Pay off a credit card with a credit card?

Random

Right, I'm not doing this I just wanan see if my thinking on it is correct.


You have a credit card with 1000 euro limit. You spend 500 euro on it. Your statement comes with 500 euro owed on it.

You put your 500 euro into Paypal. Then withdraw it to your bank account (no charge as it's over 100 euro). Then use that to pay off your credit card.

Repeat each month.

Essentially you've got a loan of 500 euro which you can avoid paying back for an infinite period of time?

What am I missing?

Sam Vimes

ciaranfo wrote:

Right, I'm not doing this I just wanan see if my thinking on it is correct.


You have a credit card with 1000 euro limit. You spend 500 euro on it. Your statement comes with 500 euro owed on it.

You put your 500 euro into Paypal. Then withdraw it to your bank account (no charge as it's over 100 euro). Then use that to pay off your credit card.

Repeat each month.

Essentially you've got a loan of 500 euro which you can avoid paying back for an infinite period of time?

What am I missing?

people do that with credit cards that have 0% on balance transfers. not a good way to live but it can be done. the problem is that it starts off at 500 and then 6 months later its 3 grand

Random

So I've really missed nothing though? I know .. you have to pay back the 500 euro eventually, but I find it interesting!

Forgive me, me and the world of finance ...

FX Meister

Are you on drugs or something?

KdjaCL

Your maths intrigues me.

You use CC1 to value of 500.

You use CC2 for 500 and pay off other 500.

You use CC1 to value of 500

You use CC2 for 500 and pay off other 500.

When do you pay CC2? as its now a grand in debt.......if you switch cards well you will have the 500 bill each month


kdjac

Random

My Math? I thought I was pretty clear. (forgive me if you mean someone else)

You never clear your bill, you simply pay off your bill each month. When your statement is issued saying you owe 500 euro, you put 500 euro into paypal. Then withdraw to your bank account. Then back to your bank account. Then onto your CC. You've now paid your CC bill. Your bill for the following month will become 500 euro, and so on and so forth.

You never clear your bill obviously, but you never really pay it either.

Random

FX Meister wrote:

Are you on drugs or something?

No, I'm not. Why do you ask?

Mr. Presentable

Ah, but what's the point in having the 500.00 if all you can use it for is repaying the card?

Also, regardless of whether you pay it off in full each month, I'm pretty sure there's interest on the capital

BostonB

ciaranfo wrote:

....
Essentially you've got a loan of 500 euro which you can avoid paying back for an infinite period of time?

What am I missing?

It only works if you don't use it. Whats the point of a loan you don't use?

Wertz

A loan you don't use?

I thought of this idea a long time ago (long before I ever had a credit card)

You borrow/spend €1,000 on your CC. It comes end of the month and it's time to pay that off before it starts attracting interest.
So you get CC #2 and use that one to pay off the 1,000.
Then in the next billing period you pay off CC #2 with the renewed credit rating on CC #1.

Essentially it's just a long term interst free credit option as you will always have to pay back the inital borrowed 1,000.
In this country the bullsh*t stamp duty/levy adds on 80 quid a year....but if you had 2 cards with a relatively high limit from two different lending institutions, you could technically have very low cost credit.
Additionally, I'm not sure if CC debt dies with you, but if it did, you could put the repayment off indefinitely and have it cancel upon death.

BostonB

Wertz wrote:

A loan you don't use?

I thought of this idea a long time ago (long before I ever had a credit card)

You borrow/spend €1,000 on your CC. It comes end of the month and it's time to pay that off before it starts attracting interest.
So you get CC #2 and use that one to pay off the 1,000.
Then in the next billing period you pay off CC #2 with the renewed credit rating on CC #1.
...

What do you do with the €1000 credit?

Wertz

Spend it, drink it, roll around in it, put it up your nose....whatever you normally do with money.

Obviously someone much smarter than me in the finance sector of the major CC firms have devised a way to render any benefit from this system useless; there's probably some sort of system in place where if they see a card continually maxxing out every month and then being paid off in full they'll query the usage or suspend the account.

BostonB

Basically all you are doing is serving one loan with another. You only get to spend it once, unless you keep increasing your loan. All you end up doing is getting a huge loan that you can't pay off.

Random

BostonB wrote:

Basically all you are doing is serving one loan with another. You only get to spend it once, unless you keep increasing your loan. All you end up doing is getting a huge loan that you can't pay off.

Yeah, you can only spend it once but then you don't have to pay it back "forever".

BostonB

ciaranfo wrote:

Yeah, you can only spend it once but then you don't have to pay it back "forever".

Except for the fees x forever no of years.

Random

BostonB wrote:

Except for the fees x forever no of years.

*government stamp duty excluded already

BostonB

ciaranfo wrote:

*government stamp duty excluded already

I still don't get the point unless you want to do a DOB on it, do a runner, or pop your clogs.

Random

The only real benefit would be an interest free loan for a couple of months.. or some relief on a credit card debt you couldn't pay off right away.