Hi guys,
I only recently got my first ever credit card (wahooo) and would like to use it in some smart way enjoying those free interest periods. My first thoughts were to transfer available credit into some high interest term deposit, earn some easy money on it and then transfer the funds back to credit card before interest free time expires.
However trying to establish this, it seems like there is no way i can get the avaialble credit into any other bank account. All that the credit card company offers is transfers via Bpay or Cash Advances (not viable – extensive charges here fm day 1).
So few questions here:
1. Did I buy a lemon (ie is my credit card company somehow more restrictive than others)?
2. Could I Bpay the credit to another bank account?
3. If no other option exists what about get my “normal” bank account setup so it can receive credit card payments in similar way we normaly pay in the shops? But the %$#% would I go about that?Has anyone of you had any similar ideas/plans/setup and does not mind to share?
Cheers
D
Dan, sorry to break the bad news to you – cash advances drawn from your credit card immediately accrue interest at the high credit card rate.
If you find any “high interest” term deposits that will earn you a higher rate of interest than what your credit card is charging you, let me know!
You might also want to do the sums on whether it’s all worth the trouble. Most term deposits have a minimum 30 day term, with further short terms in multiples of 30 days (ie 60, 90 etc). Even if your credit card gives you an interest free period on cash advances (once again, let me know which card so I can get one!), you’ll usually have to pay it back within 28 to 45 days. That means you can only invest in a 30 day term deposit.
Let’s assume that your credit card gives you interest free periods on cash advances. You find a 30 day term deposit of 7%. You draw down $5,000 and plonk it in the term deposit, and take it out at the end of the 30 day period to pay off the credit card. You make a grand fortune of $25 in interest. Is it really worth the effort? I’m not saying it’s not. I’m just asking you to consider the question.
Cheers
Elysium-MDIY Residential Property Settlements in WA – the book coming soon! When I can get my act together…
OK..you see its my first credit card so I am perhaps too excited about it. I always thought that doing it as a Cash Advance was not the way to go.
I called the credit card company, who suggested that money fm credit account can be directly debeted by my another financial institution but
a) the other financial institution will be the one providing the paperwork and putting the request through (make sense to me)
b) the other financial institution needs to “PUT THIS TROUGH AS A PAYMENT NOT A CASH ADVANCE” (exact wording of customer support personel).This makes me think that it should be doable. Not easy but doable.
And since (as I understand it) payments/purchases do attract those interest free periods, in theory I should have this credit money for a while interest free.
Am I all wrong?Hi dan_76,
if you got the opportunity, use your credit card to gain frequent flyer points, thats one great advantage of the credit cards these days.
Cheers,
sissis
I am also certainly planning to just do that[
]But wouldn’t mind to squeeze some extra $$ on my way to beautiful free flights.
Ta
Hi dan_76,
lol… your like me, i also love my credit card [:X]
Cheers,
sis(and still the credit card novelty with me, hasnt worn off)
Hi Dan.
I Fear that you are missing the point. You are so in love with the cleverness of the idea that you are not paying attention to the fact that even if you can make it work, you are spending a lot of time and metal energy on peanuts.It’s a mistake we make when we first start thinking about making money faster. Also, if it was worth doing, alot of other people would be doing it. Leave it alone and find something that will give you a bigger reward for your time.
Regards
teabagteddan, another forum member recently discussed how they use two credit cards to earn maximum points from both. I think card B has to be Citibank Platinum or something though.
Basically, spend up on your card A (only what you normally spend, and can afford to pay back each month – maximising interest free time). Card B then allows you to ‘transfer’ debt from Card A, earning points for every $$ brought across. This person then paid off the debt over the next few days – not all at once as Citibank might get suss – occuring a little interest, but not much. Then repeats the cycle.
this way, basically gets the points from both cards. But any transfer like from B to A is always a cash advance – the banks aren’t going to be that good to you.
Cheers
MelI spent many years living on the wrong side of the credit card line… I am never going there again.
Don’t get me wrong, credit cards can be a very useful financial tool at times but exercise extreme caution with. ie. use good financial discipline.
I think using an equity ‘line of credit’ is better if in a position to do so. And as for interest free days… well that is a marketing ploy to encourage us minions to spend more than we earn. (ocassionally we can be disciplined to use it effectively though [
] )Be careful, be very careful… please don’t make my mistakes! [
]******
…emotion clouds good judgement but is a defining element of character.teabagted:
Yes I got your point but to:
“Leave it alone and find something that will give you a bigger reward for your time.”is easier to said (written) than done at leat from my financial prospectibe I am afraid.
Either way you guys have made me think again about all this and thank you for that. I will be careful with it I promise[
]D.
Originally posted by dan_76:…
b) the other financial institution needs to “PUT THIS TROUGH AS A PAYMENT NOT A CASH ADVANCE” (exact wording of customer support personel).
…
Am I all wrong?Dan. Don’t forget the institution charing your credit card will be paying the fee, which is about 2.5% of the purchase. So they are unlikely to do this (for nothing anyway).
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Guys,
One other thing to point out, depending if you use Visa or MaterCard, give Visa the flick as its useless in many countries when travelling overseas and you are limited to how much you can withdraw out too.
Cheers,
sisThough SIS, i have found only ANZ VISA to give me qantas FF points.. i have acculmated in 1 year just by payin bills through bpay and doin my spendin on CC points enough to go Hong Kong and back..
though remember credit is credit dan, be careful with it.. cause it has this evil power that can sometimes overcome u when u see that nice motorbike jacket in store or whatever ur eyes glare on 2 []What I learnt yesterday, I know better for tommorrow – Dean
Hi Kenshin,
Either one is fine, i have both gold visa and mastercard, but for cash advances overseas, im always limited by my visa and not many places will accept it. both are fine, as long as you know were you are going and which card will be better to use, in the area or what you are going to purchase.
… but do agree, be very careful with your credit cards, some people just dont have the will power and control over their credit cards.
Cheers,
sisThanks SIS for the info, May have to change credit cards when i go overseas next. I hear though with the bank a line of credit cards look bad when u borrow money.. any1 ever had an issue with that? where the lender will turn u down cause u have 2 many credit cards.. ? provided of course u dont have anything owning on it.
What I learnt yesterday, I know better for tommorrow – Dean
Hi Kenshin,
dont worry to much about the credit cards, unless you got a bad rating from one of them, but i think and i could be wrong, but if lenders do look at your credit cards, im sure they only look at 3% of the actual debt… though i could be wrong… the other thing to is, if the lender asks why you have so many credit cards, just tell him or her that you have cut them up and you no longer have them…
but it should be all fine… [
]Cheers,
sisI could always say I like the way it looks in my wallet. lol
Thanks SisWhat I learnt yesterday, I know better for tommorrow – Dean
has anyone successfully been able to put a deposit of a house on a credit card (eg, diners or amex)? although i know many cards are able to accept the limit, i cannot think of many agents that would be happy to pay out the retention charges to the credit card provider.
would love to put a house purchase on our cards and collect all those pts
julie
Hi Alpina,
do know someone who does very close to me… but the houses have been really cheap…. i mean really really really really really cheap, but funny thing is… i know quite a few people who have bought cars on their credit cards…. and then had so many points gained that they got free trips and holidays over seas…
Cheers,
sisCredit cards affect you lending capicity.
Still in school said:
im sure they only look at 3% of the actual debtThis is wrong! They look at the total credit limit.
I does not matter if you owe $100 or $10,000 dollars on you card. If you have a credit limit of $10,000 you are assest at having a debt of $10,000
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