If you do internet banking it shows up in the account details. I have two pre approved limits just waiting for me to push the button.
Consequences of "free money"
- Thread starter Shonnie
- Start date
If you do internet banking it shows up in the account details. I have two pre approved limits just waiting for me to push the button.
I dont think Ill ever have a credit card, I have a debit card for phone purchases and things but its my own money,
If you dont have the money, you cant use it is the way I see it,
I couldnt care less about who's racked up how much and cant pay it off because you have to take 100% responsibility for your own actions,
save some money! dang...
If you dont have the money, you cant use it is the way I see it,
I couldnt care less about who's racked up how much and cant pay it off because you have to take 100% responsibility for your own actions,
save some money! dang...
And if you use the credit card but pay it off every month, W2BW? That's what I do. It is a convenient tool, nothing more.
Alex
The other great thing about credit cards is having them for a "rainy day". When you really need a loan - particularly unsecured - you can't get one. 
We got into a financial bind last year through no fault of our own. (Well, no fault except perhaps trusting our solicitor to do conveyancing proficiently. Long story, solicitor screwed up conveyancing and it cost us > $100K.)
Whilst it was an exceedingly difficult year (the whole horrid story will be in April API "My Property Nightmare"), the project was ultimately profitable and the credit cards were the difference between staying in the project and making that profit, and having to liquidate at a very significant loss. So I LOVE my credit cards.
I definitely don't recommend spending $80K on consumer spending, or keeping it on credit cards for the long term (we refinanced immediately upon completion and paid off the credit cards), but the $80K available on credit cards was a real lifesaver for us in keeping our development afloat.
Several developers that I know keep $100K or even $200K of credit cards sitting around for just such a rainy day... and I learnt why! But I'll be quite happy not to have to use mine again...
We got into a financial bind last year through no fault of our own. (Well, no fault except perhaps trusting our solicitor to do conveyancing proficiently. Long story, solicitor screwed up conveyancing and it cost us > $100K.)Whilst it was an exceedingly difficult year (the whole horrid story will be in April API "My Property Nightmare"), the project was ultimately profitable and the credit cards were the difference between staying in the project and making that profit, and having to liquidate at a very significant loss. So I LOVE my credit cards.
I definitely don't recommend spending $80K on consumer spending, or keeping it on credit cards for the long term (we refinanced immediately upon completion and paid off the credit cards), but the $80K available on credit cards was a real lifesaver for us in keeping our development afloat.
Several developers that I know keep $100K or even $200K of credit cards sitting around for just such a rainy day... and I learnt why! But I'll be quite happy not to have to use mine again...
Wow! Does having 80k available on cards not destroy your perceived serviceability though? If not I'll go get an increase on my "safety card".
Good point, and yes, it does. In our case, we were fortunate to have enough servicability for that project even with $80K in credit cards. You're right that lots of people wouldn't - but then again, if you don't have that much servicability, you're less likely to be doing a development of a size that would give you $80K worth of problems
But prior to embarking on a development or renovation that has potential for hiccups (as they all do
), I'd certainly ramp up the credit card limits to whatever you can, just in case. Even for a standard $400K residential property with a reno, I'd want $30K in contingency funds, above what I'm budgeting.Perhaps a good approach would be to apply for finance with little/no credit card limit, then ramp up the credit card limits after you have your mortgage approved but before doing your renos/development, then when you're done, wind the limits down again when you want to apply for another mortgage.
We've found that if we tell the issuers to reduce the limit to $1K or whatever nominal amount because we're applying for a mortgage, when we ring them up again a few weeks or months later to say that we want the $20 or $30K back, they usually just put it straight back up.
It is worth doing, though, because even with enough servicability to have nearly $2M in mortgages and $80K on credit cards, when we got into cashflow problems last year, we couldn't even get $15K on a personal loan. Let me repeat: the real issue is that when you need the money, it's almost impossible to get it. Make sure you've got as much spare credit as you can, before you need it.
Ozperp,
Last year was the same for us.We were in the middle of a major renovation and the costs were far more than we planned for. Our contractor at the time, who we had used a few times before,was grossly under in his estimate.
We were lucky to have about 100k in CC credit available. We used it all.Even some of that "free money" no payments for 6 months.
We had about $75k of this available when we refinanced a property at the same time. Our lender never asked us to reduce it. They looked at the fact we had always paid on time.
During this time, we also purchased a small mobile home for $10k on CC.Yes, it's cheap but it brings in $550 a month rent.
It has been a tough year. I wish I could say we are seeing light at the end of the tunnel, but it is more like we are starting to take baby steps and will quickly start racing to the end.
Last year was the same for us.We were in the middle of a major renovation and the costs were far more than we planned for. Our contractor at the time, who we had used a few times before,was grossly under in his estimate.
We were lucky to have about 100k in CC credit available. We used it all.Even some of that "free money" no payments for 6 months.
We had about $75k of this available when we refinanced a property at the same time. Our lender never asked us to reduce it. They looked at the fact we had always paid on time.
During this time, we also purchased a small mobile home for $10k on CC.Yes, it's cheap but it brings in $550 a month rent.
It has been a tough year. I wish I could say we are seeing light at the end of the tunnel, but it is more like we are starting to take baby steps and will quickly start racing to the end.
I've seen those deals, I'd roll my entire home loan out to one of those personal loans for 6.99% but unfortunately they only roll out CC debt or personal loans, which is incredibly annoying.
I'm a big fan of all those GE/HSBC "150 years" interest free deals that Hardly Normal etc are constantly flogging.
I have often taken advantage of them for reno's especially for kitchen appliances etc etc. Once again as long as you are responsible they are fantastic.
The flip side is that if you are one of the poor unfortunates that these potentially insidious cards are targeted at, and dont handle it properly, you'll be screwed to the wall to the tune of 30%.
Slingshot
I have often taken advantage of them for reno's especially for kitchen appliances etc etc. Once again as long as you are responsible they are fantastic.
The flip side is that if you are one of the poor unfortunates that these potentially insidious cards are targeted at, and dont handle it properly, you'll be screwed to the wall to the tune of 30%.
Slingshot
Me too. Pretty much furnished my towhouses on them and then the tenants pay them off. Nice
The won't increase my limit on my credit card and the won't send me pre approval letters for cc from banks. but the send them to my brother and father all the time actually I got declined for a 1000 dollar card at national not long ago yet I got a loan for a ip with them and a few months later I got a loan for a ppor how does this work???
Great thread Shonnie.
I havnt read through all the posts yet, though I will.
You know how people say "Cash is king"? There is a new king of society. Convenience.
Convenience is king. Credit card companies and Banks arnt selling money or services, they are selling Convenience.
I learnt the hard way that the "No interest, Nothing to pay for 24monthes" TV commercials are nothing more than marketing tools to get people to buy things they can not afford.
I worked for a retail outlet for a year that had a No interest nothing to pay deal going, and we were pushed ever so much to offer this to EVERY customer we served, and the reason was "So they buy more"....
I now have a small $6,900 personal debt to pay off. I sold my PPOR after a relationship break up and am starting from zero again. I don't say starting from scratch anymore as I have a huge amount of new knowledge I would never have learnt if I hadn't gone through the bad times.
Only trouble now is, I need a car. Am going to borrow for a 6-8 year old 4cyl car and pay it off ASAP along with the personal loan of $6,900 and then its IP time.
Thanks for reading.
Cheers
Mick
I havnt read through all the posts yet, though I will.
You know how people say "Cash is king"? There is a new king of society. Convenience.
Convenience is king. Credit card companies and Banks arnt selling money or services, they are selling Convenience.
I learnt the hard way that the "No interest, Nothing to pay for 24monthes" TV commercials are nothing more than marketing tools to get people to buy things they can not afford.
I worked for a retail outlet for a year that had a No interest nothing to pay deal going, and we were pushed ever so much to offer this to EVERY customer we served, and the reason was "So they buy more"....
I now have a small $6,900 personal debt to pay off. I sold my PPOR after a relationship break up and am starting from zero again. I don't say starting from scratch anymore as I have a huge amount of new knowledge I would never have learnt if I hadn't gone through the bad times.
Only trouble now is, I need a car. Am going to borrow for a 6-8 year old 4cyl car and pay it off ASAP along with the personal loan of $6,900 and then its IP time.
Thanks for reading.
Cheers
Mick
