Personal Finance

What Are You Doing With Your MBNA 0% Money ??

  • Last Updated:
  • Sep 17th, 2014 2:24 pm
Tags:
None
Deal Expert
May 30, 2005
41967 posts
2768 upvotes
Richmond Hill
jwierzbowski wrote:
Sep 14th, 2014 9:28 pm
Yes, invest on margin with borrowed money. Why not just skip playing daytrader and just throw it all on black instead?
You misunderstood. Some people like to invest on margin. Your brokerage will charge you Prime +X%, which is miles higher than 1%. If you were going to invest on margin anyways, you might as well do it via this card.
***Brand New Apple TV 4th Gen 64GB ONLY $220!!***
Silver Coins | Apple TV 4th Gen 64GB | Philips Wake-Up Light with Radio
Heatware | RFD Feedback
Deal Expert
May 30, 2005
41967 posts
2768 upvotes
Richmond Hill
kneevase wrote:
Sep 14th, 2014 4:58 pm
I guess you did't read the post where I suggested that you can sign-up for both cards with sign-up incentives *AND* cards with promotional cash advance rates. The fact that one card is more lucrative than another doesn't mean that you cannot exploit both the good and the better! :facepalm:
There are tons of cards out there that provide better than $200 reward in exchange for a hard credit inquiry. Not just the one I mentioned. If one wanted to cash in twice, there would be many other options, this one would not even make the top 10 list, UNLESS one absolutely needed cash instead of cash back, for example, for the reasons I mentioned previously.
***Brand New Apple TV 4th Gen 64GB ONLY $220!!***
Silver Coins | Apple TV 4th Gen 64GB | Philips Wake-Up Light with Radio
Heatware | RFD Feedback
Newbie
Oct 15, 2009
87 posts
43 upvotes
Kanata
jwierzbowski wrote:
Sep 14th, 2014 9:28 pm
Yes, invest on margin with borrowed money. Why not just skip playing daytrader and just throw it all on black instead?
What does day trading have to do with margin? You can daytrade without margin, and you can buy and hold on margin. They're not necessarily connected and he didn't mention day trading. You can buy government bonds on margin, so it doesn't necessarily mean it's stupid "bet it all on black" risk either.

Leveraged investing does have risk but it's not always a thoughtless gamble.
Newbie
Mar 29, 2017
36 posts
11 upvotes
Victoria
Jon Lai wrote:
Sep 14th, 2014 11:02 pm
You misunderstood. Some people like to invest on margin. Your brokerage will charge you Prime +X%, which is miles higher than 1%. If you were going to invest on margin anyways, you might as well do it via this card.
Sounded like meant to take out further margin on already borrowed money.

It's not just 200$, that's assuming a relatively small credit allowance and a GIC rate. You could have a larger allowance and put it in preferred shares and stable but reasonable dividend etfs and easily return 5%. The guy who recently posted in that thread got 70k...that's an extreme amount but a very solid return even playing safe (which is the only way I'd play someone else's money).
Newbie
Mar 29, 2017
36 posts
11 upvotes
Victoria
badcoffee wrote:
Sep 14th, 2014 11:16 pm
What does day trading have to do with margin? You can daytrade without margin, and you can buy and hold on margin. They're not necessarily connected and he didn't mention day trading. You can buy government bonds on margin, so it doesn't necessarily mean it's stupid "bet it all on black" risk either.

Leveraged investing does have risk but it's not always a thoughtless gamble.
Day trading has plenty to do with margin. "Investing" on under a year timeline is not investing, it's speculating.
Newbie
Oct 15, 2009
87 posts
43 upvotes
Kanata
jwierzbowski wrote:
Sep 14th, 2014 11:19 pm
Day trading has plenty to do with margin. "Investing" on under a year timeline is not investing, it's speculating.
Again, you can daytrade without the use of margin. Daytrading is about short positions, not necessarily using leverage. The use of margin does not mean daytrading.. If some cars are red that does not mean all cars are red... He didn't mention daytrading, that was something you added on your own.

Just because you buy something on margin, doesn't mean you have to only "speculate" for 1year. e.g. Say you had already a large portfolio and that has lots of availabe margin (e.g 100+k). You could deposit in 20K of 0% money and use it for the initial margin to purchase something you plan on holding for 20+years. At the end of the year, you could withdrawl the 20K, without selling. Brokerages, like, TDDI, have margin at 4.25% so you just saved yourself $850 for the year.
Newbie
Mar 29, 2017
36 posts
11 upvotes
Victoria
badcoffee wrote:
Sep 15th, 2014 6:58 am
Again, you can daytrade without the use of margin. Daytrading is about short positions, not necessarily using leverage. The use of margin does not mean daytrading..
This is contradictory. You can't short positions without a margin account. P.S., Daytrading is more about cashing out by market's close, not necessarily about shorting positions.
badcoffee wrote:
Sep 15th, 2014 6:58 am
Just because you buy something on margin, doesn't mean you have to only "speculate" for 1year.
This MBNA money is available for (just under) 1 year. That is the timeframe before you must pay it back. That is the timeframe for your investment. I propose that this is not a long enough timeline for prudent "investing". The buy and hold strategy's strength is that stocks go up in the long term and you're willing to ride out any bumps and bruises in the short.
badcoffee wrote:
Sep 15th, 2014 6:58 am
e.g. Say you had already a large portfolio and that has lots of availabe margin (e.g 100+k). You could deposit in 20K of 0% money and use it for the initial margin to purchase something you plan on holding for 20+years. At the end of the year, you could withdrawl the 20K, without selling. Brokerages, like, TDDI, have margin at 4.25% so you just saved yourself $850 for the year.
And hold a losing position that's now charging you 4.25% margin? Being able to hold a losing position on more expensive debt because your timeline was short term is not prudent investing.
Newbie
Oct 15, 2009
87 posts
43 upvotes
Kanata
jwierzbowski wrote:
Sep 15th, 2014 1:28 pm
This is contradictory. You can't short positions without a margin account. P.S., Daytrading is more about cashing out by market's close, not necessarily about shorting positions
Now you think daytrading is only shorting? Haha..

What's contradictory? That margin and day trading cant exist without the other? That's nonsense.
jwierzbowski wrote:
Sep 15th, 2014 1:28 pm

This MBNA money is available for 1 year. That is the timeframe before you must pay it back. That is the timeframe for your investment. I propose that this is not a long enough timeline for prudent "investing". The buy and hold strategy's strength is that stocks go up in the long term and you're willing to ride out any bumps and bruises.
As I've said, you don't need to close our your positon at the end of the year. You dont need to sell if you have succificent avalable margin in your account, your borrowing costs just go back up. e.g. from 0% back to whatever your margin rate is (This is what the original commenter you replied to was suggesting). You can buy and hold stocks, ETFs on margin. I don't know why you're having troubles comphrending that. I'm still in positions I bought with margin back in 2008/2009. I'm in no rush to sell because costs at my marginal rate is super low, and I don't want to pay capital gains.
jwierzbowski wrote:
Sep 15th, 2014 1:28 pm
And hold a losing position that's now charging you 4.25% margin? Being able to hold a losing position on more expensive debt because your timeline was short term is not prudent investing.
Again, it doesn't force you to shorten your position. And what are you talking about? Using some margin doesn't youre being forced to close a losing positon. Have you actually used margin before?

The performance of a position is independent of whether youre buying with borrowed money or not. Your personal risk goes up using leverage, but not the risk of the underlying security. You could buy something risky, or some widow and orphans stock with it. I dont know why you think it's now a losing position.
Deal Addict
Jan 14, 2011
1151 posts
338 upvotes
lovefreemoney wrote:
Sep 13th, 2014 11:48 pm
Hard to believe people actually go through the trouble to make a lousy $200. You add an inquiry to your file, a new account that decreases your average age, and max it right away killing your credit score for an entire year to profit $200??? I don't get it.
What the heck are you talking about? It's no trouble at all, it's all automatically set, you spend a few minutes online taking care of it. And it does NOTHING to your credit rating, if anything it might help it out.
Deal Addict
Feb 26, 2008
1821 posts
1260 upvotes
Jon Lai wrote:
Sep 14th, 2014 11:04 pm
There are tons of cards out there that provide better than $200 reward in exchange for a hard credit inquiry. Not just the one I mentioned. If one wanted to cash in twice, there would be many other options, this one would not even make the top 10 list, UNLESS one absolutely needed cash instead of cash back, for example, for the reasons I mentioned previously.
Really? Would you care to list the 10 cards available right now that have $200+ sign-up bonuses? Here, I'll help (no particular order):

1) Amex Rewards Gold (twice per year)
2) Marriott card (one time only or multiple times if you are lucky)
3) Capital 1 Aspire Travel (a couple of times per year perhaps)
4) ScotiaBank Amex

Okay, I'm running out of ideas here....if you look at the *past* there have been some really good sign-up bonuses with MBNA Sony, MBNA Alaska Airlines, MBNA Best Western, MBNA Choice Privileges, Amex AeroGold Plus, Amex SPG, CIBC Aeroplan, TD Aeroplan, BMO Rewards World Elite, and National Bank World Elite, all with first year free. But those offers are not currently available...and some of them were one-time only cards. Sincerely, please list the other six cards that you had in mind, as I need some more churning opportunities.
Deal Addict
User avatar
Mar 31, 2009
1075 posts
572 upvotes
I use it for cashflow so that I can make purchases and buy stock without worrying about what bills I need to pay that month. I know that on a yearly basis I don't spend nearly as much as I make, so it'll all work out, but on a monthly basis if I bought stock and had a couple of large bills I might have cashflow problems if I didn't have the MBNA money.

The bulk of the money just sits earning between 1.9 and 3% interest the whole year. Since the fee is only 1%, that's a positive carry, even though it's not much. Even if you factor in tax, you're still ahead, so you may as well take the free loan.

Lots of people have to time their spending and worry about how much money is in their bank accounts to cover big bills at certain times of the year or each month, so to instantly be free of that issue by using MBNA's money - and actually make a small profit doing it - really makes me happy.

Also, I churn credit cards for the bonus' anyway. Usually the MBNA cards can be obtained with at least a $60 cash bonus. So even without the balance transfer deal, I'd still probably get the card just to churn it.
Deal Guru
User avatar
Nov 30, 2009
12178 posts
578 upvotes
Toronto
Wait do they still have the 0% transfers?
[QUOTE]I wish there was a way to know you're in the good old days before you've actually left them.[/QUOTE] ~Andy Bernard, The Office (U.S.)
[OP]
Deal Addict
Feb 28, 2003
1322 posts
90 upvotes
Holy crap this thread exploded into something way off topic l

I'm using my $10k in etf I feel its an OK risk to take now . But the replacement for margin trading also makes sense .
Rogers
$35 Unlimited Local Calling
$30 6GB Data
$10 Retention VP (2500sms/CID/VM)
$75 + GRRF 2.13 + 5% GST = $80.99 :|
Deal Addict
Jul 11, 2008
1685 posts
84 upvotes
Ottawa
jwierzbowski wrote:
Sep 15th, 2014 1:28 pm
This MBNA money is available for (just under) 1 year. That is the timeframe before you must pay it back. That is the timeframe for your investment. I propose that this is not a long enough timeline for prudent "investing". The buy and hold strategy's strength is that stocks go up in the long term and you're willing to ride out any bumps and bruises in the short.
sorry, i dont' see how jwierzbowski is wrong about this. i'm in this situation... being forced to sell some of my investments after a year by using this 0% promo.
Newbie
Oct 15, 2009
87 posts
43 upvotes
Kanata
pace wrote:
Sep 16th, 2014 11:06 am
sorry, i dont' see how jwierzbowski is wrong about this. i'm in this situation... being forced to sell some of my investments after a year by using this 0% promo.
Well if it holds true for you, then it must hold true for everyone? I guess in your world everyone has zero margin available their margin account besides their mbna money and are forced to sell to repay.

Top