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If you go at it right, and spend about 1k per year, in a couple of years, you can have 20 credit cards, with a 10k on each one. That credit can be accessed by using the cards to buy gold coins, then selling the coins as you need the money. So it can pay for medical costs, legal costs, all sorts of goodies. If you are careful about which ones you apply for/keep, the annual fees are low. Just because you have a card does not mean that you have to use it and it certainly does not mean that you have to carry a debt over the end of the month! Pay off the balance due and the 24% interest is not an issue.
You never know when bad things are going to happen. 1k a year is a ridiculously low "premium" to have so much "generic" insurance. You are welcome.
1k a year is a ridiculously low "premium" to have so much "generic" insurance.
You could call those lines of credit "insurance" or you could call is "rope" that you might hang yourself with, if you happen run into financial problems like losing your job, medical bills, etc.
Not sure if the OP is serious or not. I do think it's good to build credit and I recommend people start as early as possible.
Of course you will want to pay off the cards in full each month.
It's not a bad idea to to have large amounts accessible credit for emergencies that's true...but of course it's good to have many months expenses in an emergency fund.
Too many people living paycheck to paycheck and something as common as a car breaking down can destroy them financially.
I have a ton of credit, always thought it was a good idea. I wouldn't buy gold with it though because A) I'd still have to make CC payment because it's not like paying cash for gold is it? and B) it's hard to just up and sell gold "if you get sick" and C) I don't want to store it.
OK. You are going to borrow money to buy gold coins. So how are you going to pay back the credit card? Are you planning to just walk away (be a dead beat?)
If you have the money to pay the card off each month, then you don't really need that credit to buy gold.
Are you borrowing the money to buy gold and then taking your gold buying money to pay off the card each month? Well, I guess you could establish a lit of lines of credit. I don't know what for. If you are paying it off every month, you don't need all that credit. What are you going to use 20 credit cards for?
With 20 open credit cards, your credit score is going to suffer. A good credit score is useful for a lot of things: renting, buying, the cost of your insurance, etc.
Keep in mind that if you buy all your gold with a credit card, then there is a lot of record all over the place about how much gold you have.
Adding a note here: If you can't get a credit card of less than 24%, you have a really crappy credit score. People with good credit are paying 9% or less and no annual fees for their credit cards.
Coin and gold dealers never accept credit cards. The buy-sell margin is too thin, and would be eaten up by credit card transaction fees.
You'd have to use the credit cards to get cash advances to buy gold, and then pay high interest rates on cash advances, you get the end-of-billing-cycle grace period only on purchases, not on cash advance.
You'd have to resell your gold in less than a month, in order to pay off your credit card balance before charges accrue. Gold would have to go up 1.5% in that month for you to break even, even at the best rate you can get for a gold pool account, without taking physical possession. At this moment, gold pool is $1375 in and $1354 out. Both figures are down $22 from what they were at this time yesterday, so if you had bought yesterday at $1397, you'd be selling today at a loss of $42 an ounce.
The only way the OP's idea would work would be a defense against a personal disaster. If you had 20 cards with $10K limits, that is probably $5K on cash advance, so you could grab a quick $100K and head for the airport for an international flight and don't look back.
If you don't use your credit card for about two years, it will not be renewed at expiration date, so you'd have to use every card a couple times every year, to keep them current.
Last edited by jtur88; 09-10-2013 at 01:14 PM..
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