American Express Introduces First-Of-Its-Kind Mortgage Payment Plan Via Credit Card

New York, NY (AHN) - In a first of its kind offer for the credit card industry, American Express has announced that cardholders will be able to pay monthly home mortgage bills on the American Express Card.

American Homer Mortgage Corp. is the first lender to introduce the Express Rewards Mortgage program.

Sanjay Sakhrani, an analyst at Keefe Bruyette & Woods told The Street.com, "American Express is trying to get into recurring payments" in order to encourage charging things such as gas bills and rent. Adding, "That assists their spending volume and also provides rewards to consumers and makes their card product more attractive," says Sakhrani. "My sense is that over time these partnerships should expand and should go to other card lenders as well."

Placing mortgage payments on the credit card "certainly increases the credit risk or the severity risk, but remember they're [lending] to the affluent consumer," Sakhrani said. "This consumer has a pre-existing credit line already. It certainly is scary, but you have to trust that they're issuing cards to higher-quality consumers, which I do."

A spokesperson for American Express said, "These are highly responsible, highly creditworthy consumers who are driven by rewards and convenience."

An independent research survey showed that customers preferred to pay monthly mortgage payments via credit cards. The survey, conducted by American Express, also revealed that consumers were motivated by the incentive of earning rewards such as cash back, airline or hotel points.

"By introducing an entirely new industry to card acceptance, American Express is providing tremendous value to our Cardmembers, Issuers and our Merchant partners," said Bill Glenn, president, Establishment Services North America and Global Merchant Network Group, American Express.

Glenn added, "The ability to pay recurring monthly mortgage payments on the Card, typically a consumer's largest monthly expense, brings unprecedented convenience and rewards to our Cardmembers. This builds on the American Express tradition of innovation, enabling our Cardmembers to use their Card where and when they want to spend in categories such as luxury apartment rentals, private jets and corporate events."

American Express Cardmembers who qualify for new purchase or refinance loans with American Home Mortgage need to pay $395 to enter the Express Rewards Program.

"The American Express Cardmember represents a very attractive customer segment for American Home Mortgage as we continue to grow our direct-to-consumer business channel," said Debbie Holiday, Senior Vice President of Sales and Marketing for American Home Mortgage's Direct Group.

She added, "This innovative service will enhance our ability to expand our reach into a highly affluent market segment and offer Cardmembers increased flexibility and convenience."

American Home Mortgage Investment Corp. is a mortgage real estate investment trust.