Overdraft or Credit Card

[trying hard]

Hello all,
I have been lurking here for a while and finally have a question for the knowledgeable people of Somersoft

We run a small business and currently use a credit card as an "överdraft"
The card has a $16,000 limit and is usually paid out at the end of each month (except through our quiet time when it trully becomes an overdraft so we can eat )

I have been looking at a number of online calculators in regard to the purchase of an Investment Property and they have indicated that the Credit card may be a problem

Would I be better off getting a $10,000 overdraft from our business bank and reduce our CC down to $5000?

Thanks

 

[Rolf Latham]

Hiya

A proper overdraft may be regarded as an IO loan by many lenders.

The CC is calculated at 3 % per month repayment so you may get some advance on the borrowing cap if you convert to an overdraft.

ta
rolf

 

[trying hard]

Thanks for your quick reply Rolf

So (for the calculators sake) how much would I put in the "öther loans" bit?
Do the banks assume you have the whole 10,000 used up? so 8.67% of 10,000?

 

[RumpledElf]

Hrm, I have a debit visa with a 'proper overdraft', have had it for over a decade. You seriously mean these are considered differently? I always put it in the 'credit cards' box. Because my pay goes directly into that account I think I've only been asked to make a payment on it once, when I was on a particularly major spending spree.

 

[Rolf Latham]

Make it at limit and work it at 10 %..thats a better representation of the way they will look at it

ta
rolf

 

[moyjos]

Bump..here ya go mate

 

[trying hard]

Thanks mate

hello again (needed a bit of help getting back)

here I am after 6 months of non activity in the IP stakes

I have managed to reduce or credit card/overdraft down to $10,000

my husband is still ambiguous about investing in property and thinks we are better of investing $$$$ back in our business.

we are both getting on (early 50's) and he feels it is now too late to cash in on any REAL capital gain.

I can sort of see his point when for every $1 we invest in the business we reap (nett)~$1.40 every 3 months or so (we import and sell stuff)

he wants to keep reinvesting and growing the business au wide for the next 3-5 years and sell equity in the business.

anyway..enough waffling i guess my question is...how old is too old to start investing in property....given that we are NOT high earners so tax benefits are not a big incentive.

 

[Rolf Latham]

Hiya

Stick with the biz

if u can get an annualised rtn of over 120 non compound, why play with property ?

leverage is great if things go up....................

Cash on cash rtn is good any time

ta
rolf

 

[BayView]

Hiya

Stick with the biz

if u can get an annualised rtn of over 120 non compound, why play with property ?

leverage is great if things go up....................

Cash on cash rtn is good any time

ta
rolf

What Rolf said.