nick
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Post by nick on Jan 1, 2017 16:27:24 GMT
I think most credit card companies would treat these sorts of payments as Cash advances and charge interest from the payment date. Check their small print and their interest calculations. You are right, these payments are treated as cash advances by the credit card companies. In the past I have accidentally used both VISA and Mastercard credit cards to make payments (instead of my debit card) and have been charged cash withdrawal interest rates from the date of the transactions.
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Post by sannytwist on Jan 1, 2017 16:32:11 GMT
Here's my plan, I have a credit card with 2 years of 0% on new purchases, what platforms allow me to fund my account using a credit card? I will invest my limit in a peer to peer paying it off so the balance is cleared in 2 years, I usually do it on my mortgage but this time I am going to do it in p2p providing I find a suitable platform. Thanks Its incredibly risky to invest in p2p using cc. What if platform goes bust? there is no guarantee despite their safeguards how safe our money is in these events. Yes you are investing with other people's money but also walking a tightrope at the same time.
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Post by wickedxuk on Jan 1, 2017 16:57:11 GMT
Here's my plan, I have a credit card with 2 years of 0% on new purchases, what platforms allow me to fund my account using a credit card? I will invest my limit in a peer to peer paying it off so the balance is cleared in 2 years, I usually do it on my mortgage but this time I am going to do it in p2p providing I find a suitable platform. Thanks Its incredibly risky to invest in p2p using cc. What if platform goes bust? there is no guarantee despite their safeguards how safe our money is in these events. Yes you are investing with other people's money but also walking a tightrope at the same time. Is it borrowing other people's money? Or is it borrowing from a future self...🤔
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Post by sannytwist on Jan 1, 2017 17:14:07 GMT
100% agreed.
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james
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Post by james on Jan 2, 2017 5:35:53 GMT
Its incredibly risky to invest in p2p using cc. What if platform goes bust? there is no guarantee despite their safeguards how safe our money is in these events. ... Yes you are investing with other people's money but also walking a tightrope at the same time. It isn't incredibly risky, it's just leveraged investing so higher risk than the same investment without the borrowing to fund it. There's no tightrope involved in the 50+k I have on cards and invested. I'd simply sell some investments or use income to repay, without difficulty. The amount borrowed isn't enough to cause me difficulties, courtesy of having had a savings ratio* above 60% for the last decade. It isn't very likely that more than one of the several platforms a sensible person would use would fail and spreading the money so that loss after platform fraud or failure would be acceptable is already part of sensible P2P investing. Borrowing to invest may well be above your own risk tolerance for the amounts that you were thinking of in relation to your own income and assets. If so either reduce the amounts or don't do it yourself. Meanwhile others in a different situation can do it sensibly with entirely reasonable risk levels in their own context. Someone borrowing say 10% of invested money and well under a year's income would be in a very different risk situation from borrowing many times other invested money and many years of income. *savings ratio is the percentage of income saved
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Post by sannytwist on Jan 2, 2017 5:54:52 GMT
in that case it your specific situation isn't as risky but l wouldn't think the average person who uses a cc to stooze the few % of interest would be anywhere near your situation.
It all depends on individual circumstances l suppose but if l had alot of money and savings ratio of 60%, is there a need to use cc to invest? probably not.
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stub8535
Member of DD Central
personal opinions only. Not qualified to advise on investment products.
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Post by stub8535 on Jan 2, 2017 11:00:50 GMT
I wonder if the cc guarantee scheme would cover losses on investments over £100?
In case anyone wondered, that is meant as a joke and not financial advice!
Hey everyone.
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Post by khampson on Jan 2, 2017 19:01:01 GMT
I don't think it's too risky, my credit limit is £4200 on my 0% card and my savings cover 75% of that and still growing. At the end of the term I could just cash out, only danger is platform failure and then there are still contacts in place to recover money, if not we would all borrow via p2p hoping for platform failure then thinking we would not need to pay money back.
I am going to ring Santander in the morning to see what the payment to FC was classed as, from the November payment I never was charged anything for using this payment type
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james
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Post by james on Jan 2, 2017 22:54:23 GMT
if l had alot of money and savings ratio of 60%, is there a need to use cc to invest? probably not. Not need but still benefit. Without getting the maths strictly correct, 10% borrowed and invested to make 10% adds 1% to effective returns on the 100%. That compounded cuts the time it takes to double your money. 7.3 years at 10% vs 6.7 years at 11%. Or 5.7 years if you can manage 13%. Though of course income tax has an effect as well.
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littonowl
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Post by littonowl on Jan 9, 2017 10:52:53 GMT
I don't think it's too risky, my credit limit is £4200 on my 0% card and my savings cover 75% of that and still growing. At the end of the term I could just cash out, only danger is platform failure and then there are still contacts in place to recover money, if not we would all borrow via p2p hoping for platform failure then thinking we would not need to pay money back. I am going to ring Santander in the morning to see what the payment to FC was classed as, from the November payment I never was charged anything for using this payment type - would be interested in hearing what Santander said, as I had been thinking along similar lines for some time. I presume as it was a week ago since your post, the answer wasn't positive..?
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nick
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Post by nick on Jan 11, 2017 15:09:11 GMT
About 2 years ago I mistakenly used my Santander 123 credit card (Mastercard) instead of my debit card to fund a deposit on FC and was smacked with a cash transaction fee and interest accruing from the transaction date. It eventually cost me about 5% of the deposit - an expensive mistake that I've been careful never to repeat!
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littonowl
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Post by littonowl on Jan 11, 2017 16:50:52 GMT
About 2 years ago I mistakenly used my Santander 123 credit card (Mastercard) instead of my debit card to fund a deposit on FC and was smacked with a cash transaction fee and interest accruing from the transaction date. It eventually cost me about 5% of the deposit - an expensive mistake that I've been careful never to repeat! Ouch! Thanks for sharing though, Nick, looks a no-goer then...
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vmail
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Post by vmail on Jan 11, 2017 22:46:45 GMT
I do this with my Halifax Clarity Reward card when taking out Euros out at an ATM. The night before I pay my card off (purchases and pending transaction) including the amount that will be withdrawn at the ATM the following day.
The next day my card is in credit and then the equivalent amount of Euros is withdrawn at the ATM. I think at this stage the card has a small credit balance.
The cash advance fee or interest has never been charged for many years.
Maybe the same step can be done with other cards?
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stevio
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Post by stevio on Jan 12, 2017 8:16:08 GMT
I do this with my Halifax Clarity Reward card when taking out Euros out at an ATM. The night before I pay my card off (purchases and pending transaction) including the amount that will be withdrawn at the ATM the following day. The next day my card is in credit and then the equivalent amount of Euros is withdrawn at the ATM. I think at this stage the card has a small credit balance. The cash advance fee or interest has never been charged for many years. Maybe the same step can be done with other cards? Nice plan, but there is the risk cash advances are shown on your credit file. Some CC companies can see cash advances as someone in trouble financially, as normally, due to the high costs, its normally the highest cost of borrowing and can be seen as someones last resort. They may not look into it in depth to see you were in credit at the time and may only see the cash advance flagged up, particularly if you change CC companies, they may not see all the history and just certain factors. Just saying, consider your credit file when doing this.
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vmail
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Post by vmail on Jan 12, 2017 9:21:24 GMT
I haven't seen anything on my credit file except when I asked for a temporary credit increase.
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