Credit Card Purchases

[Sean Ade]

I'm hoping someone can shed some light on this idea.

I always get new mail or advertisements on credit cards that offer up to 12-18 months with no interest payments. My thought is to use this to make a down payment on my first property with a 3.5% payment. Lets say $10,000, with a full year of minimal CC payments and no interest. 

Then a few months before interest kicks in, apply for a 2nd card with similar terms, pay off the first card, and give myself a few more months of no interest.

This way, I potentially can get 18-24 months interest free. In this time, I can make repairs to the property and build the equity and use this to buy a 2nd property with a credit line. Turn the first home completely into rentals. 

My thought is by the time the interest payments begin on the initial 10K investment I took out (roughly two years) I will have either enough equity or cash flow from 2 different properties to offset any of the costs. And then continue to grow from there.

Is this a crazy thought or is there any legitimacy with this idea?

[Craig Jeppesen]

It might work, but I would have a backup plan to mitigate the credit risk. First make sure your lender is fine with it, and it doesn’t hurt your dti ratio. I have seen many people who were qualified for a mortgage and last minute buy a car or a boat and suddenly are not able to get a mortgage. Second if you want to use $10k make sure you get a $20-30 k limit so your credit score is not affected too bad. Third never be late on your payments or they will charge you late fees and start charging you 30% in interest. Personally it is too risky for me but I am pretty conservative. I do use a cc to lower my carry costs. First, I buy my materials at Lowe’s for example on my pro account, I then pay for it with my cc 30 days later, and then pay my cc off in 30 days. I just got 60 days no interest, and I increase my cc rewards which I use to buy materials later.