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
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?
@Frankie Betancourt why would you do this? You can do it, it's just silly because you will now owe income tax on that income. If you're trying to earn points and miles on credit cards, Google "manufactured spending".
Contact your credit card company, and tell them you want to do a BALANCE TRANSFER to yourself, to pay off some things. A lot of them will give you 0% for a year and it's only 3-5% fee upfront, and they will transfer you the cash to your checking out. Not all cards will do this, but some will.
There are other ways too, check out Lending Club.com, or Prosper.com for a personal loan. Either way it's 100% your personal liability, so don't jump in unless you know you can swim and how/when to exit.
As others have said this is not a good idea due to the high interest rate you will be paying as well as it may be fraud...
Even if you took a cash advance on your CC to get the money and decided to use it as a Down payment it would still hit you credit and effect your income equation. (I know this wasn't your plan) But to do what your saying I believe you would be violating one of those companies codes of conducts / policies.
Either way you try to make it work I would highly steer away from this idea.
Judging from your account photo you look young. From your post, you sound young and reckless which is a bad combo. You will lose $20k like it's water thru your fingers. If your serious and want to learn go to your local REIA meetings and meet some experienced investors who make offer to mentor or guide you in the beginning of your journey. Ask to work with someone who knows what they are doing and has proof of it.
Your lack of cash, liquid money is motivating and will drive you to spend some “Free” time in education. Good luck
Sounds like you want to do a balance transfer. I've done that before to fund a rehab. I deposited $20k into my bank account and just paid "cash" for the rehab. I simply had to request a check from my credit card issuer. It was 0% per month and a one time fee of 3%.
@Frankie Betancourt try calling the credit card company and have them send you credit checks. Deposit one of those in your business banking account and there ya go. I receive a lot right not for o interest for a year.
@Frankie Betancourt Frankie I don’t know if that is possible but, you can use bank checks the once’s that send you in the mail , open a business account and deposit them there and bang! take the money out, I am not expert but I see many people doing this to buy real state , the interest rate is big!!!!! Watch out!!! JUST SAVE THE MONEY DONT GET TO CREATIVE SPECIALLY THE WAY YOU ATE DOING IT.
@Frankie Betancourt I have done just this! I needed to pay my drywaller $3k, needed to put it on my 0% APR credit card but he only took cash!
So I venmoed my wife $3k with our credit card and in a couple of days we had cash in our account. I did this with about $10k. Here’s the problem though, you end up paying a 3% fee to use that credit card.
However 3% might be worth it if you have 18 months to pay off your 0%APR Credit card.
Don’t think about purchasing real estate this way though, as banks and lenders WILL inquire about the debt and will most likely make you pay it off before purchasing a home.
@Frankie Betancourt I haven’t seen all the responses so maybe someone already provided same response, but doesn’t EBay or other places charge 10% fee? Also if the buyer used credit card to Purchase, there is another fee that gets incurred. If you account for all the fees, it might be cheaper to do the hard money loan.
@Frankie Betancourt I have used a credit card to send money through paypal before to turn it into "cash", I don't neccessarily reccommend this, but if you have no better choice there's a fee of 2.9% to do so.
@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.
I do this very thing all the time. And before someone chimes in; no it's not illegal, but it is frowned upon by credit card companies. It's kind of like counting cards in Vegas.
For example, the Ink CC from Chase bank offers 5% cashback at office supply stores (max 25k per year), which means that If I stop by Staples on my way home from work and buy 8k worth of Vanilla Gift Cards ($500 per gift card max), I will pay about $96 in activation fees, and another 8 bucks converting those gift cards back into cash by using them to buy eight different money orders at 1k each naming myself as the recipient of the money order. Then simply deposit the money orders into your bank and pay off the credit card. In total its $108 in fees, but you collect $400 in cashback rewards at 5% for a net of $292... Not bad for 20 minutes worth of work.
I also have about 4 million frequent flyer miles from a handful of years ago when the government was trying to convert people into using the $1 coin instead of paper money. They had an incentive program where you could buy the coins online at face value using a credit card and pay no shipping fee. There was no limit to the number of coins it let you buy and they would arrive in about a week at my house. After a few test runs with smaller purchases and slowly scaling up, I was maxing out my cards and buying almost 250k worth of coins per week, and having my cop friend escort me to the bank as I dropped off case after case of coins to Wells Fargo (I hate Wells Fargo, so it was poetic justice that they would get stuck with all of these coins). That's 250k airline miles every single week, and the average international round trip flight is only about 60k points. Not all of my CC's are airline miles cards, but if you had used a typical 2% generic cashback card then that would be about $5,000 in cashback every week on a 250k purchase. Needless to say they shut down that program after they realized people were buying in bulk and costing the federal government the 3% processing fee that credit card companies charge to handle the transaction.
I don't live in a cheap enough market, but if I did then you better believe I would use the gift card / money order combo to purchase a house for under 100k, and then continually transfer the CC balances to zero APR promo cards. Unfortunately there aren't enough cards that offer a promo like that to be able to purchase something in my area due to higher price points.
Until I recently moved, I used to go to church with someone who could have been on TLC's now defunct TV show Extreme Couponing. This lady could walk into a grocery store and buy $1000 worth of products and only spend 30 bucks. At first I asked her if I paid the costs, if she would be willing to buy enough products to actually open our own store as a joint venture. She declined that offer, but then I offered to buy as much as she could gather, with the understanding that 100% of it would be donated to charity and she happily accepted. For tax purposes, if you donate $1000 worth of product that you only paid 30 bucks for, you only get to claim a $30 deduction. But if you have a storage system, and separate your purchases into piles by the month that you purchased it, and hold onto those products for at least one year before donating them, they become long term capital gains items and you can donate them for fair market value, which is the full $1000 plus one years worth of inflation. Not only was I able to contribute tens of thousands of dollars worth of items to charity, but I received massive tax benefits at a fraction of the cost. Not surprisingly this drew the IRS's attention and I was audited, with everything working out just fine.
The bottom line isn't to advocate using credit cards, in fact you can severely destroy your financial situation if you don't know what you're doing with CC's. My point is that there are PLENTY of creative things that can be taken advantage of if you take the time to research ideas and learn to think creatively. Bigger Pockets loves the idea of house hacking, I enjoy trying to hack every aspect of my financial life. It's almost like a game to me. The more time you spend trying to think outside the box, the more opportunities you will find that have been staring you in the face this whole time.
Just make sure that whatever you do, make sure you know the rules inside and out and have a plan. Otherwise you may find yourself diving head first into an empty swimming pool.
@Frankie Betancourt Why not just use one of the balance transfer check to deposit into your checking account, that way you only pay the 3% or 4% transfer fee. If you do it on eBay between eBay and PayPal you will pay over 10%! Go online to your credit card and go under balance transfer options, they will give you an option to just have the money put in your account.
From my understanding, you want to turn "plastic" into real cash.
I believe everything is possible under the sun.
you will still end up owing someone.
so evaluate all currents and possible methods of owing someone and draw a conclusion ( which one is legal? Which one is cheaper? Which one can I afford? Which one is less time consuming?...)
I heard about
1. balance transfert where you call the cc compagnie and they put money into your account.
2. Borrowing from your whole life insurance (5% simple interest if you have a good company)
3. Line of credit where the bank deposit cash into your account.
Your suggestion is very creative, but is it the best or can you do better another way?
From my understanding, you want to turn "plastic" into real cash.
I believe everything is possible under the sun.
you will still end up owing someone.
so evaluate all currents and possible methods of owing someone and draw a conclusion ( which one is legal? Which one is cheaper? Which one can I afford? Which one is less time consuming?...)
I heard about
1. balance transfert where you call the cc compagnie and they put money into your account.
2. Borrowing from your whole life insurance (5% simple interest if you have a good company)
3. Line of credit where the bank deposit cash into your account.
Your suggestion is very creative, but is it the best or can you do better another way?
You can use the PayPal credit card reader . Swipe your credit card and the funds will be available in your PayPal account which you can then transfer into your bank account . PayPal will charge a transaction fee of somewhere around 2.5%, however.