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Old May 8, 2013, 06:51 PM   #26
talmy
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Quote:
Originally Posted by Cubytus View Post
On the other hand, it is a highly risked move to borrow money to invest, say, in RRSP, or any other type of stock investment. Most financial planners will discourage people from doing so.
Leveraging like this makes investments very risky. I have broker accounts but margin trades are not set up, on purpose!

Quote:
Additionally, avoid credit cards that have rewards on them. They end up costing more for the consumer as well as the retailers, who in the end are raising prices to make up for the losses.
Sorry. I gotta play the game. I've got four cards, all with cash-back rewards. Every purchase I can make via a card I do so.

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My other bank has proposed that I get a Visa from them, but I politely refused, as I seen no clear advantage in having both a MasterCard and a Visa. I told them that I may be considering an Amex since one or two big chains here only accept it as a means of payment, and they didn't have any.
I've got Amex only for Costco (it's the only card they take). The other three cards have varying quarterly 5% cashback offers, so I determine what card to use by the current offer. BTW, a Discover card gives 5% off at the online Apple Store, even on refurbs.

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I kept my card at $9k mainly because I know that hitting more than two-thirds of the limit on a card is detrimental to one's rating, and that it was historically harder to get a limit increase than a decrease. Does this still holds true?
I don't know. I've never asked to get a limit increase.

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One thing I still don't know: I was told that a credit card account that has been opened a long while ago was worth more "positive weight" in the credit rating than a recently-obtained credit card. Is that true?
Certainly true. Opening an account basically reduces your pool of available credit so will at least temporarily reduce your credit rating. Opening multiple cards is a "red flag." This is another reason not to open an account for just one purchase.
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Old May 9, 2013, 12:10 PM   #27
sostoobad
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Obviously getting a credit card means you need to pay for the things you buy, but anytime someone offers me free financing vs cash and the price is the same....I will take the free financing...I am a big boy and don't forget to make a payment etc..

I have used the Apple financing to buy a Air, worked out great.
Very few people can buy a new car for cash, and again if the financing is free or very low, I would keep the cash and take the loan.

How much cash do I want to put into a depreciating asset....ZERO

I use my Amex card to buy things like gas and groceries at the end of the yr, I add up my points and usually get $300-500 at Lands end, free clothes, had I paid cash....no free clothes....depends on the deal folks.
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Old May 9, 2013, 12:38 PM   #28
Mrbobb
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Finance Curiosity: Mark Zuckerberg got a mortgage for his house! (nothing ostentatious, just a few millions) WHY bother?
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Old May 9, 2013, 01:50 PM   #29
Cubytus
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Quote:
Originally Posted by talmy View Post
Leveraging like this makes investments very risky. I have broker accounts but margin trades are not set up, on purpose!
In a naturally high-interest loan and low-interest investments, even cutting as much as you can on brokerage fees, your return is likely to be razor thin, probably not enough to beat inflation on the long term.

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Sorry. I gotta play the game. I've got four cards, all with cash-back rewards. Every purchase I can make via a card I do so.
Again, this is detrimental to the end consumer. Some jurisdictions don't allow retailers to add a fee when paid by credit card, but sometimes they do allow to put a discount when paid for by debit or cash. This would be fair for smaller retailers as it costs them much just to rent the machine and pay the commission on transactions.

Amex used to be the most expensive for them to take, the reason why most retailers don't take it. I don't know if it's the case for Discover, it doesn't seem to be widespread here up north as I neversee their logo on the

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I don't know. I've never asked to get a limit increase.
I did, once, since I started with a $1k limit, and my first big purchase would have been a computer. Back in 2004 you couldn't get a decent computer below $1k, so I asked for a $500 increase that was refused at the time. Then came meager times, and I kept on loading the card, and when I was about to hit the ceiling, it suddenly increased by itself. This practice is now forbidden as it was argued that it pushed some (irresponsible) people deeper into debt, but I was lucky enough that, when I finally wiped it clean, I kept the higher limit.

This high limit may come in handy if I need to finance my parent's machines, as they have a credit so bad they can't even apply for a card. Of course I would make them sign a contract for that.

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Certainly true. Opening an account basically reduces your pool of available credit so will at least temporarily reduce your credit rating. Opening multiple cards is a "red flag." This is another reason not to open an account for just one purchase.
I meant, if I would close the older account to open another, maybe with better interest rate? I read about a 8.9%, no annual feee credit card available only to those with the best credit history, and I was told they even checked the neighborhood one's living in. Ironically enough, mine is rather poor. I'd rather live poorly and be debt-free than feeling falsely rich and have a passive more than 150% of what I actually have. I lived what it is when creditors and collectors are calling every day.

Still, it doesn't answer my silly question so as to know whether or not Apple requires applying for a new card each time you need to finance a Mac.
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Old May 9, 2013, 07:13 PM   #30
Mrbobb
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Originally Posted by Cubytus View Post
Still, it doesn't answer my silly question so as to know whether or not Apple requires applying for a new card each time you need to finance a Mac.
I believe that is a negative.

Merchants partner with a bank, so when u do this, u are given a CC issued by that bank. You can use the CC for other purchases but is it's usually high rate >18%.

As long as Apple doesn't change bank or terms, u can keep buying stuff from Apple.
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Old May 9, 2013, 07:32 PM   #31
racer1441
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Originally Posted by talmy View Post
Consider yourself lucky. It's considered a bad practice to borrow money to buy depreciating assets.

Patience! Wait until you can make the purchase in cash.
This is 100% wrong in today's world. Yes, when interest rates were 5, 8, 10, 20 percentage, yes. But now interest is at practically nothing. Use house money.

The only way it's a problem is if you aren't diciplined enough to pay off by the end of the interest free period. If that's the case, you'll screw up some way no matter what, so why bother.

----------

Quote:
Originally Posted by Mrbobb View Post
Finance Curiosity: Mark Zuckerberg got a mortgage for his house! (nothing ostentatious, just a few millions) WHY bother?
Money is cheap now. Why pay a lump sum when you can pay pennies for the loan and still have the cash.
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Old May 12, 2013, 02:42 AM   #32
Cubytus
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I don't know if we are reading the same news, but interest on credit cards keep on climbing, even when base rate is at an historical low. Now it is considered standard to have a credit card at 21.99%.

My student line of credit interest surely hasn't been cut, and I am sure some may have seen this picture stating that the richest banks could borrow from the government at 0.75%, while students, often the poorest side of homeless people, are charged 6.8%.

I do agree that, if the interest is 0% and you are disciplined enough to pay before the grace period, then go for it, unless your credit rating takes a hit because of this borrowes money.

Other silly question here, does applying for a new card has any worse detrimental effect on the credit rating than getting a line of credit, or a loan? I never could understand why a bank would push a credit card instead of a goods-specific loan.
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