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Super Contributor
Posts: 7,132
Registered: ‎02-27-2013
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Re: Investing with credit cards


DontEatMyFriends wrote:

Unless you have a guaranteed rate of return on your investment which is greater than the interest you'll be charged, IMO it's not a sound idea.  Especially since you'll be using a considerable amount of your available credit for the purchase.  Investment and CC's just don't mix in my world.  Investments are not guaranteed to net more than your total purchase cost, and they also require time to mature (which adds more volatility).  Even If you break even with the initial cost of 4k, you're still losing the money spent on interest payment for the 2k borrowed.  A financial loss however small, is still a loss.  Just my opinion of course, do with it what you will.


+1

Nice post 

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Re: Investing with credit cards

Valued Contributor
Posts: 1,084
Registered: ‎02-06-2013
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Re: Investing with credit cards

     It is a rare gold coin i have an opportunity to buy. It is not something i need. It is something that I believe i can sell for a higher price than i am paying for it. I know that I can at least sell it for the price it is being offered to me and its value just in gold (melt value) is very significant. I was not asking for opinions on my investment rather on how to finance it. Thanks.

 

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Valued Contributor
Posts: 1,084
Registered: ‎02-06-2013
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Re: Investing with credit cards

    Things that have a high potential for reward are generally risking. Something that had a guaranteed rate of return kinda sounds too good to be true and I generally am skeptical of things that sound too good to be true. It is my believe that the person offering this to me is unaware of its true value.......

259/21001600/16002400/25002000/2000,2013 Scores (Initially none cause I had no credit at all then TU:519 Recent scores:FICO EX 632,EQ 635,TU 659....Link to my Rebuild Log
Super Contributor
Posts: 7,132
Registered: ‎02-27-2013
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Re: Investing with credit cards

[ Edited ]

dddewdrop wrote:

     It is a rare gold coin i have an opportunity to buy. It is not something i need. It is something that I believe i can sell for a higher price than i am paying for it. I know that I can at least sell it for the price it is being offered to me and its value just in gold (melt value) is very significant. I was not asking for opinions on my investment rather on how to finance it. Thanks.

 


You have to weigh the pros and cons yourself. There's really no right or wrong answer

Is it worth opening a new account / line of credit for this coin? Or is it worth maxing out your cards and paying interest fees for it?

If you think it's worth it, and you really want it, go for it by all means.

 

To add: There are safe investments that provide guaranteed returns (i.e. CDO, treasury bonds, etc). However, they usually tend to be lower in returns, because your risk exposure itself is low. And just curious though, do you trust this seller? Are you sure he might not be scamming you as well?

 

  

 

JPMorgan Palladium (100k), AmEx Platinum (NPSL), AmEx SPG (46k), AmEx BCP (42k), Chase Sapphire Preferred (47k), Citi Prestige (31k), Citi Thank You Preferred (27k), Citi Executive AAdvantage (25k), JPMorgan Ritz-Carlton (21k), Merrill+ (15k), US Bank Cash+ (22.5k), Wells Fargo (12k), Bloomingdale’s (12.4k), Chase Freedom (5k), Discover IT (5k).
Contributor
Posts: 366
Registered: ‎02-25-2013
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Re: Investing with credit cards

just my 2 cents.. gold is going down! beware.

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Senior Contributor
Posts: 30,824
Registered: ‎02-07-2013
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Re: Investing with credit cards


dddewdrop wrote:

     It is a rare gold coin i have an opportunity to buy. It is not something i need. It is something that I believe i can sell for a higher price than i am paying for it. I know that I can at least sell it for the price it is being offered to me and its value just in gold (melt value) is very significant. I was not asking for opinions on my investment rather on how to finance it. Thanks.

 


FYI and you know I tell it straight 

If you can sell it for what you paid minus the interest you paid to obtain it you lost.

Gold tends to skyrocket during times of heavy inflation that being said its also volatile 

To risky at this moment if finanacing with credit cards but just IMHO

Before you app think...
Have you done your research of the CC?
Does it fit your spending?
Do you have a plan for the bonus w/o going into debt?
Can you afford the AF?
Do you know the cards benefits? Is it worth the HP?
Super Contributor
Posts: 13,695
Registered: ‎04-22-2013
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Re: Investing with credit cards


dddewdrop wrote:

     It is a rare gold coin i have an opportunity to buy. It is not something i need. It is something that I believe i can sell for a higher price than i am paying for it. I know that I can at least sell it for the price it is being offered to me and its value just in gold (melt value) is very significant. I was not asking for opinions on my investment rather on how to finance it. Thanks.

 


If you are

 

1) very sure that you will have all the money in two or three months

2) think there is a real risk that you don't have that long before the seller finds someone else

3) sure that it is a good investment

 

then put the $2K on your lowest APR card(s) that can support the charge.

 

The interest charge isn't that huge, (25% APR on $2K for 3 months is ~ $125) so if you think the investment is profitable enough, fine.  If you think there is time to app for a better card, fine, but again the maximum savings on a 0% card is that $125, and if you might lose it while waiting, not worth it.

 

I am not an advocate of paying interest, but this might be a case where it is worth doing.

 

All with the caveat that you are not being scammed, or are wrong about the resale value of the coin.

Established Contributor
Posts: 751
Registered: ‎06-06-2012
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Re: Investing with credit cards

As someone who does alot of investing, it is always about your risk/reward. If I saw a great investment and I was 2 months away from having the money and it may not be there in 2 months, then I would borrow the money if the interest was low enough compared to my estimated return. Having said that, I have 6 figures in LOC with my broker that I never touch because the 7%ish margin rate makes it too risky.

 

I don't want to tell you what to do with your own investment money, but from what little you posted about the gold coin it sounds like a sketchy investment. Be very careful about collectibles and gold. Gold is very volatile right now and imo more likely to go way down than way up. As far as collectibles, it is a great steal when the owner is not in touch with the real value and otherwise either speculative or scammy. Be careful. Some of the greatest fortunes have been made speculating (especially if you are young and have years of earning ahead of you) and some of the greatest lessons have been learned from being scammed.

 

 

 

 

 

 

 

 

 

 

+1 to gold being on downside

 

 

 

Established Member
Posts: 20
Registered: ‎03-22-2010
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Re: Investing with credit cards

I am a numismatist as well, and I hate to see coins sold to smelters.  I just purchased a 1916D AU58 PCGS graded Mercury dime.  According to the Redbook their are only a few thousand known in that condition, the melt value is 2 dollars yet the numismatic value is about 8000).  The higher the price of the coin, the more it is desired and the harder it is to flip as a seller.  Back to the topic at hand though.  I prefer to fund investments via cash or short term loan (perhaps a 401k loan as those rates are usually 4%-7% vs credit cards).  If you are dead set on funding with a credit card, your best bet is to get a card with enough funds which also offers a no-fee 0% balance transfer for 12-18 months.  You need to watch out for the balance transfer fees as they can be quite hefty depending on the amount transferred (usually a percentage with a minimum amount)



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