Domain Credit Crunch
April 11th, 2008Many domainers would advice you against using credit to purchase domain names. Primarily because unless your a seasoned vet, using credit to purchase a domain name can often times cause much more trouble than anticipated. Imagine overpaying for a domain name that wont gain in value and racking up interest debt in the process. It can get ugly, especially if you jump in too soon or too much.
Now, if the shoe is put on the other foot, there are some great things floating around that you may want to consider taking advantage of. I recently received an offer from Discover for a credit card with 0% APR (FOR LIFE!) on Balance Transfers and a reasonable rate on regular purchases. What does this mean? Well, basically it means I could make a large acquisition of a premium domain name, in the neighborhood of $5-10,000 on a credit card, move the balance to the discover card and pay it off nice and slow without accruing interest. Its like borrowing money for practically free.
Now, you may be saying, Theres gotta be a catch. There is. You must put at least one transaction on your new discover card each month (starting Jan 09). However, this can be as little as .60 cents. So, being a little creative, you can setup a reoccurring bill from your paypal account for $1-2 per month and this is automatically drafted from your Discover card. There is also a Balance Transfer Transaction fee, but that is maxed out at $75.
What Ive described is a great way to borrow money, with practically no interest. Again, its not recommended for those just stepping into the game, but rather for the more seasoned crowd, looking to expand on someone else’s dime. You also of course must need half decent credit. Good luck!
Justin
Pretty cool idea. I received a credit card offer kind of like the one your received and didn’t even view it in a way that could be beneficial for my domaining. I guess as long as you transfer a reasonable balance over to the 0% APR credit card and make your payments on time and charge at least .60 cents a month, your golden. Great, now you’ve got me fishing in the garbage trying to find the offer! LOL
Comment by Rudy — April 11, 2008 @ 1:05 pm
I have done this myself when financing some great Chinese antiques and most recently with domains. You should be doing this even if you can pay cash. That way your money continues to earn interest as you pay for more investments that are increasing in value.
Whatever you do, don’t make a late payment! They usually add terms (very fine print) that state if you are late on a payment - even a day - your interest rate may be changed to “xx%”. It is usually a huge increase and impossible to get them to reduce. Give the bills extra time to reach their destination…
Comment by Kelly Lieberman — April 11, 2008 @ 2:26 pm
Now, if the shoe is put on the other foot, there are some great things floating around that you may want to consider taking advantage of. I recently received an offer from Discover for a credit card with 0% APR (FOR LIFE!) on Balance Transfers and a reasonable rate on regular purchases. What does this mean? Well, basically it means I could make a large acquisition of a premium domain name, in the neighborhood of $5-10,000 on a credit card, move the balance to the discover card and pay it off nice and slow without accruing interest. Its like borrowing money for practically free.
Now, you may be saying, Theres gotta be a catch. There is. You must put at least one transaction on your new discover card each month (starting Jan 09). However, this can be as little as .60 cents. So, being a little creative, you can setup a reoccurring bill from your paypal account for $1-2 per month and this is automatically drafted from your Discover card. There is also a Balance Transfer Transaction fee, but that is maxed out at $75.
What Ive described is a great way to borrow money, with practically no interest. Again, its not recommended for those just stepping into the game, but rather for the more seasoned crowd, looking to expand on someone else’s dime. You also of course must need half decent credit. Good luck!
- Justin YOU are clever - VERY SMART MOVE - that is the way to go.
Comment by damir — April 13, 2008 @ 10:05 pm
Watch out for this though: Make sure that you don’t make any large purchases on the card that had the large balance transfer with the promotional rate, because when you make a payment, it always will go toward the lowest interest balance first. If you also have a large purchase on that card, you won’t be able to pay that off until the balance xfer balance is paid off first…
Comment by Jason — April 15, 2008 @ 10:39 am