All Topics / Finance / Credit Card To Pay Back Loan?

Viewing 12 posts - 1 through 12 (of 12 total)
  • Profile photo of WadesansomWadesansom
    Member
    @wadesansom
    Join Date: 2012
    Post Count: 14

    Hi, I have an IP, I do NOT have a credit card.

    However, I recently have wanted to get a credit card, with the only intention to get rewards, that being that I will pay back all my purchases before the 44 days to not incur any interest. I will only buy things I have the money for, but just use the credit card to buy them for the rewards.

    I receive my rent through direct debit from my property manager, the bank in which I have my loan with then direct debits the loan repayment from the same account I receive the rent.

    What I want to do, is to make the credit card the middle man, where the property manager gives my normal bank account the rent money, I then pay the bank (can I direct debit with a credit card?) the loan repayment, then pay the credit card loan off with the rent money I receive.

    I have absolutely no experience with credit cards so I am not sure if I can even do this, is this a good idea? why/why not? And if I can, is the bank able to direct debit the loan from my credit card account?

    Thanks! :)

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    That would be classed as a cash advance which would not give you any points or interest free period – and probably higher interest rates too.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Would be nice though – I'd be taking a few more holidays each year on behalf of my good friend VISA.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of WadesansomWadesansom
    Member
    @wadesansom
    Join Date: 2012
    Post Count: 14

    I don’t understand, why is it a cash advance if I am paying a bill with it?

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Banks don't accept credit cards for loan repayments.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of WadesansomWadesansom
    Member
    @wadesansom
    Join Date: 2012
    Post Count: 14

    I see, well there goes that brilliant scheme.

    Are there any nice tricks to use a credit card with an investment property?

    Thanks

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Just pay all the bills such as rates, insurance, water etc. Don't let your property manager pay them for you!

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of WadesansomWadesansom
    Member
    @wadesansom
    Join Date: 2012
    Post Count: 14

    Ok cool, thanks mate.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Did someone mention Credit Card and holidays.

    I think my wife has just maxed out one of my CC here in Whistler, Canada so thankfully we are coming home Sunday night.

    As the boys said above just because you believe you have purchased below market value convincing the lenders valuer is a different matter. Also many lenders wont do a full valuation and run off their internal valuation which could even show a figure of less than you paid for it.

    All depends in the lender.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    0-40 Properties in a decade with an unencumbered value of over $35M. Email for a copy of my API article

    Profile photo of Pat007Pat007
    Member
    @pat007
    Join Date: 2012
    Post Count: 71

    On a related note, if used for an investment type purchase is the debt interest on a credit card claimable against Tax in Australia ?

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    Pat007 wrote:
    On a related note, if used for an investment type purchase is the debt interest on a credit card claimable against Tax in Australia ?

    In Australia if you borrow for investment or business related purposes the interest is generally deductible. This includes credit card interest.

    But with a credit card often there will be a mixture of purchases so you may have to apportion any interest claimed.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of a_d_r_i_a_na_d_r_i_a_n
    Participant
    @a_d_r_i_a_n
    Join Date: 2011
    Post Count: 19

    I thought of this idea sometime ago aswell, and was greatly disappointed to find out it wouldnt work

    The big items like your insurances (LL and Building) / Reno costs are payed by CC, you can rank a few thousand just there.

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