Investing off a credit card?
Friday, November 28th, 2008 at 6:56 am
Looking For Cash Day Advance Loan Reports
My credit card offers a rate of 1.99% annual interest on cash advances plus a flat rate service charge of 1% of the cash advance amount in order to borrow money from the credit card company.
(E.g. $5000 loan is subject to $50 charge + 1.99% interest)
Therefore I was thinking of taking out a cash advance from the card and throwing it into a high-yield savings account (4-5% annually) for a period of one year.
I know people say you shouldn’t invest with other people’s money, but this is a secure investment that is guaranteed to grow - not stocks. I also would not borrow more from the credit card than I am able to pay back at any time.
It seems I would in all owe the credit card people roughly 2.99% of the principal in interest, whereas I would be earning interest at a 4-5% clip.
The earnings certainly wouldn’t be vast, but considering the simplicity of the transaction I’m starting to wonder why not?
So - why not?
P.S. - no additional fees involved in opening the savings accoun
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Filed in: Cash Advance Guaranteed
November 28th, 2008 at 9:38 pm
I think you should read the fine print. Most of the time those are low introductory rates to get you hooked on the card and then after a certain period of time the rates will go up. Make sure you read everything included on the offer of credit it may suprise you.
November 30th, 2008 at 8:13 am
Yes if you like 4% per year minus costs and tax.
If you are really scared of losing money why don’t you learn more about how to make it.
I’m not trying to be rude..my last trading course cost me $3500. I’m not scared to prepare myself for some big wins in the near future.
Education will never go to waste and can make you easily 36% per year..and I learned how to do it!
December 2nd, 2008 at 9:06 pm
NO-ONE loans money for 2% a year! Either that’s a short-term “introductory offer”, a monthly rate, a charge IN ADDITION to the card’s purchase rate, or you just read it wrong!
Or it’s a scam!
December 5th, 2008 at 8:45 am
I don’t know why people are giving you so much grief. I’ve had (and have) cards like that that are guaranteed for life at certain rates.
For one year while the rate is that low, yes, the way you lay it out, it makes sense. Just be sure your gain (approx 1-2%) over that time is worth the effort.
Hope that helps!