Buying gold coins/bars with CC
Jan 17, 2011, 2:10 am
#1
Original Poster
Join Date: Nov 2009
Location: OSA
Programs: UA Gold, ANA, Spg Gold
Posts: 103
Buying gold coins/bars with CC
Anyone have any experience buying gold (coins, e-gold, bars, scrap etc.) with a mileage CC and then reselling immediately (or holding on as investment)?
What issues are there here, apart from making sure you get your gold at the going price?
For us flyertalkers who travel so much, are there good tips for buying in one place and selling in another? Anyone care to share their experiences, or introduce good sites/resources?
What issues are there here, apart from making sure you get your gold at the going price?
For us flyertalkers who travel so much, are there good tips for buying in one place and selling in another? Anyone care to share their experiences, or introduce good sites/resources?
Jan 17, 2011, 3:47 am
#2
Join Date: Nov 1999
Programs: UA, DL, AA, Sutherlands Lumber
Posts: 7,359
I've purchased some bullion with CC. My dealer then adds a surcharge of 2%. Zero net gain. I only do this when I don't have a check or cash when I visit. I buy at spot plus a couple percent. Prices are available at TheBullionDesk, Kitco is sometimes helpful.
Exploiting market differences while traveling is arbitrage and probably worthy of a new thread. Ex: taking Levis to Russia in the 80's.
Exploiting market differences while traveling is arbitrage and probably worthy of a new thread. Ex: taking Levis to Russia in the 80's.
Jan 17, 2011, 4:11 am
#3
Original Poster
Join Date: Nov 2009
Location: OSA
Programs: UA Gold, ANA, Spg Gold
Posts: 103
I've purchased some bullion with CC. My dealer then adds a surcharge of 2%. Zero net gain. I only do this when I don't have a check or cash when I visit. I buy at spot plus a couple percent. Prices are available at TheBullionDesk, Kitco is sometimes helpful.
Exploiting market differences while traveling is arbitrage and probably worthy of a new thread. Ex: taking Levis to Russia in the 80's.
Exploiting market differences while traveling is arbitrage and probably worthy of a new thread. Ex: taking Levis to Russia in the 80's.
Obviously gold is so easy to carry to different places in the world. But maybe the prices are so fixed these days that the differences are all in the currencies used to buy/sell??
Jan 17, 2011, 7:26 pm
#5
Join Date: Apr 2000
Location: Fort Myers, FL
Programs: Hilton Gold, SPG & IHG Plat, & every airline program that I can join
Posts: 2,279
I am a small time player, but I try to maximize points and miles in buying. So I do combinations of the following:
Buy Ebay gift cards at the grocery store on Amex Hilton for the 6 points per dollar. I use these for odd balances when I don't want to add another credit card or gift card to Paypal. I was blocked on my account for too many cards added and remover in too short a period.
Buy Amex Gift cards with a 1.6% rebate at BigCrumbs.com at giftcards.com The rebate is $71 net of fees on $5K of cards, I buy these on the SPG Amex for 5000 points, or Travelocity Amex for 4% back in travel = $200
Be sure to join Ebay Bucks for another 2% back on purchases, paid as a credit in the next quarter.
Go back on BigCrumbs and go to ebay, look for gold 1 oz coins or bars that are close to spot, Krugs are usually the lowest price.
If you can find something that works and you win the bid, you can add up your net with all the discounts. It does work out, biggest risk is in spot prices dropping. I did buy 4 oz last week and got about $60 off each oz. I am holding in the safe deposit for now, can sell at the local coin dealer or in 20oz chunks at tuvling.com.
Even if I just break even, I still get enough SPG points for a night at a decent hotel, $200 credit on Travelocity, and all the hilton points for the inital purchase.
Cheers!
JudyJFLA
If info helps you please use me as a referral for big crumbs!
Buy Ebay gift cards at the grocery store on Amex Hilton for the 6 points per dollar. I use these for odd balances when I don't want to add another credit card or gift card to Paypal. I was blocked on my account for too many cards added and remover in too short a period.
Buy Amex Gift cards with a 1.6% rebate at BigCrumbs.com at giftcards.com The rebate is $71 net of fees on $5K of cards, I buy these on the SPG Amex for 5000 points, or Travelocity Amex for 4% back in travel = $200
Be sure to join Ebay Bucks for another 2% back on purchases, paid as a credit in the next quarter.
Go back on BigCrumbs and go to ebay, look for gold 1 oz coins or bars that are close to spot, Krugs are usually the lowest price.
If you can find something that works and you win the bid, you can add up your net with all the discounts. It does work out, biggest risk is in spot prices dropping. I did buy 4 oz last week and got about $60 off each oz. I am holding in the safe deposit for now, can sell at the local coin dealer or in 20oz chunks at tuvling.com.
Even if I just break even, I still get enough SPG points for a night at a decent hotel, $200 credit on Travelocity, and all the hilton points for the inital purchase.
Cheers!
JudyJFLA
If info helps you please use me as a referral for big crumbs!
Last edited by JudyJFLA; Jan 17, 2011 at 7:35 pm
Jan 17, 2011, 7:45 pm
#6
Join Date: Oct 2009
Programs: UA 1K, Hilton ♦ , Hyatt Carbonado, Wyndham ♦, Marriott PE, "Stinking Bum" elsewhere.
Posts: 5,000
Buy Airline Tix in Japan
You usually can get a much better deal in person buying air travel in Japan with cash in Yen than I have ever found on any travel site or search engine. No. 1 Travel and H.I.S. travel are just a couple of places I know of. On my last purchase of a W-fare, ORD-BKK UA itinerary (in 2009), I saved about $350- off what the cheapest consolidator could do for me. I will say that in the last 1 1/2 years, with the very strong Yen, the bargains have mostly gone away, but eventually the FED will raise rates and it should be good again.
They will not let you book these fares unless you are there in person, however.
They will not let you book these fares unless you are there in person, however.
Last edited by zombietooth; Jan 17, 2011 at 8:16 pm
Jan 18, 2011, 1:19 pm
#8
Join Date: May 2008
Programs: AA PLT 2MM
Posts: 2,026
Ok...
1) No 'good dealer' will give you 'cash price' if you use a credit card. By 'good good' dealer, I mean 'good to you', as in the dealer isn't making much profit. If the margins are slim, they simply can't afford to let you use a credit card for payment. It's easy to tell if the margins are slim. Real time commodity prices are quite readily available. Obviously taking delivery in the form of an 'eagle' or 'maple leaf' or 'krugerrand' have different premiums over spot rate (generally referred to as 'fabrication charge', or 'minting fee', etc). Personally, when I'm buying, I look for the guy who's price for a well accepted gold coin/bar is as close as possible to the spot rate. I do not look at my bullion investments as an opportunity to earn miles, because as a general rule, they aren't.
2) Once and a while you can find deals where paying with credit card works out cheaper. It's not going to be the dealer who offers you that. Great examples of the past were when 'live cashback' (I say 'live' because by the time it became 'bing cashback' too many players got into the game and prices went up, also 'bing cashback' never had the wonderful 35% days that 'live cashback' had). At any rate, bing or live cashback when stacked with mrrebates/fatwallet or another portal generally netted a nice rebate. It was even better when eBay was constantly giving out 10% up to $100 coupons.
Since bing/live cashback and ebay coupons required you use paypal, then obviously paying with a credit card instead of your linked bank account was a no-brainer.
I wish I had known about the BC->GC thing at the time as JudyFLA points out. Would have further enhanced my gold/silver buying opportunity.
3) There really is NO SUCH THING as arbitrage opportunities in liquid commodity markets such as gold and silver, just merely by buying the bullion in 1 country and simply selling it in another. The arbitrage might come into affect 'if' you're greasing the palms of bureaucrats in basket case countries that have restrictions on the movement of liquid assets across boarders. Then you might have a dysfunction in the pricing mechanisms of the markets that you can take advantage of. But, no way you can go to South Africa and pay in Rand for a Kruggerand then bring that coin to the USA and sell it in dollars and expect to come out ahead for the mere fact of having taken the coin home with you. You will only come out ahead by mere accident, due to currency fluctuations. In that case you might as well have been a FX trader, and skipped the bullion all together. Gold is an extremely efficient market, globally. I think people often confuse the discount on the 'art/collector' value found in some places with a discount of the weight in gold. In other words, I'm fairly sure you can find some nice 24K Indian jewelry for a less expensive price in Bangalore vs New York City. But, you'll never find a discount for a 24K pamp swiss 1 ounce bar in Banglore vs New York City.
Sorry for the rant... I've been trading (mostly buying) gold decades, and, I find there's a whole bunch of misinformation out there, much of it promulgated by gold dealers themselves. The worst being those Lear Financial and swiss American guys who some how try to tell you that a common pre-1933 gold coin is worth more than just the same weight of modern eagle, especially when they assert that there's a multiplier effect (i.e. those a$$holes have actually said something toe the effect of 'buy our pre-1933 gold coin at $2700 and ounce despite the fact is trading at $1330 and ounce, because if gold doubles in price your regular eagle will only be worth $2660, where as your $5400, so you'll make $1370 additional profit with our inflated price coin') I guess you can tell I have a very poor opinion of many of these dealers. They are definitely out there trying to fleece the uninformed. But, there's a few guys I think are good, apmex, bulliondirect, and coloradogold to name but a few -- all have very small spreads and aren't trying to sell you a 'story' instead of the 'gold'.
Ok, I digress...bottom line, do your homework when buying gold as you would with any investment. And unless you're a dealer yourself and have your researched your business plan and have your transactions costs under control, I fail to see how in the OP's comment he can be reselling immediately again at a profit, unless of course the market moves his way. But, that's what a whole bunch of people who were 'flipping houses' were doing a few years ago. They thought they were buying a house cheap, fixing it up, and selling at a profit. When in fact they likely would have made the same money by merely buying the house, doing nothing, and later selling. It all works fine when the general market is moving one direction. As history has proven, that's the exception, not the rule.
Alright... didn't mean to hijack the thread. I only re-iterate that the gold market, like any other market has a lot of 'experts' that know their craft, and their motive is not to make you a profit, but to make themselves a profit.
1) No 'good dealer' will give you 'cash price' if you use a credit card. By 'good good' dealer, I mean 'good to you', as in the dealer isn't making much profit. If the margins are slim, they simply can't afford to let you use a credit card for payment. It's easy to tell if the margins are slim. Real time commodity prices are quite readily available. Obviously taking delivery in the form of an 'eagle' or 'maple leaf' or 'krugerrand' have different premiums over spot rate (generally referred to as 'fabrication charge', or 'minting fee', etc). Personally, when I'm buying, I look for the guy who's price for a well accepted gold coin/bar is as close as possible to the spot rate. I do not look at my bullion investments as an opportunity to earn miles, because as a general rule, they aren't.
2) Once and a while you can find deals where paying with credit card works out cheaper. It's not going to be the dealer who offers you that. Great examples of the past were when 'live cashback' (I say 'live' because by the time it became 'bing cashback' too many players got into the game and prices went up, also 'bing cashback' never had the wonderful 35% days that 'live cashback' had). At any rate, bing or live cashback when stacked with mrrebates/fatwallet or another portal generally netted a nice rebate. It was even better when eBay was constantly giving out 10% up to $100 coupons.
Since bing/live cashback and ebay coupons required you use paypal, then obviously paying with a credit card instead of your linked bank account was a no-brainer.
I wish I had known about the BC->GC thing at the time as JudyFLA points out. Would have further enhanced my gold/silver buying opportunity.
3) There really is NO SUCH THING as arbitrage opportunities in liquid commodity markets such as gold and silver, just merely by buying the bullion in 1 country and simply selling it in another. The arbitrage might come into affect 'if' you're greasing the palms of bureaucrats in basket case countries that have restrictions on the movement of liquid assets across boarders. Then you might have a dysfunction in the pricing mechanisms of the markets that you can take advantage of. But, no way you can go to South Africa and pay in Rand for a Kruggerand then bring that coin to the USA and sell it in dollars and expect to come out ahead for the mere fact of having taken the coin home with you. You will only come out ahead by mere accident, due to currency fluctuations. In that case you might as well have been a FX trader, and skipped the bullion all together. Gold is an extremely efficient market, globally. I think people often confuse the discount on the 'art/collector' value found in some places with a discount of the weight in gold. In other words, I'm fairly sure you can find some nice 24K Indian jewelry for a less expensive price in Bangalore vs New York City. But, you'll never find a discount for a 24K pamp swiss 1 ounce bar in Banglore vs New York City.
Sorry for the rant... I've been trading (mostly buying) gold decades, and, I find there's a whole bunch of misinformation out there, much of it promulgated by gold dealers themselves. The worst being those Lear Financial and swiss American guys who some how try to tell you that a common pre-1933 gold coin is worth more than just the same weight of modern eagle, especially when they assert that there's a multiplier effect (i.e. those a$$holes have actually said something toe the effect of 'buy our pre-1933 gold coin at $2700 and ounce despite the fact is trading at $1330 and ounce, because if gold doubles in price your regular eagle will only be worth $2660, where as your $5400, so you'll make $1370 additional profit with our inflated price coin') I guess you can tell I have a very poor opinion of many of these dealers. They are definitely out there trying to fleece the uninformed. But, there's a few guys I think are good, apmex, bulliondirect, and coloradogold to name but a few -- all have very small spreads and aren't trying to sell you a 'story' instead of the 'gold'.
Ok, I digress...bottom line, do your homework when buying gold as you would with any investment. And unless you're a dealer yourself and have your researched your business plan and have your transactions costs under control, I fail to see how in the OP's comment he can be reselling immediately again at a profit, unless of course the market moves his way. But, that's what a whole bunch of people who were 'flipping houses' were doing a few years ago. They thought they were buying a house cheap, fixing it up, and selling at a profit. When in fact they likely would have made the same money by merely buying the house, doing nothing, and later selling. It all works fine when the general market is moving one direction. As history has proven, that's the exception, not the rule.
Alright... didn't mean to hijack the thread. I only re-iterate that the gold market, like any other market has a lot of 'experts' that know their craft, and their motive is not to make you a profit, but to make themselves a profit.
Jan 18, 2011, 3:09 pm
#10
Join Date: Oct 2009
Programs: UA 1K, Hilton ♦ , Hyatt Carbonado, Wyndham ♦, Marriott PE, "Stinking Bum" elsewhere.
Posts: 5,000
Buying in Yen to save Dollars
My post was in response to sailles' and pierre mclopez's posts concerning arbitrage.
Buying goods or services in Yen to save on your absolute cost in dollars is arbitrage at its finest. Airline Tix aren't the only thing you can get for a bargain in Japan but the other things make me money so I shan't discuss them here.
Buying goods or services in Yen to save on your absolute cost in dollars is arbitrage at its finest. Airline Tix aren't the only thing you can get for a bargain in Japan but the other things make me money so I shan't discuss them here.
Last edited by zombietooth; Jan 18, 2011 at 4:41 pm
Jan 18, 2011, 9:23 pm
#12
Original Poster
Join Date: Nov 2009
Location: OSA
Programs: UA Gold, ANA, Spg Gold
Posts: 103
Wow, some great responses here. Thanks especially to JudyJFLA and thehawk75! Great info!
I was originally inspired by the presidential coins thread to think of ways to buy at "break-even". Got interested in gold as a result. One of my conditions is that my Japan-issued diners CC gives me double miles on "foreign" (outside of Japan) purchases, so was looking at a way to buy while travelling and recoup back into my Japan bank account.
However, as thehawk75 mentions, the costs associated with buying gold with a CC mean that I am unlikely to break-even. Also, I am now thinking that any solution will see me travelling home with a sac-load of cash, which presents its own problems (or looking at a way to resell in Japan--gold makes sense here as easy to carry back).
Anyway, be very interested to hear more ideas/practices/advice! Thanks again for the already great info!
I was originally inspired by the presidential coins thread to think of ways to buy at "break-even". Got interested in gold as a result. One of my conditions is that my Japan-issued diners CC gives me double miles on "foreign" (outside of Japan) purchases, so was looking at a way to buy while travelling and recoup back into my Japan bank account.
However, as thehawk75 mentions, the costs associated with buying gold with a CC mean that I am unlikely to break-even. Also, I am now thinking that any solution will see me travelling home with a sac-load of cash, which presents its own problems (or looking at a way to resell in Japan--gold makes sense here as easy to carry back).
Anyway, be very interested to hear more ideas/practices/advice! Thanks again for the already great info!
Jan 19, 2011, 1:42 pm
#14
Join Date: Apr 2000
Location: Fort Myers, FL
Programs: Hilton Gold, SPG & IHG Plat, & every airline program that I can join
Posts: 2,279
Would that come into play on the customs regs about bringing more than $10K into the US from overseas?
Also most online gold brokers give a 3% discount if not using a credit card, so that makes it pricy.
JudyJFLA
Jan 19, 2011, 2:00 pm
#15
Join Date: Jan 2009
Location: Toronto
Programs: Aeroplan E
Posts: 296
Kind of on topic, in regards to buying things in cheaper markets.
Most camera lens, (Canon, Nikon, etc) are made in Japan, anyone know the prices to buy them locally in Japan? I am going to NRT and would like to take advantage if it is worthwhile.
HSolo
Most camera lens, (Canon, Nikon, etc) are made in Japan, anyone know the prices to buy them locally in Japan? I am going to NRT and would like to take advantage if it is worthwhile.
HSolo