, make sure you have a set and secure plan on how to navigate your way through your finances safely.

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