Why take a payday loan when you can do manufactured spending?
 

Ever think of using MS as an alternative to a payday loan? I don't use it per se, but if you think about it, MSing something is effectively delaying payment for a month or more. So why don't people buy gift cards and load their BlueBird/Serve/RedBird, etc instead of using payday loans and paying outrageous rates/fees?

:rolleyes:

People who often use payday loan isn't eligible for a credit card due their bad credits. Even if they had credit cards, they would already be taking out cash advances!

I would guess the overlap of folks capable of doing MS and those who need a payday loan is small to non-existent. It seems to me that most folks MSing are those with above average incomes and with the mindset to to exploit the financial system not be exploited by it. There are some exceptions at least to the income because I have seen some mention of students/recent graduates MSing but on the whole these appear to be two nearly completely different groups of individuals.

those who resort/become preys to payday loans have either maxed out their CCs or are in a financial bind. And even if they can, if they bought GCs, they'd likely go on a shopping spree without realizing they have to pay the CCs they used to buy them.

I'd bet people who are running that close to the edge are working 8 hour shifts or two to three jobs. One walmart cashier told me they could only work 30 hours a week so he had two other jobs (and still no insurance). Maybe they have a family illness ans spend time with doctors.

I wager 98% don't have the time (between work and life) to run around buying gift cards, or are uneducated, lacking skills required to juggle all the details, or don't have any credit at all.

Credit cards themselves are payday loans....I guess some/most places you can't pay rent on a CC so there's that. But as mentioned, the only people by in large intelligent enough to understand the basics of MS and yet still find themselves in a financial bind are college kids.

It's "by and large", and I don't think your claim is true. There are too many people in a financial bind for it to be likely that they are all unintelligent.

Also, the basics of MS aren't exactly rocket science. It's the bother of doing it that stops most people.

Ah...MS and Payday loan just doesn't belong in the same sentence. I do MS to travel the world and I pay off my credit card before the statement closes. As many of you have mentioned, it's a different demographics we are talking about.

Well disregardless, for all intensive purposes, it's hard to MS if you can't get approved for a credit card like us top notch English majors.

This is where it all start and even if approved, if given very low CL like $1.5K or less, that'll be difficult to MS especially with the 'ole blue card that was most desired by all until recent massive shutdowns(for those they deemed to "abuse" the rewards).

with activation fees for most GCs used for MS, that can stack up to huge amounts depending on volume of MS one does. for this reason, it takes money to make money/miles/points.

^:D

surprised no one has mentioned what happens when you have a problem with the card you bought and you have no money to pay it back while waiting for the situation to get resolved (sometimes up to 4+ months!). What do you do then, just ms more? Get your financials in order, have discretionary fund, and then come back to us.

Due to my current unique employment / financial situation, I've successfully used my rewards CCs and various MS techniques to pay my tuition for my graduate program, and have been gradually paying down the balance each time I "balance transfer" by MSing on various cards. I'm not proud of it, and obviously would have preferred to pay in-full, upfront if that had been possible. My employer reimburses around 65% of tuition costs, so I will be receiving that money later this month (once I show them that my C's really do get degrees) to finish paying off my initial tution charges. I understand the risks involved with doing this, but so far this has been a wonderful opportunity for me to earn miles and cashback while managing my own short-term payment plan (<4 months) for tution that I would not normally be able to afford upfront.

Not exactly a payday loan, but I just wanted to share an example of a situation where MS can be useful in more than just earning miles / points.

like a baby. making noise. don't know what to do. stupid. ignorant like a child..
 

the fact that such a thread even exists is emblematic of the downward spiral of FT:

business people/road warriors-> leading edge professional types-> bow tie and Emily types-> mommypoints-> students living off MS-> unemployed living off MS-> the indigent.

and this is the army of ahem... 'peers' who are out there saying and doing the wrong thing every day. think early scene in Avatar when the blue monkey is chastising Jake 'you're like like a baby. making noise. don't know what to do. stupid. ignorant like a child..'

https://www.youtube.com/watch?v=h9P5L3W_oQc

How would somebody who is in need of a predatory payday loan be able to float hundreds or even thousands of dollars with the risk of not having access to it for a month or 2?

This forum needs a "like" button

Payday Loans and MS, oil and water ?

I'm actually in that situation. I'm self employed as an independent contractor service professional. It's normal in my line of work for clients to take months to pay. I'm currently floating about 7k. When the statement closes for personal cards, or when the payment due date comes for business cards, I MS on another card and pay off the one that's due. I just need one or two clients to pay, and then I pay it all off.

It's basically a cheaper way of taking a cash advance from your cards. It's more of a budgeting tool. Actually that's the line I use when somebody asks me why I buy these cards.

The way I see it is that MS needs discipline, and if you're taking payday loans at those high rates you might be lacking that discipline and is forced to get loans at those rates. So like one poster said, they are totally different kinds of people, Oil vs Water.

Been floating money with MS now for a couple months now. Works really well and the only real limit is how much you can get into a Serve/Bluebird/Target/etc prepaid card per month.

I actually had been doing this for a while. It is great way to borrow money without the fees/interest. Floated about $10K (bb/serve, amzn payment, AFT) for 2 years instead of taking out a loan. And at the same time get at least 10,000 pts/miles every month for "borrowing" the money. I say at least 10,000 miles because for the longest I was buying VGC with ink ($5000/month so 25k UR) and loading bb/serve at WM. It is such a crazy concept of getting paid (pts/miles) to borrow money at 0% interest. It's not easy and extremely stressful and risky because if MS were to die/stop, then you are basically screwed. It was pretty much a job, and forcing myself to MS 10K every month to pay off the previous month's bill (most of the time JUST being able to make the payment by due date). As of today, I have paid off my "loan" and relaxed a bit on the MS ^ (because many MS options are dying!) and just enjoying the hundreds of thousands of miles I have accumulated! :cool:

Also, I would not recommend doing this in today's environment, unless you are doing like $1-2K/monthly or can pay it off if MS were to stop one day.

this makes no sense. what kinda service is this where you don't get paid upfront or at the end? and assuming you've been doing this for a while, and this aint your first rodeo -- why are you in $7k debt to begin with? you'd think past profits and savings would hold you over for a new contract/client.

slow clap for the person who clearly doesn't know what he's talking about. most GC fees are an effective 1% loan, so not 0. and since you're using Ink that's effectively a 2.5% loan.

$1-2k/mo LOL ok bud. this forum reallyyyyy requires some kinda entrance test.

Ink is 2.5% fees (back then with Visa Savings Edge) - we both agree here. But I get 5% CB essentially if I were to turn my UR points into cash. I am now up 2.5% in profit for every $200 vgc I bought back then. But I rather keep the UR points and redeem it for 3-4x that value. But you can essentially redeem the UR points for cash and hedge your fee costs and maintain that 0% interest or even net a profit.

Also, for using other CC's, all cc's essentially give you 1% cash back thus it negates the gc fees.

I apologize for this assumption because I thought this is an MS thread and that this was kind of like given that cc gives at least 1% cashback. MY BAD. you are right. this forum needs an entrance exam.

cept that's not what you did. you "accumulated 100s of thousands of UR points" for presumable future redemptions. so you paid the 2.5% fee.

so what you're saying is that you like running around in circles like a hamster to buy and liquidate GCs just to end up in the same spot every month? surely there are much easier ways of making/floating money with that time, for a net profit like you like to say :)

and no NOT all CCs are 1% CB cards.

I guess it's perspective. You see 2.5% fee, I see saving money on my vacation. At the end of the day, I am saving money overall (netting a profit). I don't look at it like paying a 2.5% fee because I would/did redeem it for 3-4x its value when I go on vacation. So 15K UR gets me 1 night in Andaz Costa Rica which costs $500/night. Even better of a redemption since I am Hyatt Diamond. If I am going to go on vacation there anyways, instead of paying $500, I am using 15K UR ($150 Cash value), I save myself $350/night. So instead of using my UR pts to negate the fees, I am "transfering my vacation funds" aka a portion of the $350 that I saved to pay for the fees and in the end I am profiting since I saved money on my vacation.

Fortunately, my office building is very close to a walmart, target, and fee free atms. And there is a staples along the way as well. But now you can just order VGC online anyways. So didn't really take a lot of time; I go during lunch. And I do not liquidate to end up in the same place every month. As a result of the MS, I was up $10K in cash, which I used to invest in something, and after two years, as a result of my investment, I net a profit which I used some of it to pay off this $10K amount that I have been floating. I am sure there are many other ways to float money; but getting paid to do it? I do not know of any other at this moment. Care to share your ideas?

You are right, not all CC's are 1% cashback. You must be the only person on the entire flyertalk using one of those credit cards.

Scary thought.....Payday loans and MS. And I had thought not being able to float MS funds was bad

You may want to let go of trying to rationalize your opinion here. You're just digging deeper and looking more like you have no clue. zzrayzz has pretty much laid out how it works and the %'s.

Not that I know of. The cheapest loans I have got:

• 0% cards for 1-2 years
• MS at statement-start; Use floated money; Pay card 1-2 months later

I invest about 10% of my credit limit in index funds and also get points every time I MS. If you value points, Credit cards effectively have a negative interest rate.

Technically correct, but I'm curious: Why would anyone ever get a non-rewards card? The only advantage I see is the lower interest rate (8%) when you carry a balance. However this interest rate is higher than than the 0% that *all* credit cards provide during the grace period.

I think they get low interest rates because they don't qualify for the 0% intro cards?

In terms of investing 10% of your CL into Index funds -- have you ever gotten caught in the headlights when the stock portfolio did not grow? Do fees eat up returns when you are only putting the money in for a brief period?

I view Flyertalk more like: Neocon psychopath baby boomers -> ... well... the children of neocon psycophath baby boomers who are equally selfish and also completely lack perspective

Edit: I do actually think it's silly to suggest people use MS instead of payday lending as the reason people do payday lending is because they're left out of the normal bank system and cycle. It's clever, but the OP has no idea how the indigent actually live.

Possible. Just to be clear, when I said "grace period" I meant the time between the day the transaction posts and the day payment is due. All credit cards have a grace period so even if you don't have a 0%-intro card, you can get a series of 1-2 month interest-free loans (as long as you have access to an MS method). The only advantage of a 0%-intro card is that you don't have to constantly make the card pay itself.

No, the money I invest can be carried entirely on my 0% cards. So even if I am hit with the worst S&P500 historical loss (40%) and I lose my MS methods, I'll still have a few years to pay up. Or more likely, I will apply for more 0% cards by then and keep refinancing. Or more accurately, I'll keep debt pyramiding :)

I use Schwab's commission-free funds for all short term investments. If I have to sell them, my only "fee" is the 1-cent spread per share. This usually comes to $0.01/$50= 0.02%. Compared to the expected 9% annual returns, the spread is pretty negligible.

Both my mother and my brother use credit cards a lot. Not necessarily for rewards, but because they don't have enough money to buy stuff without credit cards. They typically only pay the minimums on everything. The reason to get a non-rewards card is that it's another card to have, therefore you have access to more credit. It might not be the best card, but if you get a pre-selected offer, might as well get the card.

yep, agreed and pretty clear cut.

I was talking about non-CB rewards cards. tho I suppose miles and points can many a times be converted to cash even if not at a 1% rate.