A fairly new fintech has partnered with a small-business-focused bank to create a credit card product that offers rewards points when you pay your mortgage.
The Mesa Homeowners Visa Signature Preferred credit card is only available through a waitlist process, though applications should open up more broadly next month, according to Tina Moore, head of commercial and general manager of cards and rewards at Mesa. Waitlist or not, you should think hard before putting your name down, as you should before applying for any new credit card.
“You probably don’t need more credit cards now; you probably need less,” says Tom Scanlon, certified financial planner and financial advisor at Raymond James in Manchester, Connecticut.
[Read: Best Credit Cards.]
How Does the Mesa Homeowners Card Work?
The Mesa Homeowners card debuted in November and is issued by Salt Lake City-based Celtic Bank.
The credit card is Mesa’s only product besides a mortgage marketplace, which consumers can use to connect with lenders about mortgage and refinancing options.
“Our mission is to reward homeowners on every dollar that they’re spending on their home,” says Moore.
Housing is the biggest line item expense for many households. Though earning credit card points on mortgage payments is sometimes possible if you’re willing to jump through a few hoops, doing so often isn’t worth it.
With Mesa, cardholders link the accounts they use for mortgage payments to their Mesa apps and earn one point for every dollar of their monthly mortgage payment.
“The transaction itself doesn’t go on the card, but it is a part of the value proposition of the card,” Moore says.
Renters can use the Bilt World Elite Mastercard to earn points on their rent payments, though the transaction goes directly on the credit card. However, Wells Fargo, the bank that issues the Bilt Mastercard, is losing millions on the product, the Wall Street Journal reported last year.
“Our ultimate goal is to give as much value back to the customer,” Moore says. “The homeowner is one of the highest-spending consumers.”
The Mesa Homeowners card doesn’t charge an annual fee, but it does come with a 25.24% annual percentage rate on purchases. This is a fairly typical APR for a rewards credit card, but interest charges can add up quickly if you carry a balance.
[Read: Best Credit Cards for Good Credit.]
What Perks Does the Card Offer?
The card’s benefits include statement credits to cover eligible wholesale club memberships, eligible home maintenance expenses and pet care.
The card also earns Mesa Points as follows:
— One point per dollar on linked monthly mortgage payments
— Two points per dollar on grocery, gas, EV charging and other eligible everyday expenses
— Three points per dollar on home improvement, decor, maintenance, utilities and other eligible home-related spending
— One point per dollar on all other spending
Mesa Points don’t come with a standard valuation, though Moore says they’re comparable in value to Chase Ultimate Rewards and American Express Membership Rewards points.
Besides statement credits, other redemption options include gift cards and travel booked through Mesa’s travel portal. The travel portal will offer travel loyalty program points and transfer partners in the first quarter of the year, Moore says.
Moore says the company doesn’t intend to add an annual fee. The card also doesn’t charge a foreign transaction fee.
[Read: Best Starter Credit Cards for Building Credit.]
Is the Mesa Homeowners Card Worth It?
Credit card points optimizers may be especially excited by the idea of earning points for paying their mortgages. But adding another credit card to your wallet doesn’t come without downsides.
When you apply for a new credit card, it triggers a hard inquiry into your credit, which can cause your score to drop slightly. Also, having another credit card to keep track of can complicate your financial life. Plus, learning a new rewards program and how to maximize the value of your points can be a headache.
The Mesa Homeowners card offers a unique package of points-earning categories, which Moore says sets it apart from cards that serve consumers who spend a lot on travel and dining, which may be better fitted for younger, urban consumers.
“There’s a lot of cards in the market at the minute that solve for that kind of demographic and use case,” she says. “What we have done is recontextualized this idea of premium benefits, but for the homeowner.”
If opening a new credit card is right for you, but you’re mainly interested in earning points on groceries or gas, you should explore other options. You can also find cards with more niche rewards categories, such as the Wells Fargo Attune Elite Mastercard.
Also, note that the card doesn’t offer balance transfers or cash advances. These are fairly standard credit card features, but cash advances generally aren’t a good idea, and you can find better credit cards for balance transfers.
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You Can Earn Points for Paying Your Mortgage With the New Mesa Credit Card originally appeared on usnews.com
