Although the answer may surprise you, you can buy a house with a credit card in the United States, although it will depend on several factors whether you can carry out this transaction.
For most people in the United States, and in fact, in any country in the world, it is easier to buy a home through a mortgage loan granted by various banking institutions. However, there are those who might think that an alternative would be to pay for a house with a credit card. How feasible is it? In Globe Live Media we explain it to you.
Credit cards are a key tool for making many financial movements in people’s lives, we could even say that they are behind the most common, since their access is easy and fast. If you have doubts about whether it would help you to buy a house, even if the answer surprises you, this is YES, although you have to be well aware that it may not be the most intelligent action.
It is not as simple as buying a television, a cell phone, a room or any other object. To begin with, to buy a house with a credit card, you need to have a credit limit high enough to buy a house anywhere in the United States.
According to research by Experian, the average credit limit on all credit cards for Millennials is just over $20,000. How much does an average house cost? Prices are variable, but for example, in Detroit the average cost is around $60,000 in 2022. So let’s face it, having enough money to pay for a house with a credit card is likely for very few people.
In addition, you would need a good financial history and a solid credit score, so that you can make use of it in the purchase of a property. Assuming you have enough money in your credit limit to make this a reality, the next step is for the seller to accept this form of payment.
According to experts from The Balance, most sellers will not, as they need to be sure that the funds are available to be transferred immediately to the owner of the property for sale. In some states there are even laws that require the use of a certified check to carry out the transaction.
In addition, a cash advance is usually required. And if you plan to withdraw it from your credit card, then you should take into account that credit card issuers charge you a withdrawal fee on cash advances, which is up to 5%. Interest charges begin the moment you take out a cash advance.
Buying a house with a credit card may be feasible for you, if you have a sufficient credit limit and if the seller accepts it as a form of payment. But it is a credit that will be much more expensive compared to if you apply for a mortgage.
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