how many credit cards do you have?

Daddy_Bear_2

monkeysnail wrote:

Smilie, try to go to the property forum instead. YOu might be able to get more help from there as a lot of them support what we do.

A lot of posts on this thread are not helpful, they're just nasty.

I hope I can help, but we're in the same dilemma.

monkeysnail - you are hilarious. You've come to a forum asking how to borrow £50K on credit cards to buy another property at the peak of one of the largest asset bubbles ever seen in history and label the shocked replies as 'nasty'.

In 2,3,5 years time, or whenever it happens please remember the time you posted on this site as you hand over the keys.

smilie

Daddybear,

Who says interest rates will go up? We live in a very different world today with the growing power of China and other countries like India. Prices are falling (obvious exception being oil), which will mean over the medium term at least interest rates and inflation will remain low. It is because of this new change in circumstances that has led to the global increase in property prices because debt is so cheap.

I think there is nothing wrong with raising debt on credit cards - the debt is unsecured, and very flexible, and it is a very competitive industry, so there is always a good deal going somewhere. I worked out last night how much interest (and balance transfer fees) I will have paid on credit card debt over the past 12 months on about 36-37k of credit card debt. It comes to just 2.2%. What would it have been if I had done this from a loan?

Daddy_Bear_2

smilie wrote:

Daddybear,

Who says interest rates will go up? We live in a very different world today with the growing power of China and other countries like India. Prices are falling (obvious exception being oil), which will mean over the medium term at least interest rates and inflation will remain low. It is because of this new change in circumstances that has led to the global increase in property prices because debt is so cheap.

I think there is nothing wrong with raising debt on credit cards - the debt is unsecured, and very flexible, and it is a very competitive industry, so there is always a good deal going somewhere. I worked out last night how much interest (and balance transfer fees) I will have paid on credit card debt over the past 12 months on about 36-37k of credit card debt. It comes to just 2.2%. What would it have been if I had done this from a loan?

I don't pretend to know what interest rates are going to do but surely if you are loading up the kind of debt that monkeysnail is (and perhaps yourself?) then it would only be wise to factor in a scenario where IRs could at least return to their longterm average (6%-7%). That would just be common sense to me. Unfortunately a lot of people seem to be devoid of common sense and appear to have taken on debt as though 4.75% is the highest IRs will ever go. IRs maybe 4.5% today but absolutely nobody knows what they could be in 2, 5 or 10 years time and the debt you take on today is unlikely to have been eroded much by inflation in that time. I think that the signals coming from the BoE lately are very hawkish, i.e The Governor practically said they will be looking to control inflation and the tool they have for doing this - raising IRs.

Inflation has practically doubled in 12 months, there is nothing to say that it won't do the same again in the next 12 months. If we had inflation at even 4% where do you think IRs would have to go. Answer: at least 6% and possibly higher. Not impossible, US inflation has just hit 4.75%

The China affect is the main reason why inflation has been so low and this allowed IRs to be reduced to the current historic lows. However this China affect is unlikely to go on forever and there are lots of other factors that affect inflation. For example, all those cheap chinese goods still have to be shipped here and those costs due to oil prices are higher so it is not fact that imported chinese goods will continue to get cheaper and cheaper.

charlieboycat

monkeysnail wrote:

Also, I am an accountant, ...

Chartered? Or certified?