So my parents got scammed last night, fraud case is open but it’s likely not gonna go anywhere and they’ll be out 10K - they know better and now they really know better, and I’m hoping to get some advice on a repayment strategy.
They absolutely don’t have that kind of money and repayment will take a while.
Plan one is just put it on the mortgage, but they’re currently locked in at a lower rate for 2 more years, so adjusting that isn’t ideal if it changes the rate. If not, adding 10K to mortgage is no brainer.
Line of credit does carry lower interests, but it will accrue daily, credit cards are high interest, but interest is racked up monthly.
Would it be possible/smart (assuming +10K credit card capacity) to move LoC debt to the credit card for 25 ish days a month to avoid daily LoC interest, and then send the debt back to LoC for 5ish days (transfer time) and have the credit card at $0 at the end of every month? No credit card interest and far less days for LoC debt to accrue interest?
Obviously there is risk in not having the credit card paid off in time, but would this strategy be viable if properly executed?
I get what you’re trying to do moving the money back and forth. I seems to me it’s awfully close to kiting - a concept my branch manager explained to me when I was 17 and thought I’d found a loop hole. Be careful; getting busted is no fun even when it’s a scolding. https://en.wikipedia.org/wiki/Check_kiting
Heh, I’d bet that many people do this, though not with checks per se.
I…err…a friend, up until last year when they changed how it worked, used to do this with the PayPal debit card. All transactions would take 3 business days to actually pull the money out of the bank account. So if you needed to pay a bill or whatever on either Tuesday, Wednesday or Thursday but you don’t get paid until Friday you could use the PayPal debit card on any of those days.
Then the bastards changed it after like 10 years so that you could only use the debit card with settled funds in the PayPal account, which made it utterly useless because that same 3 days applied to transfer money into your PayPal account so you needed to transfer money into PayPal 3 days ahead of when you wanted to use it.
What a shame though because even if you had the money in your bank account for a purchase the PP debit card was still nice to use because it offered a 1% cash back on a debit card
Ofc the whole thing was probably a scheme to get people to keep money on their PayPal account (Which you should never ever do).
@cm0002 @pubquiz kind of reminds me of the old days where some places would let you post-date a check, and they would wait until that day to deposit (a couple days usually)
Yeah, it’s pretty much the idea of kiting but without intention for scamming/lying - just hoping to take advantage of the difference in how interest is applied to debt without breaking the law.
Considering there is still risk involved (bank/CC get paid either way, and miss timing the transaction results in interest payments to them) its more of a risk tolerance approach than scam/fraud, but I don’t doubt the Bank’s diligence in protecting their assets.
Hopefully they can do a debt consolidation, and get a better rate, but with interest rates where they are I am not sure it would be much better than line of credit