Pay with Plastic and Pay Off Your Home

Screw air miles; pay off your mortgage with credit card rewards.
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NEW YORK (MainStreet)—As mortgage rates turn the corner and begin to rise, you may be looking to find any way possible to reduce your balance and increase the equity in your home.

Use your credit card.

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It may seem counter-intuitive, but it's possible: pay with plastic, reduce your mortgage. That's the concept behind a credit card rewards program that actually helps you pay down your mortgage rather than accrue points to buy a blender -- or for air miles that expired six months before you tried to redeem them.

The Home Rebate Card has allowed home mortgage customers to use their rewards points automatically to pay down their mortgages to the tune of $50 million since its launch in 2007. Most purchases made with the credit card generate 1% rebates that accumulate into $25 increments. The rebates are then automatically applied to the principal of a linked Wells Fargo mortgage. There is no limit to the amount of rebates you can earn.

Also see: Go Ahead With That Reverse Mortgage

It could mean a savings of thousands of dollars in mortgage interest. In fact, Wells Fargo says a homeowner with a $150,000 mortgage spending $1,500 a month with the card could reduce his mortgage term by more than a year.

"The card is just one example of how we help customers make smart use of their money and achieve their financial goals," says Beverly Anderson, head of Wells Fargo's Consumer Financial Services group. "The Home Rebate Card provides a way for customers to manage day-to-day spending while automatically paying down what is likely their largest debt – their mortgage."

--Written by Hal M. Bundrick for MainStreet