Getting spending up without the Mint
Aug 22, 2012, 4:28 pm
#2717
Join Date: Oct 2009
Location: Land of the parrots and parrotheads
Programs: Several dozen
Posts: 4,820
Never borrow money unless you can make a profit off the transaction.
Leverage only to make a buck off of other people's money.
Leverage only to make a buck off of other people's money.
Aug 22, 2012, 4:43 pm
#2718
FlyerTalk Evangelist
Join Date: Aug 2011
Location: Austin, Texas
Programs: Airline nobody. Sad!
Posts: 26,062
Pretty similar to buying stock short in a way, just thought of it. Not the best move for newbie stock investors, but a major tenet (along with selling short) of hedge funds and other well-capitalized stock market profiteers. Of course, it can crash and burn much easier (though many of them have moved onto derivatives, but that is outside of the entire scope of this forum, never mind this thread). Most of this is about risk tolerance. If a bank was willing to lend you $40000 at 1.9% interest (see: car loans, and I think buying a $40000 car isn't necessarily a good idea anyway, at least not as a financial decision) but you could earn more via any sort of investment, it would make sense to do it. How many people got into this through the massive 0% balance transfers that were widespread before, roughly 2009?
Aug 22, 2012, 5:19 pm
#2719
Join Date: Nov 2002
Posts: 920
Truthfully, I disagree, and due apologies for the long post that follows, hopefully my logic isn't too meandering.
For me, it would depend on a very complicated and detailed analysis of what the points were worth to me, how much longer it would take me to earn the points if I stayed down to the point where I was paying in full, in terms of when I could apply for a card if I had to wait another churn cycle, and how much interest I was paying for how long. Someone else posted that points devalue around 3-5% per year, and I agree with that. However, they tend to devalue in fairly big chunks in my experience, maybe 10-20% at a time. If I got, say, 100,000 AA miles through current offers (which I value at 2 cents per piece), that is worth. To do that, I have to spend $6000 in 4 months (or 3 months, the exact length is not important to my argument). What if I can only payoff $1000 per month? Whether that is my limit total, or my remaining amount after other churns is irrelevant to this. If I spend $1000 in months 1-3, then $3000 in month 4 through various methods, but can still only payoff $1000, I will pay roughly 16% interest (I believe my AA cards are 15.24%), or 1.33% per month. 1.33% of $2000 is $26. After paying $1000 off, I will then pay 1.33% on the remaining $1000, another $13. Let's round it off to $40. (I'll leave out the effect of the amount of the minimum payment paying the principal). In effect, I have paid $40 to get 50,000 miles sooner (as I could have gotten 1 card and easily cleared it). However, I would have to wait 18 or more months to be approved for another AA card. During those 18 months, AA miles will be devalued around 4.5%-7.5%, again, let's say 6%. My value of $1000 for those extra 50,000 miles is reduced to $940, or $60. However, if I apply for both cards, I will receive $2000 of value, instead of $1000+$940. Therefore, paying $40 in interest has earned me $60 in value, or a net gain of $20. Also, I will have 100,000 miles instead of 50,000, which is a lot closer to some of the high value awards that may potentially be had. Interest is not the goal in this certainly, but it also is not the mortal enemy in certain situations. "Don't pay interest" is simply a empty mantra, not backed up by any particular mathematical analysis other than a desire to pay an absolute $0 for this, and a "warning" to newbies that helps an advice giver feel better that hopefully someone won't go into debt playing this game, which is a definite losing situation. If someone is smart, paying interest makes sense in specific situations, if that additional leverage helps someone play the game to greater success.
For me, it would depend on a very complicated and detailed analysis of what the points were worth to me, how much longer it would take me to earn the points if I stayed down to the point where I was paying in full, in terms of when I could apply for a card if I had to wait another churn cycle, and how much interest I was paying for how long. Someone else posted that points devalue around 3-5% per year, and I agree with that. However, they tend to devalue in fairly big chunks in my experience, maybe 10-20% at a time. If I got, say, 100,000 AA miles through current offers (which I value at 2 cents per piece), that is worth. To do that, I have to spend $6000 in 4 months (or 3 months, the exact length is not important to my argument). What if I can only payoff $1000 per month? Whether that is my limit total, or my remaining amount after other churns is irrelevant to this. If I spend $1000 in months 1-3, then $3000 in month 4 through various methods, but can still only payoff $1000, I will pay roughly 16% interest (I believe my AA cards are 15.24%), or 1.33% per month. 1.33% of $2000 is $26. After paying $1000 off, I will then pay 1.33% on the remaining $1000, another $13. Let's round it off to $40. (I'll leave out the effect of the amount of the minimum payment paying the principal). In effect, I have paid $40 to get 50,000 miles sooner (as I could have gotten 1 card and easily cleared it). However, I would have to wait 18 or more months to be approved for another AA card. During those 18 months, AA miles will be devalued around 4.5%-7.5%, again, let's say 6%. My value of $1000 for those extra 50,000 miles is reduced to $940, or $60. However, if I apply for both cards, I will receive $2000 of value, instead of $1000+$940. Therefore, paying $40 in interest has earned me $60 in value, or a net gain of $20. Also, I will have 100,000 miles instead of 50,000, which is a lot closer to some of the high value awards that may potentially be had. Interest is not the goal in this certainly, but it also is not the mortal enemy in certain situations. "Don't pay interest" is simply a empty mantra, not backed up by any particular mathematical analysis other than a desire to pay an absolute $0 for this, and a "warning" to newbies that helps an advice giver feel better that hopefully someone won't go into debt playing this game, which is a definite losing situation. If someone is smart, paying interest makes sense in specific situations, if that additional leverage helps someone play the game to greater success.
Aug 22, 2012, 5:23 pm
#2720
FlyerTalk Evangelist
Join Date: Aug 2011
Location: Austin, Texas
Programs: Airline nobody. Sad!
Posts: 26,062
I'd go 1 step further than "Dont pay interest". If you arent making $ while earning miles/points then you are doing it wrong. Not only would I not "pay interest", I'd expect my endeavours to include a small sum of money to hit my bottom line as well as the points/miles.
.
Aug 22, 2012, 5:32 pm
#2721
FlyerTalk Evangelist
Join Date: Jul 2003
Location: Florida
Posts: 29,767
The person said s/he may have to pay interest because s/he has been buying all these GCs as well as having $25K tied up at a certain bank... If one cannot float some chunks of money, one should really think carefully before gets into taking on all the spend which could not be reasonably paid off in time.
Of course there are a lot of analysis / calculation going into it to make sure one actually "generate" a profit at the least cost possible. One thing to keep in mind, the miles / points while are valuable "currency", they themselves are not real money (yeah I know one can barter this and that - just wait till you get caught... there is no shortage of threads in each airline's forum about accounts being shut down.) On top of that, travel is a discretionary spending. Even with free flights and free hotel stays one still incur pretty pennies when travel...
People need to get their priorities straight before being carried away in this pursuit.
Aug 22, 2012, 5:51 pm
#2722
FlyerTalk Evangelist
Join Date: Aug 2011
Location: Austin, Texas
Programs: Airline nobody. Sad!
Posts: 26,062
Indeed, I know it wasn't directed at me, and I didn't say it was a good idea for the person you were speaking to either . I know my limits, heck I'm bumping them right now, but I am still well within a comfort zone. I've planned to have a very high travel budget in my life (it is a major priority of mine), this game just helps me stretch my pennies further. If I made $150k a year, I'd spend $30-40k on travel, and just buy business or first class and stay at any hotel I wanted, and wouldn't bother much with the game.
Speaking of this, I finally got tree cutting approval for the Brazilian rain forest. What a pain it was to get my permit, hopefully it isn't a sign of things to come
.
. I know my limits, heck I'm bumping them right now, but I am still well within a comfort zone. I've planned to have a very high travel budget in my life (it is a major priority of mine), this game just helps me stretch my pennies further. If I made $150k a year, I'd spend $30-40k on travel, and just buy business or first class and stay at any hotel I wanted, and wouldn't bother much with the game.Speaking of this, I finally got tree cutting approval for the Brazilian rain forest. What a pain it was to get my permit, hopefully it isn't a sign of things to come
.
Aug 22, 2012, 6:57 pm
#2723
Join Date: Aug 2008
Posts: 385
For some opportunities, you must have business accounts, and for other opportunities you must have business cards. I seem to recall MommyPoints saying AMEX asked for a tax transcript (somewhat ala their Financial Review) before approving her business card application.
Been a bit since I have AMEX bizzed, but I do not recall AMEX demanding tax info upfront at the time of application. Has the AMEX bizzing business changed or become more intrusive upfront? I was under the impression that AMEX liked to first lure you into getting the business card first, before engaging Fang to run an FR to shut down all your accounts, disrupt your life, seize your tax records, hold your first born hostage, burn your village, scatter your cattle, then say all is well - have a nice day.
An upfront tax transcript request would make some credit sense, but this is not in line with my SO's recent experience of not being asked for a tax transcript for her biz, but then being miniFR'd with a temporary shutdown after spending a few thousand for furniture and her rentals.
So what is the story with AMEX biz cards? Is it AMEX policy one way or the other on tax records or do the cardinals just shot dice to decide who will have to provide tax transcripts at the time of application?
Been a bit since I have AMEX bizzed, but I do not recall AMEX demanding tax info upfront at the time of application. Has the AMEX bizzing business changed or become more intrusive upfront? I was under the impression that AMEX liked to first lure you into getting the business card first, before engaging Fang to run an FR to shut down all your accounts, disrupt your life, seize your tax records, hold your first born hostage, burn your village, scatter your cattle, then say all is well - have a nice day.
An upfront tax transcript request would make some credit sense, but this is not in line with my SO's recent experience of not being asked for a tax transcript for her biz, but then being miniFR'd with a temporary shutdown after spending a few thousand for furniture and her rentals.
So what is the story with AMEX biz cards? Is it AMEX policy one way or the other on tax records or do the cardinals just shot dice to decide who will have to provide tax transcripts at the time of application?
Aug 22, 2012, 7:15 pm
#2724
Join Date: Sep 2011
Posts: 385
They're crapshooting I would say. Applied for SPG Biz and Gold Biz recently and was not asked for any tax returns or documents or anything. For the Biz cards you have to call to activate them, and they like to have a very friendly conversation with you like what kind of business is it and how much do you plan to spend a month and do you want any cards for other users. Now I'm walking a tightrope trying to make the required mega-spend, w/out spending so much so quickly as to attract unwanted attention, at least not until I've earned all the bonuses. Afterward I'll still be careful how I use the darn things and I'll close some of them before they can do it for me and also before the annual fee hits.
Aug 22, 2012, 7:45 pm
#2725
Join Date: Aug 2011
Location: On the Lake USA
Programs: Marriott Ambassador, Hilton Diamond because they have nothing higher
Posts: 523
I can only speak from my own experience related to Daves question about Amex Biz cards but I have found it to be similar to Citi and Chase with Visa Biz.
My SO and I both have businesses that have been legitimately incorporated for many years and both Biz's I founded and she has been listed as an officer but yet we have applied for Biz cards for both companies randomly based on which one we used last. So if it isn't a targeted offer from AE for ABC corp then we pick which one we haven't used for a year or so to get the new card.
In regards to the question I would say I have never had as many requests for verification as I have the past two years. I think part of this is from addresses not always matching credit reports from moving but still far more requests for Articles of Incorporation, business license, utility bills ect.
One thing I learned from this is if you have 2 addresses like many people stick to one to apply for cards.
My SO and I both have businesses that have been legitimately incorporated for many years and both Biz's I founded and she has been listed as an officer but yet we have applied for Biz cards for both companies randomly based on which one we used last. So if it isn't a targeted offer from AE for ABC corp then we pick which one we haven't used for a year or so to get the new card.
In regards to the question I would say I have never had as many requests for verification as I have the past two years. I think part of this is from addresses not always matching credit reports from moving but still far more requests for Articles of Incorporation, business license, utility bills ect.
One thing I learned from this is if you have 2 addresses like many people stick to one to apply for cards.
Aug 22, 2012, 8:49 pm
#2726
formerly gohima
Join Date: Jun 2011
Posts: 519
Indeed, I know it wasn't directed at me, and I didn't say it was a good idea for the person you were speaking to either . I know my limits, heck I'm bumping them right now, but I am still well within a comfort zone. I've planned to have a very high travel budget in my life (it is a major priority of mine), this game just helps me stretch my pennies further. If I made $150k a year, I'd spend $30-40k on travel, and just buy business or first class and stay at any hotel I wanted, and wouldn't bother much with the game.
. I know my limits, heck I'm bumping them right now, but I am still well within a comfort zone. I've planned to have a very high travel budget in my life (it is a major priority of mine), this game just helps me stretch my pennies further. If I made $150k a year, I'd spend $30-40k on travel, and just buy business or first class and stay at any hotel I wanted, and wouldn't bother much with the game.
Aug 22, 2012, 9:13 pm
#2727
Join Date: Jan 2008
Location: LAS
Programs: DL PM, UA PS, Hyatt Globalist, Marriott Titanium
Posts: 4,904
Aug 22, 2012, 9:16 pm
#2728
In Memoriam
Join Date: May 2001
Location: Southern California
Programs: Hertz 5 star, Priceline Hotel bidder. AA PLT, 1MM.
Posts: 2,910
2) what is so funny about expensive prescriptions? A friend has a prescription that costs $2,500+. He called Citi ahead of filling that prescription at a grocery store's pharmacy. I have a prescription that is $160 for 4 pills only. And this is a regular prescription.
If it is funny to you, that means you have very little knowledge outside than scrambling for some cash rebates.
If it is funny to you, that means you have very little knowledge outside than scrambling for some cash rebates.
A couple days before the statement "cuts", I paid both cards online (from checking) so my credit report would not show me with high utilizations.
Aug 23, 2012, 7:23 am
#2729
Join Date: Nov 2011
Posts: 766
Advice for fishmen
As everyone who spends their time casting their nets widely knows, the regulatory agencies you work with can be quite finicky when the fishing is good. They will often shut you down for no good reason and it can be some time until they give you your hard earned investment back.
However, if you are a more clever fisherman, you can link your investment the regulator is holding to your other investments before the regulator comes calling. When he does come calling, that link can be used to get your investment back quickly. Let's just say this worked quite well for me.
However, if you are a more clever fisherman, you can link your investment the regulator is holding to your other investments before the regulator comes calling. When he does come calling, that link can be used to get your investment back quickly. Let's just say this worked quite well for me.
Aug 23, 2012, 7:38 am
#2730
Join Date: May 2008
Location: WAS
Programs: AA Ex Plt
Posts: 1,630
Why? You'd be looking at a substantial part of your take home $$$ to pay for things that you could otherwise get for a lot less $$$ (if not free). If you are clever enough to find a well paying position, you are clever enough to know not to let $$$ slip away
Plus, you'd miss the game itself in finding the deal
Cheers
Plus, you'd miss the game itself in finding the deal
Cheers