Seeking CC help/suggestions - Specific conditions

Our current commander in chief partially won the last election when he interrupted Hillary and explained how he was smart to have paid less in taxes than he really should have. People do far worse on a regular basis when they truly earn income(say $50 for mowing their neighbor’s lawn) and don’t report it. We have guidance on that from the IRS and yet it happens almost constantly and the IRS has no interest in going after small fish. Now on MS’ing to earn additional income, there’s no guidance from the IRS and I have to agree with shinobi that there’s virtually no risk. I don’t think this is worth 20 posts to argue over.

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Yes, we all agree on this, except shinobi, who read a post by some anonymous poster online who claimed to have spoken to IRS directly.

I also agree that there’s virtually no risk, but that is not what shinobi says. He keeps insisting that it is “tax free”. “No risk” is not the same as “virtually no risk”.

There’s probably less than half a percent chance of getting caught doing any old underreporting, because IRS has had their budget cut for years and spends most of its resources on frying bigger fish. So all sorts of law breaking is “virtually no risk”. Until you get caught, that is, since there’s no statute of limitations on tax fraud. And I’m not saying this rises to the level of “fraud,” but it could probably be argued that way.

What this thread has turned into reminds me of the presidential election. Kinda funny (and also kinda really sad too).

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Just made another quick deal. Sun East FCU 3mo CD .10% $3000 mature 2/2/21.

My Double Cash Card is in BIG business this month. Property Tax, Vehicle Renewal (3 auto’s) 3mo CD’s + regular bills. Should get another big cash back check from CC. :thinking:

You guys are making a big deal over Income Tax situations.

Not me, I just accept the 1099’s that come in & that can be sizeable. The interest receipts will still be high for some time because most CD’s purchased rate 3-4%… Sure adds up…

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It might be worth looking for cards with big sign-up bonuses that have high minimum spend requirements. DoC has a list: Best Current Credit Card Sign Up Bonuses & Offers For November, 2020 - Doctor Of Credit.

There are a few 2%+ cards on there that might be worth your while if you are willing to redeem on travel or pay an annual fee.

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Yup. I do the same thing.

You might want to consider applying for a Discover Miles credit card, pattyb53, provided it would be your first time having that card.

If you can obtain a Discover Miles card it will pay you a 3% reward for the first year, going down to a 1.5% reward thereafter. I’m already past that first year with my own Discover Miles card. But I made a tidy amount of money during that first year, and I still charge to the card from time to time. The Discover reps are very easy on their cardholders . . . very fair. And they are all in the USA.

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Just to get my mind of politics…

I joined Sun East & Justice CU (3 mo CD’s using CC)

Have you got some other places?
Most places I looked at don’t have those short term offers.

Patty, I hope you heeded the prior warning about Citi often treating such charges as cash advances, and confirmed proper “purchase” treatment before diving in headfirst with your Double Cash card.

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Well, there is Inova. But I think you already tried there.

I do not have other opportunities to offer at this time which are nationally available. But keep your eyes open and check out any credit unions where you might have a membership.

Consumers CU, for example, offers online opening of CDs. But last time I checked they were no good at all because of dollar amount limitations. Still, with so many other credit unions going in this direction, CCU might have upgraded their terms. I have not checked.

This is sound counsel with Citi and with any other card you might use to run this hustle. However I admit:

Across all my cards and with any number of counterparties I’ve only once run into problems. To wit:

It was with Navy Federal Credit Union. Do not try to run this hustle with an NFCU credit card. Period.

Otherwise it has all been good.

The warning was, and point is, that Citi specifically has a long-established history of taking such “purchases” and changing them to cash advances after approval. Which is why people who generally know things dont have a current answer, because they crossed Citi off the list long ago.

I just checked my Citi card statement & they list each one as a regular credit.

Justice FCU $2500.00, Sun East FCU $3000.00

I also routinely use my Citi DC card to purchase CDs with no hassles.

But this does not detract one bit from the point made by glitch99. Among all my cards my Citi DC card is the one I trust the least. It would not surprise me at all if they tried to pull something in the future.

Still, to be fair, so far so good. I have been charging CDs from at least four different counterparties to the card for a couple of years without incident and with my Citi DC rewards always coming through like clockwork. I just picked up another chunk this morning, like finding money in the street. :grin:

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Since you are participating, pattyb53, allow me to offer an additional thought.

Be mindful of when you open your CD. You need to know your next CC statement closing date. Citi is very good about providing this date right on your account page.

The objective is to buy your CD within a day or two following statement closure. That way you have a bit less than two months before being required to pay Citi for the CD without need to pay any interest. This means for the first two (almost) of three months you own a CD for which there was no need to pay. So there is only slightly more than one month, after you put money out by paying Citi, before you get that money back as your CD matures.

Now that is interesting. So you get 2% every 3 months but your money is out of pocket only for a month. This getting tempting at this point…

Yes, slightly more than one month actually. But there is an additional wrinkle you might wish to consider.

Even for that one month, ask yourself where else that money might be sitting were it not tied up in the three month CD. I cannot answer that question for others. For me:

My best liquid money alternative right now is paying 1.35% APY taxable. So I lose a bit more than 1% APY (the hustle CD itself pays taxable interest at a very small taxable APY) for that one month plus.

Or else I could put that money into one of my add-on CDs and earn 3.25% APY taxable. But that would tie the money up until 2024, a very serious consideration to my mind.

Money tied up in a CD for three months is not really liquid. But it’s not tied up for several years either. So it is “sort of” liquid.

Bottom line this hustle might offer an attractive alternative for your liquid and “sort of” liquid funds. That is how I operate the hustle. I also have illiquid funds in much longer add-on CDs paying a decent interest rate. If interest rates for longer CDs continue to be very low when my existing longer CDs mature, I might increase the percentage of my funds devoted to this hustle. But we are not there yet.

I think you were the smartest one with those add-on 3.25% CD’s. I think you are referring to PSECU accts.

So I also have several of those CD’s, but not add-on’s. I can’t remember the situation as it was happening, but I had the money at the time & bought straight out 2-3 yr 3.25% CD’s.

Looking back, Not the smartest thing I have done. But as I recall, 3-4% CD’s were available often. :wink:

Not PSECU any longer. I’m finished adding on there. Now GTE Financial, Freedom CU and NFCU for my IRA . . . all add-on CDs.

Yes, I am fortunate to have the add-on CDs. Between those and this little hustle I still have a decent income.

That’s the specific datapoint needed. :+1:

Citi has also been known to excluded certain merchant categories from earning rewards, especially the one (I cant recall the actual category number) that CD purchases usually fall under. So it’s good to do the rewards math on their payouts occasionally, too.

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Indeed. I keep my short term funds mostly in a checking account that earns 0.01% or a “high yield” savings account earning 0.05%. Parking it in a CD ladder bought with Credit cards might be quite a bit better.