Another credit card thread

[scootergmc]

Would anyone be so confident to use credit on a 0% interest rate 0% fee transfer offer, buy equities and hold for the duration of the no interest and then pay the balance off when the regular interest rate kicks back in?

Speed things up and just go to Vegas for the weekend.

 

[TheRobSJ]

Would anyone be so confident to use credit on a 0% interest rate 0% fee transfer offer, buy equities and hold for the duration of the no interest and then pay the balance off when the regular interest rate kicks back in?

People do it all the time. 90 days, 6 months, or even a year no interest offers get put out all the time for consumer goods for store cards. Purchase over $xxx at Best Buy, all Tempur Pedic mattresses at so and so store, stuff like that. Of course the hope is that you carry a balance past the time and accrue all the back interest. And of course plenty of people get caught on that, which is again, playing the game and losing.

 

[ejv]

I assume most people know this, but it is in fact good for your credit score to utilize your credit. A little bit. Having a debt to credit ratio of 90% is of course not good. But carrying a little bit, maybe 10% here and there is a good way to to it. There are some cards with super low or zero APR for introductory periods (like the first year or 18 months). So having a card like that would be a good place to park a balance to utilize credit. The Amex Everyday Card has no annual fee, zero balance transfer fee, and no APR for the first 15 months. That’s a good one to start playing the game.

But just using a debit card to buy everything is not playing the game at all. What do you get back for that...checking account monthly fee waived?

Free checking of course. Lots of perks to my checking account but it has nothing to do with using my debit card or not. I just don't like debt. I like to know where my liquidity stands at any point in time and the more debt stashed away in more places the harder it makes it to figure out. I paid off my student loan in January. My wife still owes a bunch but she got a real degree and she makes a lot more than me so I don't mind paying on that even though we could pay it off.
The rate is pretty low and nothing like the rates of the last 10-15 years.

We don't have any other debt. Both cars are paid off. Paid cash for my bike. Though I am looking at getting a truck in the next 12-18 months and I'll be financing most if not all of that. So that would help my credit rating but I was hoping it would be over 800 when I buy the truck, not later because I buy the truck.

It's just strange that I've never been as capable of taking on new debt as I am now and yet my score has gone down since paying off old debt. I get how it works. Just not a fan of the game is all.

 

[Cycle61]

People do it all the time. 90 days, 6 months, or even a year no interest offers get put out all the time for consumer goods for store cards. Purchase over $xxx at Best Buy, all Tempur Pedic mattresses at so and so store, stuff like that. Of course the hope is that you carry a balance past the time and accrue all the back interest. And of course plenty of people get caught on that, which is again, playing the game and losing.

AnA is talking about buying stocks with it.

 

[Lights_Guy3]

I use the Chase Freedom and Sapphire Reserve combo. The $300 back on travel expenses make the Sapphire only cost $150 a year and I easily make that back in travel rewards and other perks. Transferring points from the Freedom card let's me redeem for 1.5x the normal amount using the Sapphire account.

Discover card for the revolving categories at 5% back up to 75$ per quarter.

Lastly the Amazon 5% back card since I spend about $6k there annually.

Paying interest even one time can totally offset all the gains, so everything is paid off in full each month.

 

[CABilly]

I know some people would say it wasn't a good idea, but this year I took out a 403(b) loan and paid off all my CC debt with it. Now for less than I was paying minimum payments on credit cards, I'm paying myself 6.5% interest. I have a set end date to be completely debt free, by then the house will have been paid off.

My credit score jumped about 50 points and we are just living within our means. It was fun collecting points and stuff but they never added up to more than interest. You all must be better than me because I tried keeping up but a wedding and some emergencies and my wife being out of work for a while brought us a revolving balance and it's a terrible cycle to try to break out of. Much easier to just look at the bank account, and let it tell me if I can make that purchase or not.

 

[Cycle61]

Good move getting out from under the CC debt. As long as you keep it clean from here out, you're golden.

 

[BrownDawg]

I've been using a Chase Freedom card for three months now. They promised me 3% back on everything for two years and up to $20k in purchases. I was somewhat skeptical but my first bill showed they did return $30 on $1k spent. I'm on schedule to collect the max $600. Not interested in airlines or LL Bean bucks, cash works for me. As you can see by my numbers = smalltime, but probably better than most.

Also have an Amazon Prime Chase card I use for Amazon purchases for the better deal there.

Assorted other cards that rarely get used. Mostly the Cabela's card when they offer triple points.

What rate do retailers pay? I heard it varies. 3% the max?

 

[Bowling4Bikes]

My main 3

AmEx blue. I think I get 3% back on many purchases
Amazon Visa.
Marriott Premier Visa (this one is metal btw). I get a night's stay out of it per year and discounted rooms.

Maybe once a year I'll pick up another card for the points then drop it.

 

[TheRobSJ]

AnA is talking about buying stocks with it.

Oh that. That’s some serious gambling right there.

I use the Chase Freedom and Sapphire Reserve combo.

And I did the Amex combo. In hindsight, yours is probably the better combo to have (I’d go with the Sapphire Preferred) since it’s a lower annual fee and Visa is accepted at more places than Amex. A few of the youtube credit card experts I’ve seen talk about having a “trifecta” from either Chase or Amex to give you a broader availability of maximizing points for purchases. I just can’t see myself justifying the annual fee of the CSR or Amex Platinum because I wouldn’t book nearly enough air travel or use the other credits and benefits to make it worth it.

 

[Removed 3]

I know people use credit to buy stocks. I was just wondering whether or not you guys here with $0 fee balance transfer offers buy stocks with it. Just curious.

 

[TheRobSJ]

I know people use credit to buy stocks. I was just wondering whether or not you guys here with $0 fee balance transfer offers buy stocks with it. Just curious.

If it was a sure thing, I guess it’s a decent strategy. But if it’s truly a sure thing, then it’s probably illegal. So in the end, it’s still gambling. And I’m of the mindset of if you can’t afford to lose it, you shouldn’t risk it.

 

[bpw]

I know people use credit to buy stocks. I was just wondering whether or not you guys here with $0 fee balance transfer offers buy stocks with it. Just curious.

The kind of investors who can reasonably invest on margin won’t be screwing around with the piddly amounts available from a credit card advance.

Margin investing (not unlike shorting) is best left to the pros with deep wallets and high risk tolerance.

In theory you could make few percent investing in really safe things like govt bonds, but I doubt you would be able to do enough volume to make it worthwhile.

Do any credit cards actually let you get cash at 0% anyways? I have only ever seen it for balance transfer or purchases.

 

[Removed 3]

I have never read the fine print on balance transfer checks (e.g., who/what you can write the check out to). The purpose is to pay off or pay down your higher interest rate credit card balances.

The credit cards I have charge a 3% transaction fee for balance transfers so of course I have never entertained the idea.


I have heard either margin investing or shorting, you can lose more than you shelled out. You have to know what you're doing in either case.

If you have a stock or ETF that is doing well despite the turbulence on trade talks, I am imagining you can get back more than 3% on what typical rewards cards are offering

 

[Lights_Guy3]

Oh that. That’s some serious gambling right there.




And I did the Amex combo. In hindsight, yours is probably the better combo to have (I’d go with the Sapphire Preferred) since it’s a lower annual fee and Visa is accepted at more places than Amex. A few of the youtube credit card experts I’ve seen talk about having a “trifecta” from either Chase or Amex to give you a broader availability of maximizing points for purchases. I just can’t see myself justifying the annual fee of the CSR or Amex Platinum because I wouldn’t book nearly enough air travel or use the other credits and benefits to make it worth it.

For me the $150 a year makes sense. I racked up about 180,000 points last year and we redeemed that for airline tickets and hotels. Their redemption is 1.5x for travel stuff, and their Chase website has similar prices to all the big travel sites. It was basically $2,700 of stuff for just using those cards. Plus I love all the standard travel benefits you get like no international fees, car rental insurance, elite status at rental agencies, free access to lounges and stuff. I haven't even taken advantage of the TSA pre-check reimbursement and other benefits yet. As a side bonus, whenever I have to call them, I get a native English speaker on the phone right away.

I forgot, I also use my US Bank credit card to pay my phone bill. If I do that, they give me cell phone device insurance that is full coverage and no deductible

 

[TheRobSJ]

Do any credit cards actually let you get cash at 0% anyways? I have only ever seen it for balance transfer or purchases.

I’d be surprised if there was any. What’s in it for them other than the off chance you carry a balance past the promotional period and are then on the hook for the interest? At least when they give you 0% on purchases, they’re getting ~3% from the retailer for the transaction. Not sure where the incentive is for them to buy your debt from another creditor...maybe hoping that you’ll blow past that promo period and they get to collect a shitload of interest.

 

[Lights_Guy3]

maybe hoping that you’ll blow past that promo period and they get to collect a shitload of interest.

I'm fairly sure that's what it is. I have a promo on my Chase Freedom card right now that's 0% and has been for about the last 12 months. I'm hovering at about $25,000 balance on that right now while I have my money making me money somewhere else. That still gives me a little over 10 grand of available credit on that card and when it comes time for the promo to end, I'll just pay it off in full.

 

[TheRobSJ]

For me the $150 a year makes sense. I racked up about 180,000 points last year and we redeemed that for airline tickets and hotels. Their redemption is 1.5x for travel stuff, and their Chase website has similar prices to all the big travel sites. It was basically $2,700 of stuff for just using those cards. Plus I love all the standard travel benefits you get like no international fees, car rental insurance, elite status at rental agencies, free access to lounges and stuff. I haven't even taken advantage of the TSA pre-check reimbursement and other benefits yet. As a side bonus, whenever I have to call them, I get a native English speaker on the phone right away.

I forgot, I also use my US Bank credit card to pay my phone bill. If I do that, they give me cell phone device insurance that is full coverage and no deductible

You sir are playing the credit card game well. I believe that if you put an actual cash value on points, because with Amex you can just pay the bill with points if you want, it’s something abysmal like 0.6 cents per point. Booking travel through their portal and using points is probably the most bang for your buck when paying in points.

 

[Lights_Guy3]

You sir are playing the credit card game well. I believe that if you put an actual cash value on points, because with Amex you can just pay the bill with points if you want, it’s something abysmal like 0.6 cents per point. Booking travel through their portal and using points is probably the most bang for your buck when paying in points.

It definitely is. I use the Sapphire card for all dining and travel related expenses (3x points accumulation + 1.5x redemption for 4.5% total reward), and the Freedom Unlimited for everything else (save for the 5% rotating categories from Discover). I get 1.5 points per dollar with the Freedom Unlimited and then transfer those points to the Sapphire. Then I get a 1.5x multiplier for travel rewards. That means that I am effectively getting, at minimum, 2.25% back on every dollar I spend on anything, and usually more.

 

[Cycle61]

My Sapphire Preferred is 2x points on travel. Are you sure about that 3x?