By Lois Guchu


5 Min. To Read

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Chase set the credit card rewards world abuzz May 7 when it announced that existing owners of Sapphire, Sapphire Preferred, and Sapphire Reserve credit cards would receive 100,000 bonus points for taking out a mortgage with the company. Card users can redeem the points for cash, gift cards, and discounted travel. Millennial-aged consumers are by far Chase Sapphire’s largest target market, and the offer seeks to get these consumers, who may be in the market for their first homes, to use the company as their lender.

Chase recently lowered the Sapphire card’s bonus points from 100,000 to 50,000, but the company hasn’t shied away from sharing its motivation for the new offer. “Offers like this one may encourage customers who signed up for their cards to develop “a relationship” with Chase instead of using the card for its sign-up bonus and then abandoning it,” says a company spokesperson. But is the offer as advantageous to Sapphire credit card owners as it sounds?

*The Fine Print *

To get the 100,000 bonus points, you have to be approved for a Chase mortgage, and the mortgage has to close. The mortgage has to be a first mortgage, so if you own already own a home, you aren’t eligible for the bonus points, unless you take out a mortgage to buy a second home. Card holders who refinance their mortgages with Chase aren’t eligible for the bonus points either.

Chase Sapphire credit card holders who meet the qualifications for the bonus points may face tax implications, according to information posted on Consumers typically aren’t required to pay taxes on credit card rewards earned for making purchases, but they may be taxed for points gained from opening a mortgage account. The company advises credit card users that they may receive a 1099-MISC at the beginning of the coming year.

The window to act on the offer is fairly short. The offer, which became active May 7, expires Aug. 6, 2017, so cardholders interested in the bonus points should act before that date. Furthermore, Chase says it reserves the right to cancel the offer at any time and without warning. The company has altered its bonus points deals without warning in the past, so this is something cardholders may wish to keep in mind before taking out a mortgage specifically to get the points.

Food for Thought

Bonus points aside, your ability to pay your monthly mortgage comfortably should dictate which lender you chose for your mortgage. If you go with Chase, you’d have to commit to its current interest rate, which at 4% is competitive, but other local and national lenders may have similar or better deals that may work better for you based on your credit profile and geographic location.

Certainly, having a Chase Sapphire credit card means there’s a chance you may have the credit profile to get your mortgage approved, but new techniques for determining your creditworthiness may come into play. More lenders today use trended data rather than snapshots showing things like your credit score and whether you pay your revolving accounts on time. Trended data offers a much more detailed look at your credit spending habits, as well as when and how much you pay on your accounts monthly. This helps lenders come to a much more realistic conclusion as to whether you’re a good credit risk. So, how you’ve been using your Chase Sapphire card may positively or negatively impact your ability to get a Chase mortgage and get the bonus points.

Getting your mortgage through Chase may be worth considering, especially if you qualify and the company offers you a competitive interest rate that results in a manageable monthly payment, as well as other bonuses the company offers its mortgage customers. Many users of credit cards that offer highly attractive bonus points often max out the cards and pay the balance monthly to get the points. But as a home may be the biggest purchase you make, opting for a conservative approach to using credit could save you more money than the bonus points promise.

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