Investment

[McLovin]

New guy here looking for advice.....my credit card company is offering me a low interest rate loan $19,400 at 2.99% for a year, with only a $75 transaction fee. I don't need the money but I was thinking about taking the loan and putting it in an investment for a year, at the end of the year I will pay off the remaining credit card balance, with the interest I will earn I'm ahead and the credit card company is paying me.

So my question is what would be a good investment for a year, obviously need something better than 2.99% and something fairly safe. I've checked out Vanguards Money Market accounts and a few CDs but I'm looking for something a little better.

Also do you think the interest I will earn is worth having credit card debt on my credit report for a year?

 

[shotcalla10]

you should invest that money in me. I'll take it to vegas (only few hours away from where I am) and see if I can get 1000% return on it playing black jack. I'll give you half of my winnings which will be MORE than enough to pay off your credit card debt and way more than any other investment will get you. high risk high reward buddy.

 

[BigIron]

New guy here looking for advice.....my credit card company is offering me a low interest rate loan $19,400 at 2.99% for a year, with only a $75 transaction fee. I don't need the money but I was thinking about taking the loan and putting it in an investment for a year, at the end of the year I will pay off the remaining credit card balance, with the interest I will earn I'm ahead and the credit card company is paying me.

So my question is what would be a good investment for a year, obviously need something better than 2.99% and something fairly safe. I've checked out Vanguards Money Market accounts and a few CDs but I'm looking for something a little better.

Also do you think the interest I will earn is worth having credit card debt on my credit report for a year?

How much interest do you plan on earning?

 

[Schnugg]

And if you are one day late, on one payment, your interest rate climbs up to some huge number like 19%????

Read the very fine print.
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[Nose]

No!!!!!!!


Save Your Money And Pay In Cash So That You Do Not Need One!!!!!

That's a great strategy, until you go to buy a house and have low/no credit.

That being said, that deal sounds too good to be true. You sure you read all the fine print?

 

[McLovin]

No!!!!!!!

Stay The Fvck Away From Them.

Do Not Open Up A Card For The Sake Of Having A Credit Report.
Save Your Money And Pay In Cash So That You Do Not Need One!!!!!

It's not a new credit card it's one I already have. I also know that if you are late the interest rate goes up, but thats what automatic web bill pay is for or if for some odd reason I am late I have to pull the money from the investment sooner than planned and pay it off.

I have read the fine print and the deal is legit. I have used these offers in the past and it has always worked out, I just make sure I pay it off before the offer ends...never had a problem......It's just this time I want to make the credit card company work for me thats why I have to find a safe investment that will beat their rate within a year and make it worth while.

Like I said I do not need the cash, have plenty of it, only consumer debt is the car payment which should be gone pretty quick. I'm just looking for a way to make money from the credit card.........I have some ideas but I'm not sure if I want that much debt on my credit.

 

[Flying Low]

You will be starting with $75 plus intersest in the red. Plus you won't be making a lot of money on low interest deposits. Not worth it IMO.

 

[The Chief]

New guy here looking for advice.....

General advice, never borrow money to invest. Leverage is a powerful economic engine, however we are talking about debit here and not leverage.

Red Flag. You said 2.99% per year. Do you mean 2.99% APY?

So you will pay the credit card $655 for the year ($580 interest, $75 fee).

Took quick look at current 1 year maturity CDs they are about 3.8% APY. Invest in a 1 year CD at 3.8% APY will net you $737. You will owe Uncle $110 on that earned income, leaving you with $627.So you will be out $27 on the deal.

 

[cosmania]

Don't do it.

 

[McLovin]

Thanks guys for the advice.

 

[BlackBearHockey]

General advice, never borrow money to invest.

That's interesting to hear. A lot of Mids will take out that USAA pre-commissioning loan and throw it into a money market or active assets account. Not me though, I'll be paying off all my student loans with it, a cheaper consolidation I guess.

 

[FLYTPAY]

Never borrow money to invest unless you are an entrepreneur starting a company or your investment is "saddled"/guarenteed. But ifyou don't heed the advice, let it ride on one stock and one stock only.....and let that stock be MICC.