patrick.net

Perhaps a couple of you could get off your polarized political high horses and talk about something else for a bit. Thanks.

Hmm, well I held out until I got a $0 transaction fee for 12 months/0% interest. I took out $3000 as an inflation put.

Jeremy,

Do you want to take that money for a spin? Can you afford to lose that $4k without losing sleep? :)

Buy 100 shares of NLY. It pays 12% dividend. Buy 300 shares of ARR. It pays 15% dividend. You make an average 11% on the spread with OPM. Not a recommendation. Buy at your own risk.

Good luck. :)

E-man says

Jeremy,

Do you want to take that money for a spin? Can you afford to lose that $4k without losing sleep? :)

Buy 100 shares of NLY. It pays 12% dividend. Buy 300 shares of ARR. It pays 15% dividend. You make an average 11% on the spread with OPM. Not a recommendation. Buy at your own risk.

Good luck. :)

Well, I can afford to lose it, but would rather not. I don't want to gamble to the extreme (I'm not going to take it to a roulette table and bet it all on red, for instance) but I figure, with anything, it takes money to make money. 11% seems reasonable. I mean, it's small potatoes, but money is money. Thanks for the tip.

Take baltimore +160 @ nyy tommorrow. They win easily

You can turn their 4k into your own 6400 and give them their money back.

Kuroda is very hittable

So what happens when you are "late" for a payment and they jack your rates to 29.99% and by the way extract some fees? I've had a credit card company do this to me. I'm certain I mailed it in early and there was a dweeb at their end who deliberately let it sit on a desk until it was late. And what can you do about it? Nothing. I cancelled the card of course, but they got their pound of flesh first.

Be careful.... there is no free lunch.
If you use the card for purchases they will apply all payments to the offer part (2.99%). Your purchases will be charged a high rate.
Never trust these banks, they all belong in prison.

Vicente says

So what happens when you are "late" for a payment and they jack your rates to 29.99% and by the way extract some fees? I've had a credit card company do this to me. I'm certain I mailed it in early and there was a dweeb at their end who deliberately let it sit on a desk until it was late. And what can you do about it? Nothing. I cancelled the card of course, but they got their pound of flesh first.

That has happened to me too.

And once you are in "interest repayment mode" they keep charging you interest from the very moment you buy anything even if you pay your balance in full every month. You have to actually significantly overpay to get out of it, giving them a cash advance! Or you can pay in full and cancel the card. Then you'll get one final bill for the interest. Or maybe two -- interest on the interest...

So I'd tend to agree. It's just not worth it dealing with credit cards if you actually intend to pay them back.

OTOH, when I worked at Wells Fargo I heard about a guy (no names) who would max out his credit card cash advance and just never pay back, ever. He was expert at dealing with the bill collectors. Turns out you can sue them if they call you after you told them not to!

The most amazing part was that even though he deliberately did this, after a couple of years he'd get a bunch more credit card offers and do it all again.

Vicente says

So what happens when you are "late" for a payment and they jack your rates to 29.99% and by the way extract some fees?

It's not for the faint of heart, working these credit card offers.
Raw says

Be careful.... there is no free lunch.
If you use the card for purchases they will apply all payments to the offer part (2.99%). Your purchases will be charged a high rate

Getting nailed with tricky interest payment clauses is why you have to do your due diligence if you are going to get into this game. There is a shit ton of fine print to read through. They have a lot of games, but if you are patient, the right offer comes along and you can scam them instead of them scamming you.

I am actually making more in interest-back cash bonuses on my CC purchases than I am on my money market accounts. Welcome to Inflation 2.0

Philistine says

Getting nailed with tricky interest payment clauses is why you have to do your due diligence if you are going to get into this game. There is a shit ton of fine print to read through. They have a lot of games, but if you are patient, the right offer comes along and you can scam them instead of them scamming you.

I am actually making more in interest-back cash bonuses on my CC purchases than I am on my money market accounts. Welcome to Inflation 2.0

About 5 years ago my father got this incredible offer....
$80,000 (yes, $80,000) interest free, no transaction fees from a major bank for 4 years.
He took it, put it in a CD, and made the monthly payments like clockwork. He also made sure to put away the credit card somewhere so that he would not accidentally use it.
He is now retired, but still gets these offers. Now they carry a 3% transaction fee, so he does not bother.

Raw says

made sure to put away the credit card somewhere so that he would not accidentally use it

Yep, that's one of the tricks.
Raw says

Now they carry a 3% transaction fee, so he does not bother

Uh huh, another trap most people fall for. If you hold out, you eventually get a 0% fee/0% interest, but it's not free flowing like back in the early noughts.

I've never paid interest or a fee on a credit card in my life. I'm what the banks call a deadbeat. I pay off the balance as soon as it posts.

The only reason to use a credit card is safety on online purchases with companies you don't know and to keep a high credit score. Otherwise they are worthless.

Dan8267 says

I've never paid interest or a fee on a credit card in my life. I'm what the banks call a deadbeat. I pay off the balance as soon as it posts.

The only reason to use a credit card is safety on online purchases with companies you don't know and to keep a high credit score. Otherwise they are worthless.

Don't forget the rebates you get just for charging something you would have purchased anyway.........groceries...gas...etc.

Raw says

Dan8267 says

I've never paid interest or a fee on a credit card in my life. I'm what the banks call a deadbeat. I pay off the balance as soon as it posts.

The only reason to use a credit card is safety on online purchases with companies you don't know and to keep a high credit score. Otherwise they are worthless.

Don't forget the rebates you get just for charging something you would have purchased anyway.........groceries...gas...etc.

With the exception of rare purchases from untrusted sites or maintaining an active account, I prefer to use a debit card. The merchant doesn't get dinged nearly as much when you use a debit card compared to a credit card.

I don't like banks collecting a sales tax even if they cut me in on 1% of the purchase price. All sales taxes hurt the economy. A sales tax who's revenue goes to a big bank rather than the Treasury hurts the economy without providing any government services or investment.

Banks should not even be allowed to charge for the use of electronic money. Makes a good case for nationalizing the banking infrastructure. It's pure rent seeking.

Dan8267 says

I've never paid interest or a fee on a credit card in my life. I'm what the banks call a deadbeat. I pay off the balance as soon as it posts.

The only reason to use a credit card is safety on online purchases with companies you don't know and to keep a high credit score. Otherwise they are worthless.

I wish I could say "in my life" but it's been quite some time since I've paid any interest.

And once you are in "interest repayment mode" they keep charging you interest from the very moment you buy anything even if you pay your balance in full every month. You have to actually significantly overpay to get out of it, giving them a cash advance! Or you can pay in full and cancel the card. Then you'll get one final bill for the interest. Or maybe two -- interest on the interest...

I don't use this particular card at all. And don't plan to. I also don't mail payments. I pay everything online and haven't had any trouble with my payments posting late. I literally pay my bill 3 weeks ahead of time.
Raw says

Don't forget the rebates you get just for charging something you would have purchased anyway.........groceries...gas...etc.

I have a Rewards Visa for all my every day purchases. Pay it every month. Every year or so, I get about $100 bucks in Gas cards. Seems worth it.

Even though I loathe ticket scalpers, I was thinking I could take the cash and go buy some MLB playoff/world series tickets and flip 'em. Even if I didn't gouge people and used Ebay with like, a 30% markup, I could make a little money. No guarantees in life, and of course I could lose my ass, but it might be a fun side project.

I did this sort of thing for my private student loans when I was about 9 months from paying them off. At the time my student loan interest rate was ~8% and the offer was for ~3% for 12 months (~30% there after) and I just immediately paid off my full student loans and stopped using the card (so I didn't get charged interest on current transactions). I think it ended up saving me 3 or 4 hundred.

Jeremy,

I have a little story to share. In the summer of 2010, I borrowed $30k from two Citibank credit cards and paid the balance transfer fees. I challenged myself to grow it and buy an investment condo with this money. Lucky me, the market was moving up during this period, and I grew it to $41k by March 2012. I used this money put down on an investment condo and financed 75% of the money at 4.5%. The condo is netting me over $400/month, and it has appreciated $50k based on the recent comps sold in August & September. Here is the catch. I have to pay back this money before 12/01/2012. How am I going to come up with the money? :)

It's always fun to be able to create wealth with OPM. Good luck with your investment. ;)

Dan8267 says

I prefer to use a debit card.

A guy I worked with explained how his checking account got wiped out when someone got his debit card number. One day he looked, and his checking balance was zero!

Even though he eventually got the money back, it was still a huge problem for him because he couldn't pay any bills for a long time.

Since hearing that story, I never touch debit cards, and when my banks attempts to push one on me, I cut it up and tell them to cancel the number immediately.

The benefit of credit cards is that you get a chance to contest the charge before paying. That's actually really valuaable.

I think I'll go into debt because it's worked so well for the global economy over the last 30 years.

HEY YOU says

I think I'll go into debt because it's worked so well for the global economy over the last 30 years

Be sure to default on that debt, too. That's when you really start making fat bank. It's a great time since everybody else is doing it. Make summa that QE1-2-3 count for you.

E-man says

Jeremy,

I have a little story to share. In the summer of 2010, I borrowed $30k from two Citibank credit cards and paid the balance transfer fees. I challenged myself to grow it and buy an investment condo with this money. Lucky me, the market was moving up during this period, and I grew it to $41k by March 2012. I used this money put down on an investment condo and financed 75% of the money at 4.5%. The condo is netting me over $400/month, and it has appreciated $50k based on the recent comps sold in August & September. Here is the catch. I have to pay back this money before 12/01/2012. How am I going to come up with the money? :)

It's always fun to be able to create wealth with OPM. Good luck with your investment. ;)

Congratulations on your success.
If you don't pay it off by Dec 01, 2012 they will charge you an arm, a leg, and half the body.
1. Look out for other offers and pay it off with that.
2. Get an equity line if possible.
You lucked out, but that was a pretty risky move as you don't seem to have reserves to fall back on.

Raw,

They will only charge me an arm & a leg, but leave the body alone. It's only 18.99%. Not too bad.

I'm not worry about it. My partner will pay it off for me before the due date. ;)

E-man says

Raw,

They will only charge me an arm & a leg, but leave the body alone. It's only 18.99%. Not too bad.

I'm not worry about it. My partner will pay it off for me before the due date. ;)

Whew, I'm glad you will be paying it off.
I never trust banks......they are nothing but an offshoot of the Mafia.

Yup,

I was just trying to be funny. My partner is reading this blog so I was just having a little fun with it. Right now, we have enough cash reserve to do 2 more cash deals while we are waiting for more cash injection in December and February. Shouldn't have any issues paying off the credit cards debt.

When you're investing, staying liquid is extremely important. If you get caught out of cash during a credit crunch, you can get wiped out. We learned this from history so that we would not make this mistake. Regardless of our next 2 cash acquisitions, we still have healthy reserve to float us through the next credit crunch should it hit us tomorrow.

Sorry for the misunderstanding. ;)

Yup says

E-man,

Goodluck. I hope you have an exit plan.....

E-Man, I love hearing stories like that... and I would hope that you have an exit plan, but even if you don't. Even if you let all your properties go, and hang onto your primary residence, it wouldn't be the end of the world. Plus you'd probably make free rent for close to 18 months on all of the properties. Big pile of cash, and ruined credit for a few years. No biggie

Yup says

You have absolutely no idea WTF is going on with global debt do you?

ALL developed countries are debt financed to the hilt. Some are so burdened with debt that they will go through the worst depression ever imagined. If the US had the debt to gdp that Ireland has our total outstanding debt would be 184.5 Trillion dollars.

The coast will never be clear.........

Actually this is very good or the U.S. and its currency in my opinion. I'd rather going down giving it my best shot instead of not trying. I have bigger problems to worry about should we go into a depression and my RE and money are worthless. If history is any indication, I think I will be ok given how it the depression in 1929 played out. I hope you're well prepared for it. I'm doing the best I can to prepare for it. Apparently we see it differently and prepare for it differently.

Good luck with your approach.

Jeremy says

Yup says

E-man,

Goodluck. I hope you have an exit plan.....

E-Man, I love hearing stories like that... and I would hope that you have an exit plan, but even if you don't. Even if you let all your properties go, and hang onto your primary residence, it wouldn't be the end of the world. Plus you'd probably make free rent for close to 18 months on all of the properties. Big pile of cash, and ruined credit for a few years. No biggie

Jeremy,

Before we enter a deal, we always have 2 exit strategies. Fortunately, we haven't had the need to go to plan B. We're lucky that we find more deals than we can handle so we can be somewhat selective of what we buy although it's getting harder every month gone by.

Yup says

E-man says

If history is any indication, I think I will be ok given how it the depression in 1929 played out. I hope you're well prepared for it. I'm doing the best I can to prepare for it.

You are clueless. You know nothing about the Great Depression if you think your current strategy will be ok.

I cannot argue with that. I'm pretty clueless 99% of the time. Thanks for pointing out the obvious fact. It keeps me humble.

Yup says

You may have picked the bottom and you might make an absolute killing on RE.

May is exactly correct. To be honest with you, no one knows where the bottom is until years later. I just hope I will be on the right side of the trade.

Yup says

My grandfather was a multi-millionare in RE in Los Angeles in the 80's. He had too much leverage and when the bubble popped in the early 90's, he died a poor man......lost everything.....

Even Donald Trump almost lost his ass during the 90's RE market. It would have been cool to pick your grandpa's brain on where he went wrong with his investments. Was it too much negative leverage, neutral leverage, positive leverage, or the lack of reserve that led to his downfall? This is the reason why I love talking to older folks. You can learn so much from them, and it doesn't cost a thing.

Sorry for your loss.

Raw says

Be careful.... there is no free lunch.

Wrong.

Chase had a Freedom card a while back.

Spend $500 in first 3 months, get $200 back.

I bought a set of tires around $500, and a few months later received $200 back.... Then I closed the account.

Our fearless leader said: The benefit of credit cards is that you get a chance to contest the charge before paying. That's actually really valuaable.
That and a statutory liability limit of $50 if the card is lost or stolen. Compare that to your friends check card experience that drained his account of funds.

joshuatrio says

Chase had a Freedom card a while back.

Spend $500 in first 3 months, get $200 back.

Did the exact same thing. I also did this with Citibank and Capitol One--made a total of over $1000 bucks for spending my money through them instead of my old credit union card. Not a dime of interest or fees.

Last year I also did a $250 new checking account bonus--closed it after the fine-print-90 days were up.

But I'm getting tired of this small time grifting with CC bonuses. The next stop is OPM and strategic defaultery (a.k.a. Free Rent for 3 years!).

If I had a yen to speculate with Other People's Money, I'd be picking up some Apple stock real soon.

And once you are in "interest repayment mode" they keep charging you interest from the very moment you buy anything even if you pay your balance in full every month.

Yeah my wife just pointed that out to me the other day.