Originally Posted by
PtsJunkieWI
For someone who doesn't have the resources to "float" large quantity of MS activity, a HELOC appears to provide that. But the loan is not free and negates, or closely zeroes out, the gains in points etc. And if you don't have the float, don't try to go big in this game. It's M.O.N.E.Y. and you'll still owe it if things go sideways.
In truth, you don't need a huge pile of cash to do a lot of MS. Just enough to cover the cards you made purchases with. Then switch to others the following month. Each card gives you ~25 day free loan, so you as long as you can eventually pay off everything you can rotate card usage, paying off "A" by charging on "B and liquidating, then payoff "B" by charging on "C" and liquidating. Eventually, the bill must come due. I payoff EVERYTHING to zero twice a year, just for my own sanity. But otherwise, it's just a rotation of sorts. A one-person Ponzi scheme, if you will... with my own money.
Ponzi scheme makes it sound like fraud. A much more appropriate analogy comes from normal business practices: you have negative working capital. You receive cash from your "customers" a month before you owe payments to your "suppliers". This is one of the hidden engines behind Amazon's insane growth and absolute decimation of retail: they take your money as soon as you order your product, but don't pay suppliers for a month or more. When you do $200B+ in annual revenue from retail, this amounts to a $15-20B cushion of negative working capital (basically an interest-free loan) with which you can grow your business. This is also why Amazon could lose money for years without running out of cash--if you're growing revenue at 25% per year then you're also growing the size of your negative working capital, which effectively gives you the cash for more growth.