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What Percent Investment liquidate payoff CC Debt?
Cougar1978
Posts: 7,645 ✭✭✭✭✭
At recent club meeting many discussing liquidating part or all numismatic investment pay off credit card debt some with rates as high as 27 pct.
Driving this is summer slow season and concern over the market. Many devastated by Houston Oil Crash plus age bias in job search have still not recovered.
My take / advice downsize to 60 slabs (like roster of football team). Then review.
So Cali Area - Coins & Currency
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I try to pay all my CC off by the end of ea month if I used them. But Yes I try to pay them off as soon possible it is best even if you need to sell off some coins. But I would pick the ones that I know I can always buy back when I get more $$$$.
Hoard the keys.
If I had credit card debt with that kind of rate, I would have done been sold the coins
If you are paying interest of 27% on your credit card debt you have no business buying coins or any other collectible. Sell, sell, sell!
Always think in terms of "the Rule of 72".
Unfortunately, most Americans, including those considered well educated, have a very low level of economic knowledge. Newspaper columns and TV shows that offer basic help are not read/viewed by most. Carrying credit card debt is, next to pay-day loans, one of the most foolish things a person can do with their money.
I have worked in finance for 26 years. People get comfortable using credit as a substitute for cash. Many have a pattern of addiction to the plastic. Eventually people realize "what have I done"? By that point it's either sell things in order to pay it back or file bankruptcy(in extreme situations). I would guess many of the people you are talking about have not just been buying coins on the cards, but if they have an addictive behavior it may carry over to their coin life as well.
Frankly, I know many "baby boomers" who could NOT clear up credit card debt until they received inheritances.
The trouble with that is that you have to stop spending, or the balance of your inheritance will slip away too.
Any credit card balance is too much, pay it off!
You can always get more coins
BHNC #203
If I ever use my CC's it's with the understanding that I have a plan to pay them off within a reasonable length of time. If I am not able to do as I think, then it's time to sell whatever is needed to pay them off in full.
Debt is the reasons that gov'ts collapse, people divorce, jobs are lost and people fall into drug use.
Stay away from debt at all cost.
bob
Yes, I have seen many times when green cash money was darned scarce, but I can't recall when you couldn't buy an old coin.
agreed, and to maintain good credit scores you should never go over 20-30% of the credit limit altogether.
regardless 27% is insane.
>
100%.
Investments come after debt with the exception of debt obtained for something that has enduring and/or increasing value OR saves you from losing more in the long run. Think education (sensibly), home (sensibly...and this is not 'an investment property), and even a car (sensibly, and in the right situation--namely only a loan for transportation that will allow you employment or educational opportunities...not for the luxury badge, luxury comes when you can pay out of pocket). The only other exception would be an investment that gets you a match, like a 401K and by not making the investment you lose the match.
Debt is necessary and useful sometimes (emergency plane ticket to visit a dying relative for example)...but not for luxury items. Unless you are a pro, then this is a hobby. Your coins are not an 'investment', just a nice hobby that may not lose you as much money as a shoe or golf club hobby. Or, maybe it will.
My Credit cards float the dept. for only one month. And I never use them for collectables.
The same question can be applied to selling stocks to pay off cc bills. I recently sold some to pay off a cc which had a promotional rate of 0% for 24 months that ended and those stocks cant earn more (after tax) than whatever the interest rate is now but they obviously could at 0%.
The way I look at it is, IF i have debt, it better be at a lower interest rate than my brokerage account is averaging (i.e. home loan, car loan). Or, if you think your coins are appreciating at a rate above the cc interest rate then you may be better off keeping the coins. I just doubt that is the case.
I think that I agree with all of the above
Successful transactions with : MICHAELDIXON, Manorcourtman, Bochiman, bolivarshagnasty, AUandAG, onlyroosies, chumley, Weiss, jdimmick, BAJJERFAN, gene1978, TJM965, Smittys, GRANDAM, JTHawaii, mainejoe, softparade, derryb
Bad transactions with : nobody to date
Personally, I think you should liquidate everything it takes to get the CC debt to zero...or at least any CC debt that is financed at higher than 0%. You will never catch up with coins that are in a somewhat flat market against debt increasing at a COMPOUNDED 20+% annually.
There are very few coins that can't be reacquired at a later date. Most coins of a type can be reacquired with a phone call and 10 minutes notice.
I would also add that there are VERY FEW numismatic "investments".
The only "investments" that should come before credit card debt are contributions to retirement plans and your home. Coin money should only come from funds that you can afford to lose.
But what if my coins appreciate at greater than 27%
The only debt I will take on is medical. That is usually interest free. I would never buy a coin or bullion until debt is paid in full. I can only speak as a collector. It may be different if you are in the coin or bullion business. I have seen a lot of "intelligent" people ruined by debt.
Debt=Slavery So pay off the CC with whatever you can. 27% is insanity and in my opinion shouldn't even be legal.
I use my 2% cash back credit card on everything I can, including bills and coins and bullion. It gets paid off at the end of the month religiously and I get cash rewards for just using the card. I have accrued $400 in cash back rewards this year so far.
@Cougar1978 You should have your coin club read the book "Rich Dad, Poor Dad"...
I would sell as many as needed to pay off ALL the credit card debt. If you have more debt than value in coins, well, you don't need to have any coins right now.
I wish the banks paid 27 percent interest, definitely would not be buying coins, every penny would go into cd's
I wouldn't want a CC with that kind of interest.
No worries there. It may not be anything like 27%, but I understand savings accounts can pay you robustly, up to fractions of less than 1% nowadays!
Then you're not doing it right...
Just kidding... 
In one year, after taxes (YES these too) and any selling costs have been included? Be more realistic. It is possible, but improbable.
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]
Perhaps that was said in jest.
If not, I would love to learn of his methodology.
Successful transactions with : MICHAELDIXON, Manorcourtman, Bochiman, bolivarshagnasty, AUandAG, onlyroosies, chumley, Weiss, jdimmick, BAJJERFAN, gene1978, TJM965, Smittys, GRANDAM, JTHawaii, mainejoe, softparade, derryb
Bad transactions with : nobody to date
I just dumped a bunch of generic US gold at a loss to free up cash. I'm still holding what I bought cheap, and will continue to wait for the economy to collapse...thank you Doug Casey.
I do the same I get around $270 a month in gift cards every month with the points, I go out to dinner, give out as gifts, just keep them if needed I have them for free. I was going to pay for it anyway with cash or ck so I'll just pay it at the end of the moth. But with my kind of work I can do it. It's very easy for me to do.
Hoard the keys.
Is an investment paying a better return than the cost of a debt? If not, sell the investment to pay off the debt.
Give Me Liberty or Give Me Debt
Seems there is a much larger problem here yet to be addressed... Spending habits and actual needs verse wants... And then there is keeping up with the Jones which is an impossible task. Sad reality is some of these collectors will sell their collection without a financial plan which involves living within your means. Without a reduction in spending and making fundamental changes, selling coins to reduce debt is only a temporary fix. Again... This seems to be about instant gratification without consideration of longer term financial consequences.
Experience the World through Numismatics...it's more than you can imagine.
Interesting, used my credit card once about 3 yrs. ago !!!
Right now I’m carrying about 2% of my yearly income on a credit card to finance a one-time bucket list activity with a family member who will probably not be around too much longer.
It’s driving me crazy even though it will be cleared up in a month or so.
One of my rules is no bullion or coins if I’m carrying consumer debt...... so right now, I don’t even check auction sites or read dealers’ emails. Life ebbs and flows. No big deal.
Even accepting a card at 27% is criminal one one side and moronic on the other. How dumb have you got to be?
Credit card debt is like STDs, nobody ever claims to have any but there sure are a lot of clinics around.
11.5$ Southern Dollars, The little “Big Easy” set
So I’m gathering from the aggregate reply here that running up lots of collectibles CC debt is bad? Oh man, I gotta rethink!
Once upon a time, one of my buddies built a great vintage toy collection, wound up in CC debt. Sold it all and started over.....
With his new ward won experience, he built an even better collection without CC that he actually owns.
Screw credit cards. Its that pesky PayPal Credit debt over multiple accounts that's a killer. And they dont even help your credit score
Yes, definitely a joke. The only methods I know to get 27% annual returns with coins involve breaking laws.
No it doesn't help, but the hard check adversely affects your score!
With how many 0% no fee balance transfer offers there are available, I can't imagine why someone carrying a balance would continue to pay that type of interest.
Most don't do it by choice. Usually the 0% cards require a FICO score of at least 720. Most of them probably don't have that. Another reason to pay down the CC debt ... as the debt ratio to credit limit ratio drops, the FICO score will increase so the person can qualify for the 0% cards.
Those coins are on the cover of auction catalogs, and some of those actually lose money in the short run. Think 1894-S Dime.
Not only funny but sooooo true. I carry credit card debt frequently, nowhere near 27% but not as low as I’d like. I own my own business and do well but often get strung out on being paid up to 90 days, just the way contracts of my business are written and no way around it. I often use credit to unsure I have cash flow for payroll. It gets tricky at times but always gets paid down. The crash of ‘08 was tough for a few years and debt got close to out of hand. These days it’s under control but like herpes it’s alwsys lurking and flairs up once in awhile
The aggregate national credit card debt in the U.S. is over $1 trillion so yeah, there is plenty to go around.
Sad that the question even needs to be asked.
Latin American Collection
I'm sorry to say, but if I had credit card debt that I could not pay off monthly I would not be buying coins and selling off what I had to pay the credit cards.
Donato
Donato's Complete US Type Set ---- Donato's Dansco 7070 Modified Type Set ---- Donato's Basic U.S. Coin Design Set
Successful transactions: Shrub68 (Jim), MWallace (Mike)
CC's should only be used to buy high end CC silver dollars.
Sorry to hear that you went down the debt rabbit hole. If you had been listening to Dave Ramsey this would have never happened. Dave will change your spending habits, and your life.
Sell every asset you have (aside from house) to pay off the debt if necessary.
https://www.youtube.com/user/DaveRamseyShow
Baby Step 1 – $1,000 to start an Emergency Fund
Baby Step 2 – Pay off all debt using the Debt Snowball
Baby Step 3 – 3 to 6 months of expenses in savings
Baby Step 4 – Invest 15% of household income into Roth IRAs and pre-tax retirement
Baby Step 5 – College funding for children
Baby Step 6 – Pay off home early
Baby Step 7 – Build wealth and give
27% is insane. They thought the mafia were crooks for charging 25%.
We purchased a new living room set interest free for 12 months but of course
it was on one of their credit cards. 29.9% and if you didn't pay the full balance
within a year you were charged all the balance interest which would have been around $800.
Of course I paid it off completely. So we purchased a 2nd living room set, (2 living rooms)
6 month interest free but I put $2500 down and financed $1000. Same deal but when
the balance was at $760 I looked at the terms
If I paid the minimum every month it would take 22 years to pay off $760!! 22 years. 22 years for $760.
Amazing.
"I spent 50% of my money on alcohol, women, and gambling. The other half I wasted.