Credit card startup Mesa wants to reward homeowners with points for mortgage payments, but the math might not add up for everyone

The startup emerged from stealth mode in September 2024, staffed by veteran executives from Uber, Bilt Rewards, Robinhood, Block, and Capital One. Last week, it officially started accepting applications for its flagship product, the Mesa Homeowners Card (a waitlist opened last November).

Mesa’s hook is to offer rewards for a wide variety of home spending, most notably mortgage payments. Few mortgage companies permit people to directly charge their payments, which has closed off a lucrative stream of spending for cardholders looking to maximize their benefits.

Mesa has figured out a nifty workaround to the problem, which I’ll outline below. But here’s the bigger question: In a world saturated with rewards credit cards, is Mesa’s new offering worth it? The devil, as always, is in the details.

The Mesa Homeowner Card basics 

At its core, the Mesa Homeowners Card is a no-annual-fee rewards credit card that’s tailored to home expenses. It offers:

• 1X points on mortgage payments, up to 100,000 points annually
• 3X points on home-related expenses, including utilities, insurance, and HOA fees
• 2X points on groceries and gas
• 1X points on all other purchases

To qualify for rewards on mortgage payments, holders must charge at least $1,000 per statement period on non-mortgage spending.

Mesa claims the card offers holders over $800 in annual statement credits and benefits, including monthly credits for pet care services, home improvement, and more. But as with any rewards credit card, the value of its benefits lies in how well they align with your spending and how you can use them. 

One issue is that Mesa offers a base redemption rate of just 0.5 cents per point for statement credits—an effective rewards rate of 0.5%. The industry standard for cash-back rewards cards is 2%, or two cents per point—and that makes the actual value proposition of the Homeowners Card a bit murky when compared to straightforward cash-back options.

How Mesa gives cardholders rewards on mortgage payments

How does Mesa reward their customers for mortgage payments without charging them to the card? Here’s their workaround: The company requires cardholders to link their bank accounts to the Mesa app, which allows the company to track mortgage payments indirectly.

This approach allows cardholders to capture rewards from what’s typically their largest monthly expense without increasing their credit utilization. Very few lenders or servicers let people pay their mortgages on a credit card—not only would the transaction fees be cost prohibitive for all parties, but additionally it would open a window for consumers to get hooked on exchanging low-interest mortgage debt for high-interest credit card debt. 

Jared Werksma, financial advisor with Northwestern Mutual, emphasizes paying your mortgage with credit cards would be incredibly unwise, given both extra fees and interest.

“We’re all so used to being able to put everything on a credit card or using Venmo for everyday transactions that we can get carried away,” says Werksma.  “It’s critical to stop and think about what you’re paying in terms of fees and interest when you’re using credit or third-party services.”

Mesa is not unique in offering rewards for housing expenses. Bilt, for instance, offers a credit card that lets people earn rewards from rent payments, but a recent survey sent to Bilt cardholders suggests a mortgage payment scheme is in the works. As of now, the company has yet to announce a plan to award points for mortgage payments.

Is the Mesa Homeowner Card worth it?

To see if the Mesa Homeowner Card is worth it, I’ll compare its rewards structure to a flat-rate 2% cashback credit card with no annual fee. Mortgage pricing is different for everyone, so I’ll work backwards to see what level of monthly payment represents a break-even value with the Mesa card. 

For this comparison, I’m counting Mesa’s stated cash-back value of half a cent per point. Other forms of redemption will likely add value, but cash back is the simplest. Here are my estimated spending figures:

• $500/month on insurance, HOA fees, and utilities—including internet and cell service
• $500/month on gas and groceries

With these numbers, the Mesa card would earn:

• 1,500 points on home expenses (3X category)
• 1,000 points on gas and groceries (2X category)

That’s a total of 2,500 points, worth $12.50 at 0.5 cents per point. A flat-rate 2% cashback card would earn $20 on the same $1,000 spend. 

To match the flat-rate cash-back card’s rewards rate, the Mesa card needs to deliver an additional $7.50 on mortgage payments. At 0.5% effective cash back on mortgages, a Mesa customer would need a monthly mortgage payment of at least $1,500 to equal the potential rewards of a 2% cash back card.

Considering that the average U.S. monthly mortgage payment is around $2,125, it’s safe to say that many homeowners could see upside by using the Mesa card. This value proposition should improve as the company rolls out more lucrative redemption methods, such as transferring the points to travel partners. The company says this option is coming soon.

The fine print and potential pitfalls

While the Mesa Homeowner Card concept is intriguing, there are other factors worth taking into account:

• Opportunity cost. The base redemption rate of half a cent per point for statement credits is lower than most competing cards. You may do better with a cashback card that provides a higher return on all purchases, even if it doesn’t reward your mortgage. 
• Category Limitations. The 2X category excludes major retailers like Costco, Sam’s Club, Target, and Walmart, which could significantly limit its usefulness for many families.
• Complexity. Managing multiple credits and benefits can be time-consuming. If you’re not diligent about using every credit each month, you might not realize the full advertised value.
• Spending Requirement. The $1,000 monthly spend requirement to earn points on mortgage payments could encourage unnecessary spending for some cardholders.

Then there are the unknowns, like alternative redemption values and the company’s long-term viability.

Redemption values

In an interview with the company, Mesa told Fortune that points would be valued at one cent each through its proprietary travel portal, which is now open. But the full range of redemption options and their values remains unclear. The real test will be whether Mesa can offer redemption values that compete with established players like Chase Ultimate Rewards or Bilt Rewards.

At the moment, we know that the cash-back value is a paltry half a cent per point. To be fair, Bilt’s points are only valued at 0.55 cents for rent payments, while Chase Ultimate Rewards can be cashed out at one cent each. 

Mesa plans to introduce points transfers to travel programs in the first quarter 2025, aiming for 1:1 transfers “where possible.” The specific partners and ratios could make or break the card’s appeal for travel enthusiasts. Given that Tina Moore, Mesa’s head of commercial, has a resume that includes Bilt and Amex, expectations are high for competitive transfer options.

Long-term viability

The sustainability of mortgage rewards is uncertain. Changes in banking regulations or partnerships could affect Mesa’s key feature. The program’s longevity will depend on the company’s ability to navigate the complex regulatory landscape of both the credit card and mortgage industries while also earning a profit.

As with any new card, Mesa may tweak its rewards structure based on market response and profitability. Early adopters should be prepared for possible changes, as the initial offering might prove too generous to maintain in the long run. 

We saw this with Bilt Rewards. Bilt has tightened the program in response to the market, reducing by 90% the amount of bonus points a cardholder could earn during its popular “Rent Day” promotion each month in July, 2024. 

The takeaway

The Mesa Homeowners Card brings an innovative approach to the credit card market, addressing a significant pain point for homeowners by rewarding mortgage payments. However, its overall value proposition is heavily dependent on factors that are still unclear, particularly its transfer partners and redemption values.

For homeowners who can maximize the category bonuses and fully utilize the card’s benefits, the Mesa card could provide substantial value. However, for many, the simplicity and guaranteed return of a 2% cash back card may still be more attractive, especially considering the potential opportunity cost.

As Mesa continues to refine its offering and reveal more details about its rewards program, it’s worth keeping an eye on this card. It represents an interesting shift towards more niche, lifestyle-focused credit cards that could prompt innovation across the industry.