Keeping up with finances

vlam

There is a reason the big CC companies do this...they just hope there are lots of "smart" guys that are going to play the system. Guess who wins?

I don't work for the CC or any bank nor do I claim to be a finance guru. The reason they offer 0% is what I stated before. They want to attract folks who are in financial trouble and looking for a way to put off the inevitable. Taking a 0% loan from the CC (big bad wolf) comes with a risks. Do you think the credit card company offer 0% BT to attract the "smart" guys hoping to trick them to play the 0% BT game or they are trying to make money off of those with credit card problem to begin with?

I am sure there are published number for those who took out a 0% BT and couldn't pay off the balance at the end of the 0% term. Those numbers are probably above 60% To answer your question of who win. Of course it's the CC company because you are playing on their terms. They set the rules. Do you think the CC company going to sit around waiting for the "smart" guy to make a mistake? Once they figure out that you are playing the game, they will cancel the offer.

BTW. I am not trying to throw what you call "big numbers". The number are there to give a reference. We are not talking about any sort of investment here.

shack

I stand by my position that trying to make money with the BT/0% scenario is a fools game. If you want to "borrow" to invest...CC and savings accounts/MM is a bad way to go about it. A 2-4% rate of return after taxes is poor by anyone's standards. You could do better on Treasury instruments which are considered a risk free investments. Most of the people that attain wealth, don't do it playing with credit cards. Many more people fall victim (higher than 60%) to this sort of activity than profit. All this comes from personal experience over many years and not just something I've researched.

The best advice is to never carry credit card debt unless absolutely necessary and pay it off as soon as possible. REGARDLESS of the rate.

A great predictor of the industry comes from what the regulatory agencies (OCC, FDIC, State Bank Examiners) decide are "issues". Their "points of interest" determine how banks offer credit terms. Right now, thanks to the mortgage problems, debt service and AVAILABILTY of credit is getting a lot of attention. Look for lenders to consider all the limits one has on CC, etc, as fully funded for approval purposes. The rationale is that if it is available, it can be maxed immedialtely and shoud be considered as such and factored in the debt service calculations. The OCC especially (straight from them as we are going through our annual exam right now) wants unsecured consumer debt reigned in. Borrowing money is going to get tougher.

audiobliss

shack wrote: »

Borrowing money is going to get tougher.

That's not going to help much with upcoming college expenses.

Sami

shack wrote: »

If you want to "borrow" to invest...CC and savings accounts/MM is a bad way to go about it. A 2-4% rate of return after taxes is poor by anyone's standards.

I never understood why someone would want to take a CC offer and put it into low interest account. The small return isn't worth it IMO. I do play the 0% game though. Last offer I took was $20k 0% for a year, put it into my stock account, it's been 7 months now and I have turned a 40% profit on the money. I won't use them again since they changed their terms to the worse (no limit on BT fee), I have other banks who won't do that. Of course they also changed the rate to 22% if I fail to make a payment or I let it go beyond the introductory period, but that isn't a concern, I have enough equity to pay it off at any time I want (with my stock account being the primary source).

For the banks I have been a lousy customer in terms of making them money but they still keep throwing those 0% offers at me, and also 2.99% for the life of the balance which I have also used in the past. If you're looking to get a big loan, just make sure you don't carry any balances close to the limit at that time.

audiobliss

Well, I just got an email from Citi informing me that they can't verify my status at school. So, they want me to mail them 1) a copy of the email, 2) A student ID with a current enrollment sticker (copy both sides if necessary), and 3) A paid tuition bill for the current semester or trimester.

What the heck is a current enrollment sticker? I have a student ID and I can get a copy of the bill easy enough.

MrNightly

Shack,

Is your name, "Dave Ramsey" by chance? Keep it up. Good solid advice we could all use to live by.

Cheers!

shack

No. I have actually met Dave via some business dealings in Nashville. I agree with some of what he preaches. However, he and I disagree on some issues. He is too extreme as far as being "debt free". Things like opting out of employeer match 401Ks to pay off debt is a terrible idea. Tell me any other investment that will return 25& -100% risk free and tax deferred. If one is trying to get out of debt, it is worth the extra time it takes to stay in an employeer match 401k. His plan has it's place for those who absolutely can't manage their income. That said, some debt, the right kind of debt, has it's place. CC debt is not one of those. Leveraging has it's place in the business world as well. Ramsey got burned because he was stupid in the R/E business and got greedy. Now he is 100% the opposite and it has worked for him.

What Ramsey preaches works for those who are in dire straits...It is not necessary or prudent for everyone. I make a lot of money lending money. My philosophy is that if I make someone a loan they have no business borrowing...I am as much at fault as they are if it goes bad. It works for me and my clients.

audiobliss

anonymouse wrote: »

If your student ID clearly specifies that you are currently enrolled, I'm guessing that will work.

It doesn't. The only date is the expiration date...which was in August...guess it's a good thing I looked at it! :eek: