How To NOT Get Caught Out By Credit Cards

Last Friday I put out a blog about the credit cards that I use. On Tuesday I put out a blog written by a Member, Sharon, who used credit cards as part of her strategy.

 

 

And I’ve received a number of comments saying ‘it doesn’t add up’, why are you promoting credit cards all of a sudden?!

 

Disclaimer alert: credit cards are dangerous and can get you in a serious ton of debt and high interest and poor credit rating if you miss a payment.

 

 

If you can’t manage your money, just don’t use them.

 

Hint: I’ve had issues with credit cards in my early 20’s. I’m cautious as hell…. In the fact that I pay them off completely every month.

 

 

 

If you’ve got a great credit history and really freaking awesome money management skills (Hi, Warren Buffet), then you could possibly use money transfer on 0% interest to buy a property. The caveat being that you will have to have enough cash to buy 100%… no mortgage lender is going to allow you to borrow the deposit and then borrow the balance.

 

If that’s your tipple…

 

(and seriously, again, if your gut is saying no to this, just don’t do it, it’s incredibly risky. When my valuation lecturer colleague read about Sharon using credit cards, he said ‘Wow, she’s done so well… but seriously I would never take that risk’. He won’t do it, you don’t have to do it, there are other ways)

 

 

…Then here’s how to NOT get caught out by credit cards:

 

 

  1. Make sure you have a direct debit to the credit card provider on a monthly basis to pay the minimum… yes even in the 0% period, make those payments and set it up when you take out the credit card
  2. ALWAYS HAVE AN EXIT WHICH COMES WAY BEFORE THE END OF THE 0% FIXED TERM – That could be a remortgage, a huge pay out which means that you can pay the credit card off or sell the property
  3. YOUR EXIT STRATEGY MUST BE IN PLACE BEFORE YOU TAKE OUT THE CREDIT CARD, you’ve got to know how to pay it back
  4. Only borrow as much as you need… do not store some in the bank and use them willy nilly, it just leads to unnecessary spending and debt you can’t pay off
  5. THIS ISN’T GET RICH QUICK, it’s still got to be a rightly timed strategy. I.e. You’ve got to buy a property at a low price, negotiate hard, work to comb through all the deals until you stumble across the property that ticks all the right boxes. Credit cards just give you that ‘cash in hand’ ability to buy quickly. If you don’t plan, strategize and stay consistent to your goal, this won’t work.
  6. I repeat you can’t just buy anything, anywhere. See number 5. The property has to be right for you.

 

Does this clarify what anything about my view on credit cards? Do you still want to take caution?

 

Let me know in the comment section below!

 

 

 

P.S. Do you need help with that strategy and making sure you buy the right property? I can work with you in the Members Club. CLICK HERE TO JOIN NOW, it’s only open for a few more days!

 

Natasha