Credit card reward points can earn you anything from free airline tickets and hotel stays, to gift cards and electronics. But have you ever heard of one that will help you pay your bills?
Wells Fargo does that with the Home Rebate Credit Card. The Visa backed credit card is designed to help people pay down their mortgage with reward points. So every time you use your card for groceries, gas or new clothes – you invest a little more in your home.
How it Works:
Instead of collecting points to get a free trip or cash back, card members collect rewards to pay down the principal on their home mortgage. Every purchase you make, whether it’s for clothes or school supplies, your cell phone bill or a night out – you will be slowly paying down what is likely your biggest debt.
What’s nice about the Wells Fargo Home Rebate Credit Card, is that rebates are automatically transferred as payments towards your mortgage principal. Every time you earn a $25 cash back reward, it automatically applies that reward towards paying down your principal. Sure, it will take a lot longer to see the impact than saving up points for a new iPod. But, your home is an investment and every little bit helps.
Wells Fargo has a special offer to give new card members 3% back on gas, groceries and drugstore purchases for the first six months. That can add up quickly! If you spend
$2,500 a month on your card, you will earn $75 a month in rebates. Over six months, that’s $450 that will come off your mortgage principal.
After the first six months, the Home Rebate card offers 1% cash back on all purchases. That will bring you a $25 rebate for every $2,500 you put on the card. While it may sound like something only high rollers do, consider this.
You can pay most of your bills with your credit card to earn more rewards. Think beyond gas and groceries. Think about your utility and cell phone payments, the guy who does your lawn each week, and your daycare. Even magazines and web subscriptions can also earn you rewards. You just have to look around, you’d be surprised by how many places take Visa cards.
Calculate Your Rebate:
Over time, reducing your mortgage principal means you will pay less in interest and may even be able to pay off your mortgage in less time. It’s easy to determine how much you would save based on your current spending habits thanks to this calculator.
Simply type in your estimated mortgage, interest rate and how much you would put on your credit card each month. Ignore the prompts about applying for a loan and just hit the “Calculate” button. It will show you how much you will save in principal and interest rates, as well as how much sooner you can pay off your mortgage.
Wells Fargo provides this example, showing you could pay off a 30 year mortgage in less than 29 years if you charged $2,500 a month to your Home Rebate Card.
+ 6.25% Interest Rate
+ 30 Years
- $298 Annual Rebate
= $24,425 Total mortgage reduction including rebate, principal and adjusted interest
A bonus to the Home Rebate card is that there is no annual fee. However, you will pay a minimum $5 fee for each balance transfer, a minimum $10 fee on cash advances, and up to $35 for late payments. That is pretty standard for rewards cards.
A huge factor people don’t always consider, is the interest rate on the card. With the Wells Fargo Visa Home Rebate Card, new cardholders get 0% Annual Percentage Rate on new purchases and balance transfers for a full year. That’s a big incentive to switch.
After the first year, the card is like most others, carrying an interest rate of 11.15% – 25.99% variable APR based on the Prime Rate. Cash advances start at 23.99% and are based on your credit worthiness.
Who is Eligible:
The Visa Home Rebate Credit Card is offered as an incentive for new Wells Fargo loan applicants, as well as people who currently have Wells Fargo home mortgages. If your loan is through Citibank or another lender you are out of luck. Also, the credit card can not be used with many other Wells Fargo loans like commercial mortgages, HUD second mortgages and reverse mortgages.
Since the Home Rebate card is tied to Wells Fargo and Visa, it comes with extra features for free. Card members can use it with the Visa payWave, which lets you check out faster at the register by just waving your card in front of a special checkout reader. No swiping and no signing.
Card members can also get Wells Fargo Cell Phone Protection when they pay their monthly cell phone bill with their Home Rebate card. If your phone is stolen or damaged you can get up to $600 to replace the phone with just a $25 deductible.
Wells Fargo also provides Rapid Alerts to your phone if there is suspicious activity on your card and Zero Liability if someone uses your card without authorization. Since the Home Rebate card is backed by Visa, you will also get auto rental collision damage waiver, roadside dispatch and travel assistance.
Like any legal document, you have to read the fine print to see that if you default on your loan or go into bankruptcy you may be disqualified from the rebate program and forfeit your accumulated rebate. That’s also the case if the bank sells your loan, so make sure you read the Terms and Conditions carefully.
A Solid History:
You may have never heard about the Home Rebate card, but it’s not new. Wells Fargo actually introduced the card back in 2007. Back then, the housing market was starting to nosedive and the bank used it as a way for new mortgage applicants to pay down their loan just a little more each month.
Fast forward six years and the America is on the other side of the bubble. The housing market is starting to recover and more Americans are focused on paying down debt. If the card catches on, it would certainly boost the bottom line for Wells Fargo. The bank claims to issue about 30% of all home loans in the U.S., just imagine if every one of them were also making payments on a Wells Fargo credit card.