topic Re: Rent With CC (Whats the best deal I can get?) in Credit Cards

Rent With CC (Whats the best deal I can get?)

Kree — Fri, 10 Nov 2017 14:00:56 GMT

Just found out my rent payment service accepts credit cards. They charge 2.95% as a processing fee. I currently get 2% back with discover, so .95% doesn't seem too bad.

I'm thinking of paying a month or two with CCs to help rebuild my savings. I used it for some financial tomfoolery (100 points in 4 months), but as I'm about to enter the garden for atleast a year, I think having the financial security of increased savings is worth paying a bit of interest and and taking a few dings on my credit score.

Then I thought, "I wonder if I can get more than 2.95% back." Any thoughts, on card options? I was planning to apply for a Chase Disney card because of an upcoming honeymoon at Disney World, and even if I don't get cash back, the points would be great, but I do have room in my inquiries for 1 more card, and a rent card could be swell going forward.

Re: Rent With CC (Whats the best deal I can get?)

Anonymous — Fri, 10 Nov 2017 14:11:00 GMT

Discover IT Miles is 3% cashback the first year but half of it comes back to you AFTER the first year (cash back match).

Alliant 3% card is 3% the first year but after that it's 2.5% and the second year they charge an annual fee.

I'm not sure of any other 3% cards that will work for paying rent as I have no idea how the payment process codes ("MCC") the transaction.

Re: Rent With CC (Whats the best deal I can get?)

Anonymous — Fri, 10 Nov 2017 14:13:43 GMT

I did something similar in using a credit card to jump start my savings.

I pulled a no fee cash advance off of my NFCU CC, then balance transferred it to Pen Fed @ 0% for 12 months for a 3% fee. I am making payments every 2 weeks on payday to have this paid off before the 0% ends.

Yes, I paid a few hundred bucks for it, but $$ in the bank gives me a feeling of security that is well worth it. I'm not at a creditor's mercy in an emergency should they reduce my credit limits or cancel my cards. Cash in my bank account can be used for anything I might need it for.

Re: Rent With CC (Whats the best deal I can get?)

Kree — Fri, 10 Nov 2017 14:32:06 GMT

@Anonymous wrote:
I did something similar in using a credit card to jump start my savings.

@I pulled a no fee cash advance off of my NFCU CC, then balance transferred it to Pen Fed @ 0% for 12 months for a 3% fee. I am making payments every 2 weeks on payday to have this paid off before the 0% ends.

Yes, I paid a few hundred bucks for it, but $$ in the bank gives me a feeling of security that is well worth it. I'm not at a creditor's mercy in an emergency should they reduce my credit limits or cancel my cards. Cash in my bank account can be used for anything I might need it for.

I think you mentioning it in another thread is the reason I thought of this. I'm in the middle of building a house of cards, so I haven't mentioned all of the details of my financial voyage, but in another month I will be sharing the greatest story of risk and adventure. (and hopefully success)

Re: Rent With CC (Whats the best deal I can get?)

Ardecko — Fri, 10 Nov 2017 14:47:06 GMT

@Kree wrote:
Just found out my rent payment service accepts credit cards. They charge 2.95% as a processing fee. I currently get 2% back with discover, so .95% doesn't seem too bad.

I'm thinking of paying a month or two with CCs to help rebuild my savings. I used it for some financial tomfoolery (100 points in 4 months), but as I'm about to enter the garden for atleast a year, I think having the financial security of increased savings is worth paying a bit of interest and and taking a few dings on my credit score.

I can't figure out how this is a good idea at all... Do you have 0% interest on your Discover?

Re: Rent With CC (Whats the best deal I can get?)

Anonymous — Fri, 10 Nov 2017 15:04:43 GMT

@Ardecko wrote:
I can't figure out how this is a good idea at all... Do you have 0% interest on your Discover?

I had an active thread on why putting money in savings is more important than avoiding interest but unfortunately it was against the forum rules so I can't link to it.

But my view and opinion (which has helped hundreds of folks on Facebook just this year save money for the first time in their lives) is that if you don't have saving, it is better to save money now even if it means a few hundred dollars extra in interest. It's the act of starting to save that helps you reduce financial anxiety forever -- and if it costs you a little bit the first year, so be it. Once you get to $2500 in savings, you will realize what you've been missing.

I support the idea of paying rent over 12 months even if it means one will pay $200 more in interest if it helps a person start a savings account of $1000 and then building it over over time so that in a year they have $2500 in there if possible.

Re: Rent With CC (Whats the best deal I can get?)

Kree — Fri, 10 Nov 2017 15:08:04 GMT

@Ardecko wrote:
@Kree wrote:
Just found out my rent payment service accepts credit cards. They charge 2.95% as a processing fee. I currently get 2% back with discover, so .95% doesn't seem too bad.

I'm thinking of paying a month or two with CCs to help rebuild my savings. I used it for some financial tomfoolery (100 points in 4 months), but as I'm about to enter the garden for atleast a year, I think having the financial security of increased savings is worth paying a bit of interest and and taking a few dings on my credit score.

I can't figure out how this is a good idea at all... Do you have 0% interest on your Discover?

I am, as they say, crazy like a fox. My 5 year plan is so convoluted George R.R. Martin could have written it.

Re: Rent With CC (Whats the best deal I can get?)

Anonymous — Fri, 10 Nov 2017 22:22:26 GMT

I think this is the first time that I've heard of someone wanting to save money by spending more money as opposed to just saving money without spending more money. But hey, taking two steps forward to go three steps back is just how some people roll.

Re: Rent With CC (Whats the best deal I can get?)

Anonymous — Fri, 10 Nov 2017 22:51:24 GMT

@Anonymous wrote:
I think this is the first time that I've heard of someone wanting to save money by spending more money as opposed to just saving money without spending more money. But hey, taking two steps forward to go three steps back is just how some people roll.

I've been pushing that line for 10+ years and I have been at maximum Facebook friends for 7 years, with somewhere between 1000 and 2000 requests pending that I can't accept. Why? Because literally 100s of people every year come to me for financial advice and the #1 advice I have for everyone is to build savings faster than paying down debt. I haven't changed my tune about it because no one can prove me wrong until they've tried it themselves.

The #1 issue with financial stress is that people have anxiety and even depression not just about their current situation but about the ghost of what might happen tomorrow if they lose their job, or their spouse divorces them, or they end up in the hospital. That anxiety/depression about the future is 10000% worse than the anxiety about the current.

When a person hits 6 months of savings -- no matter how much extra interest it cost them getting there -- almost 90% of them tell me their anxiety completely disappears even if they didn't put a dent in $100,000 of student loans or $60,000 on credit card debt. The flip side is, close to 0% of folks who decided to throw every dollar at debt ends up paying down $100,000 in loans to $90,000 or $60,000 in credit cards to $50,000 and have $0 in savings and their anxiety and depression gets worse because they worked so hard with negligible effect.

6 months of emergency savings makes you realize that no matter what happens, you have 6 months to pay all your bills and debts in case of income emergency. In my research, and I've interviewed thousands of people over the recent years, more than 6/7 people in credit hell or financial purgatory got there because of an income event that lasted less than 6 months. So had they put 6 months away for emergencies, they never would have gotten into the problem they face today.

Most people who follow my 6 month advice like it so much they aim for a year -- even if it costs them $1200 more in interest. Why? Because when you have a year in savings, you can give the finger to your boss, your cheating significant other, or anyone who bothers you. It's F.U. money. It's freedom.

People who are ignorant of human emotions and hormones will go based only on the math, not realizing they're totally unwilling to look at reality.

Me? I retired young thanks to saving more than paying down debt. I blew my FICO scores at one point because I had my emergency fund locked up in investments I couldn't liquidate, so I took the FICO ding just so my investments could grow. I can fix my credit in 7 years at any point, but 7 years of compound interest is MASSIVE. Note that at the time my FICO got smash (2012 or so) I had quite a bit riding in Bitcoin at around $6 each. So I made the right call -- take a massive FICO smash for what was a really risky bet, but it paid of massively and accelerated my retirement by 5 years.

Re: Rent With CC (Whats the best deal I can get?)

Anonymous — Sat, 11 Nov 2017 01:03:20 GMT

Just to observe: the number of people asking for advice says very little about the quality or the appropriateness of the advice, even with apparently satisfied customers. Maybe if they had done something else they would have been even better off.

I do understand that having an emergency fund has real as well as psychological benefits. But if it is based on money that is owed, with interest, to my mind it's not that robust.

But whatever....

Re: Rent With CC (Whats the best deal I can get?)

Anonymous — Sat, 11 Nov 2017 01:29:02 GMT

@Anonymous wrote:
@Anonymous wrote:
I think this is the first time that I've heard of someone wanting to save money by spending more money as opposed to just saving money without spending more money. But hey, taking two steps forward to go three steps back is just how some people roll.
I've been pushing that line for 10+ years and I have been at maximum Facebook friends for 7 years, with somewhere between 1000 and 2000 requests pending that I can't accept. Why? Because literally 100s of people every year come to me for financial advice and the #1 advice I have for everyone is to build savings faster than paying down debt. I haven't changed my tune about it because no one can prove me wrong until they've tried it themselves.

The #1 issue with financial stress is that people have anxiety and even depression not just about their current situation but about the ghost of what might happen tomorrow if they lose their job, or their spouse divorces them, or they end up in the hospital. That anxiety/depression about the future is 10000% worse than the anxiety about the current.

When a person hits 6 months of savings -- no matter how much extra interest it cost them getting there -- almost 90% of them tell me their anxiety completely disappears even if they didn't put a dent in $100,000 of student loans or $60,000 on credit card debt. The flip side is, close to 0% of folks who decided to throw every dollar at debt ends up paying down $100,000 in loans to $90,000 or $60,000 in credit cards to $50,000 and have $0 in savings and their anxiety and depression gets worse because they worked so hard with negligible effect.

6 months of emergency savings makes you realize that no matter what happens, you have 6 months to pay all your bills and debts in case of income emergency. In my research, and I've interviewed thousands of people over the recent years, more than 6/7 people in credit hell or financial purgatory got there because of an income event that lasted less than 6 months. So had they put 6 months away for emergencies, they never would have gotten into the problem they face today.

Most people who follow my 6 month advice like it so much they aim for a year -- even if it costs them $1200 more in interest. Why? Because when you have a year in savings, you can give the finger to your boss, your cheating significant other, or anyone who bothers you. It's F.U. money. It's freedom.

People who are ignorant of human emotions and hormones will go based only on the math, not realizing they're totally unwilling to look at reality.

Me? I retired young thanks to saving more than paying down debt. I blew my FICO scores at one point because I had my emergency fund locked up in investments I couldn't liquidate, so I took the FICO ding just so my investments could grow. I can fix my credit in 7 years at any point, but 7 years of compound interest is MASSIVE. Note that at the time my FICO got smash (2012 or so) I had quite a bit riding in Bitcoin at around $6 each. So I made the right call -- take a massive FICO smash for what was a really risky bet, but it paid of massively and accelerated my retirement by 5 years.

I'm not saying that there's no psychological benefit or that people don't feel better, I'm simply saying that it doesn't make fiscal sense to pay extra money (credit card interest) to do what is basically an attempted shortcut at having financial discipline. It literally only does the exact same thing as saving, but at a higher ultimate cost for the same end result. It works great for short term manufactured spend and for 'good feelings', but now that Americans collectively carry over $1T in credit card debt I find it hard to recommend more debt as the 'solution' for having savings. Ymmv.

Re: Rent With CC (Whats the best deal I can get?)

Anonymous — Sat, 11 Nov 2017 01:55:16 GMT

Is there no where that you are able to cut expenses? Eat out one meal less a week? Skip a night out? Turn the heat down a couple degrees and wear a sweater?

Imo if you are not able to get ahead now, unless you have major lifestyle changes near term you won't get caught up when it is time to pay off that rent sitting on the cards racking up interest.

Re: Rent With CC (Whats the best deal I can get?)

Anonymous — Sat, 11 Nov 2017 02:39:34 GMT

@Anonymous wrote:
Is there no where that you are able to cut expenses? Eat out one meal less a week? Skip a night out? Turn the heat down a couple degrees and wear a sweater?

Imo if you are not able to get ahead now, unless you have major lifestyle changes near term you won't get caught up when it is time to pay off that rent sitting on the cards racking up interest.

That is the key right there.

Re: Rent With CC (Whats the best deal I can get?)

JSS3 — Sat, 11 Nov 2017 07:35:10 GMT

I don't know of non-category 3% cards. Can't you pay rent through Plastiq which has a lower fee? 2.5%. on a 2% card.

Re: Rent With CC (Whats the best deal I can get?)

UpperNwGuy — Sat, 11 Nov 2017 12:37:10 GMT

Better to have zero savings and zero debt than to have $10,000 of each. You will never convince me that the psychological benefits of having savings outweigh the negative consequences of having debt. I recommend paying the rent from a checking account, not a credit card.

Re: Rent With CC (Whats the best deal I can get?)

Noctilum — Sat, 11 Nov 2017 13:48:38 GMT

The psychological affects are real, they affect me. What ABCD is saying is intriguing to me but I chose to take a different route which is I am currently living in my car. My monthly expenses dropped from $2300 to $600 and I am sure I am able to shave a little more off if I wanted. But the point is, the psychological aspect of it is real, at least for me and for many. Obviously some are stronger than others in that department and some just don’t care.

I’ve been able to save $6000 the last two months living in my car. I have luckily not been in debt but had very little savings for in case something catastrophic happened. Because I myself do have financial anxiety I probably would have considered his method because a few hundred in interest is a small price to pay for peace of mind. My mind is at peace for the first time in a long time though.

Re: Rent With CC (Whats the best deal I can get?)

SBR249 — Sat, 11 Nov 2017 23:06:17 GMT

The only thing I can think of that gives >3% CB on non-category spending is when my old Citi Diamond Preferred card got flat 5% CB offers for 3 months every so often. I don't know how often it happens or if they give them out to everyone but last year like clockwork they sent me such an offer every 3 months for about 3 quarters. They had put my card on the higher tier of their "Easy Deals" program but idk if that's what made the difference. Unfortunately I was out of the country most of last year so couldn't take advantage of the offers with that card's 3% FTF but those offers were very generous. I've recently PCed that card to Double Cash so don't have those offers anymore.

Re: Rent With CC (Whats the best deal I can get?)

Anonymous — Sat, 11 Nov 2017 23:16:55 GMT

@SBR249 wrote:
The only thing I can think of that gives >3% CB on non-category spending is when my old Citi Diamond Preferred card got flat 5% CB offers for 3 months every so often. I don't know how often it happens or if they give them out to everyone but last year like clockwork they sent me such an offer every 3 months for about 3 quarters. They had put my card on the higher tier of their "Easy Deals" program but idk if that's what made the difference. Unfortunately I was out of the country most of last year so couldn't take advantage of the offers with that card's 3% FTF but those offers were very generous. I've recently PCed that card to Double Cash so don't have those offers anymore.

Was there a cap on that, a lot of Citi enhanced offers max out at about $25 extra.

Re: Rent With CC (Whats the best deal I can get?)

K-in-Boston — Sat, 11 Nov 2017 23:33:25 GMT

If you were to do this, I would do it when Plastiq or a similar service has a promotional offer and preferably on a card in a 0% intro period.

I also can't wrap my head around the concept of savings vs. paying off debt. With the example of saving up 6 months of bill paying, I'd be looking at six figures. So my choices would be a.) be completely out of debt in about 3-4 years, or b.) maintain a ridiculous amount of debt and pay balance transfer fees constantly for the next 5 or 6 years, then be out of debt in a decade. That would be getting a little too close to retirement time for me, and I don't see how it would make any financial sense at all in my case as if I were out of debt in 4 years I could have saved that same amount of money by about year 7 rather than year 10, and by year 10 would have saved nearly double the initial "half year of bills" saving amount. Maybe it's just one of those things that may be good for some people, but certainly not a one-size-fits-all approach.

Re: Rent With CC (Whats the best deal I can get?)

Kree — Sun, 12 Nov 2017 13:14:44 GMT

@Anonymous wrote:
Is there no where that you are able to cut expenses? Eat out one meal less a week? Skip a night out? Turn the heat down a couple degrees and wear a sweater?

Imo if you are not able to get ahead now, unless you have major lifestyle changes near term you won't get caught up when it is time to pay off that rent sitting on the cards racking up interest.

This response is always hilarious to me. The assumption that cutting spending is the way to leave poverty. Eat out one meal less a week? So negative times most weeks. Skip a night out? I haven't had a night out (unless someone is treating) in years. Heck I don't even eat breakfast or lunch anymore.

Telling people to stop drinking starbucks doesn't mean much when they don't drink starbucks in the first place.

The debt is meaniningless. It will be gone in a few years, but an illness, being made redundant, a fire. These are real threats to my financial stability. The only reason I have debt in the first place is an unexpected pregnancy, and a fiance who lost her job over it. Watching non-sufficient saving dwindle away is not a fun experience. I do not much care to experience it again. But my primary goal in life is keeping a head over the roof of my child, and food on her plate. And ensuring, that no matter what happens, I can continue doing so.

Editorial note: Rereading this post in the morning makes me feel like I wrote a bit heated and defensive. I appologize for the tone of the first paragraph, but will not edit it directly as I feel the sentiment is correct. Suggesting poverty mode is good financial advice, but unsoliscited it can come off as rude.