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How to Survive Depending on Credit Card Solely
Yes you heard it, absolutely no cash is involved. You will need to have good credit rating as you reap what you sow. 有借有还,再借不难 - timely return of a loan makes it easy to borrow again.

This is not the usual habit of human beings, therefore regulations and policies are put in place for us to adhere to strictly. For example, our credit limit is about 4 times of our monthly salary and our borrowing limit is 24 times our salary.

In most of the case, credit card fees can be waived, especially if you are actively using the card. Some cards waive your fee automatically when you spend a certain limit. I thought that American Express cards that are not issued directly by the bank will usually not be waived as they are offering a cut above the rest service.

We are the swordsmen, our financial knowledge is the sword and loans is the skills to put our enemies down. If you have great financial knowledge, the banks would be happy to have you as their VIP customers. On the contrary, if you are holding a blunted dagger with broken handle, you will be classified as a high risk investor. What do they usually do to the high risk investors? A thank you and rejection letter for your loan application.

Today I am going to share with you how to use credit card balance transfer to get funds, to invest in low to no risk ventures and get yourself a sustainable monthly paycheck without affecting your personal cash flow.

What is balance transfer (BT)? It is utilising your unused credit and transfering to your designated bank account. Another word, it is converting your credit to cash. Banks usually only allow 90% to 95% of your available credit and is subjected to approval. The approving period is usually around 3 to 7 business days.

There are usually bank promotions for BT in Singapore where there will be no interest charged to the transferred amounts. This loan comes with a processing fee of between 1% to 3% and a minimum 3% monthly repayment condition. There are personal loans from various bank also offering processing fees only with fixed monthly repayment.

How is it calculated? For example you get a BT and a personal loan (PL) of $10,000 each, repayment period is 6 months with 3% processing fee:

BT 1st month payment : 3% of $10,000 (processing fee) + 3% of $10,000 (subsequent minimum repayment) = $600
BT 2nd month payment : 3% of $9,700 (depreciating loan) = $291
BT 3rd month payment : 3% of $9,409 = $282.27
BT 4th month payment : 3% of $9,126.37 = $273.80
BT 5th month payment : 3% of $8,852.93 = $265.59
BT last month payment : $8,587.34

PL 1st month payment : $10,000 / 6 + 3% of $10,000 = $1,966.67
PL 2nd month payment : $1,666.67
PL 3rd month payment : $1,666.67
PL 4th month payment : $1,666.67
PL 5th month payment : $1,666.67
PL last month payment : $1,666.65

The difference between BT and PL is the repayment model; if cash flow is on your side, there will be more ways to generate cash through your credit.

So now you are equipped with basic knowledge on bank credits. Let us have a quick walk-
through on the BT and PL rates of all the banks in Singapore that offer credit cards (correct at the time of posting).

[Image: BT_PL_rates.png]
Table showing updated rates for BT and PL for all issuing banks in Singapore. Rates may change over time.

The next question is what are you going to do with the cash from BT or PL?

There can be used for various sources especially secured investments. Secured investment is something you can get back your money with assurance. Not a lot of brokerage offer that, but there will always be some entity give your returns with no risk to your principal.

I have invested in a few companies with fixed income return but I am not promoting them.

Never put all eggs in one basket, we saw all kinds of outcomes before. The average returns as we can see here is around 5%, which is a sustainable amount for moderate funds. If your credit limit is able to generate a 100k worth of BT and PL, you will get a $5,000 additional cash monthly.

Lets take a look at my portfolio and the format I use to keep track of all my investments.
[Image: Sample_BT_PL_Template.png]
Keep track of your card expiry (for wavier), limit (for loaning amount) and rates (to ensure your investments yield more than it). Dr is debit, Pm is payment and Cm is commission.

Some final tips:
  • Do not use the same card for BT and spending. It will be confusing to keep track both of your cards. The minimum payment will be affected by the spending and you will have to tabulate yourself, fail to do so will result in interest charged. Some bank will immediately incur interest for spending on BT account..
  • Do not default your payment, if extension is needed call the bank for assistance. Defaulting your loan will result in black marks in your credit bureau and other credit report agency. EIR, in long effective interest rate, is the interest bank charge for amount not paid.
  • Always read the fine print before agreeing to any agreement(s), one good example will be performance interest and variable interest. Some loans may be adjusted based on the bank's performance and other factors. Always check with you banker if in doubt.
  • Have an online banking account for all your cards. Every bank in Singapore that offer credit card have online banking portal. This is especially useful to keep track of your credit limit, next repayment and credit left. Not all banks have 24/7 service.
Australia and New Zealand Banking Group
[Image: anz.png]
Bank of China 
[Image: boc.png]
Commerce International Merchant Bankers Berhad 
[Image: cimb.png]
Citibank Singapore 
[Image: citibank.png]
Development Bank of Singapore (Post Office Savings Bank) 
[Image: dbs.png]
Hongkong and Shanghai Banking Corporation 
[Image: hsbc.png]
Malayan Banking 
[Image: maybank.png]
Standard Chartered 
[Image: image.png]
United Overseas Bank 
[Image: uob.png]
This is so cool. Why I never thought about that before!
This is so cool man...!! Awsom.
Good thought man..!!
(11-10-2016, 10:45 AM)Melvin Wrote: This is so cool. Why I never thought about that before!

Me too Melvin....!!!
Good luck on that, you may soon post about your bankruptcy procedures.

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