detroit, macomb · Member since 2018 · 84 posts · 42 votes
Hello is it possible to sell something online and use a credit card to buy that item for myself and then use that cash to transfer into my bank to buy a house? Because i have 20k credit limit and would like to turn it all into cash Because i cannot qualify for any bank loans and hard money loan is my last option..thanks
Investor · NJ · Member since 2018 · 869 posts · 921 votes
7y
Don't do that it sounds like a horrible financial move. Work on your personal finance. Setup a monthly budget for yourself and save as much as you can. Keep on saving and continue educating yourself further.
Maxing out your credit cards won't help you secure a mortgage. It will help put you in worse financial shape. Also let's say you found a house for 20k and maxed out your cards. Credit cards are one of the most expensive ways to borrow money interest wise. What happens when you need 20k-40k additional to rehab the place??
Why can't you qualify for a loan at a bank? Have you tried for a FHA type mortgage?
Um i dont think anyone here understands the questions but i will try anyways thanks....
Try rephrasing the question. It sounds like you either want to buy something online and somehow transfer that to your bank account or you want to sell something of yours, buy it and transfer the money from the sale to your credit card.
detroit, macomb · Member since 2018 · 84 posts · 42 votes
7y
there are many diffrent ways but a good example would be call my card company and tell them i will be making a large purchase then go on ebay. List an item for sale for 18000$ create a diffrent account purchase that item for 18k then use the account i sold the item to transfer the money in to my bank account in the form of cash.....
Tacoma, WA · Member since 2019 · 23 posts · 21 votes
7y
@Frankie Betancourt wouldn’t it be easier to just take a cash advance on the credit card? All of the cards I have offer cash advances as an option. The interest rate might be higher on a cash advance so I would recommend you factor those numbers into your house buying pros and cons.
Also, you might want to review the fine print on eBay. Selling something to yourself might violate their rules.
there are many diffrent ways but a good example would be call my card company and tell them i will be making a large purchase then go on ebay. List an item for sale for 18000$ create a diffrent account purchase that item for 18k then use the account i sold the item to transfer the money in to my bank account in the form of cash.....
Sounds like you are basically trying to get a cash advance on your credit card without paying interest. You'd still have to pay the balance on your credit card albeit you could take a while and pay the interest.
Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
7y
Usually the cash advance amount allowed is considerably less than the credit limit for a particular card. Question is, how do you intend to pay the bill when you accomplish your goal of charging $20,000 onto your credit card? Don't forget you'll also have to pay the merchant side of the transaction which will be a few percent.
I think this is a very sketchy scenario and would strongly discourage it as a way to buy a property. Live well under your means and save some cash.
As John said, I'd add up the cost of doing it this way. You will have transaction fees from the company you list it with, then interest fees and you will have to pay it back. I'd just save some money. Find a way to increase your income.
Investor · NJ · Member since 2018 · 869 posts · 921 votes
7y
Don't do that it sounds like a horrible financial move. Work on your personal finance. Setup a monthly budget for yourself and save as much as you can. Keep on saving and continue educating yourself further.
Maxing out your credit cards won't help you secure a mortgage. It will help put you in worse financial shape. Also let's say you found a house for 20k and maxed out your cards. Credit cards are one of the most expensive ways to borrow money interest wise. What happens when you need 20k-40k additional to rehab the place??
Why can't you qualify for a loan at a bank? Have you tried for a FHA type mortgage?
Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes
7y
Lots of people do this with 0 APR cards for the rehab cost. Sure I guess if you had really cheap houses could buy it with a card but the whole point is that you refinance before the 0 APR promotion is over otherwise you would have a horribly high rate mortgage. I had a client fund $50k rehab mainly off cards. If you have good credit there are lots of cards that give 0 APR.
You can then transfer the money through PayPal or various sites for 2-3% fee. Sometimes get 1% cash back and it comes out not much.
Rental Property Investor · Atlanta, GA · Member since 2015 · 26 posts · 12 votes
7y
There are multiple problems with this idea. You will owe eBay a % fee on a $18,000 sale, and PayPal a % fee as well. In addition, PayPal is known to freeze money on accounts they believe may be involved in fraudulent activity. There is a high probability you might have your money frozen and have to jump through fire hoops to get it released. In the meantime you will be paying minimum payments of around $360 a month. Hopefully this would be to a 0% interest promo card or things will spiral out of control quickly. Depending on what card and financial intuition you may be able to call the bank and request convenience checks for the card. Some institutions treat convenience checks as cash advances, some don’t. You might also be able to balance transfer the money directly into your checking account. Research properly.
Investor · Cleveland, OH · Member since 2017 · 319 posts · 330 votes
7y
This idea seems like its purpose is to disguise a cash advance as a purchase to get better terms from the credit card company.. It sounds like a creative solution, but it probably qualifies as fraud.
Rental Property Investor · San Diego, CA · Member since 2017 · 439 posts · 578 votes
7y
Could you do it? Absolutely.
Is it a good idea? Probably not.
If you’ve ran all the scenarios and think you’re gonna come out on top.... pull the trigger. But most likely that 20k you’re trying to get a hold of is going to end up costing you a lot more!
@Frankie Betancourt there is better options to get that cash. this way your going to pay a crazy high interest rate. A personal line of credit could get you the same cash for 1/4 the interest, assuming you have decent credit. If you don't have good enough credit for that your trying to go to big to fast, and will see what makes people fail imo.
Rental Property Investor · Las Vegas · Member since 2018 · 2 posts · 4 votes
7y
@Frankie Betancourt people who churn credit cards for points do this all the time, you buy grocery store pre paid visa gift cards and use the gift cards to buy money orders. It's still not something I would recommend. You need to calculate all the fees involved and see if it's worth it. If you do this, be careful and do a lot of research, it's not always as straight forward as it sounds.
well after reading all the reviews carefully i have decided not to go this route and just go with a hard money loan thanks for All the replies!.
Hard money will cost ya.....you just need to do it easier way.
Never do cash advances - it’s too expensive money.
When you have FICO higher than 730-740, the bank will mail you checks with 0% for 12-15 months and upfront fees 3%.
So, you can use these money for 3% or les whole year.
To get this repeating, you'll need 5-6 credit cards and by the time first one go off 0%, you might need HELOC or another form of credit line.
Since you've got $20K limit, chances are you know how to play the game. Just build solid base of credit lines for $20-25K each and use it as your own HML.
Your creative idea has quite few problems, most of which were stated here. Also, if you sell something for $18K you have to show that you bought it for $18K, otherwise you have to pay tax on short term capital gain (whole amount is taxable if you don’t have proof of buying the merchandise).
I bought most of my houses on credit cards but Thera 20+ of them and not all of them offer these checks with 0%.
Business credit cards are better but you have to build that credit as well (based on EIN not your SSN)
First off you have to create a system to support all “what if” and don’t just jump in hot water and deal with what happens later