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The amount of insight and knowledge in your comment is so dense that my single upvote does not do it justice. My thoughts: > Credit issuers, particularly unse

The amount of insight and knowledge in your comment is so dense that my single upvote does not do it justice. My thoughts: > Credit issuers, particularly unsecured credit card issuers, have been calling back lines every time there's even a whiff of an economic downturn since time immemorial I have an aggregate mid six figure credit line excluding mortgages. Have been through this and the last two recessions. Never had a $1 drop in CL: I choose who I build realtionships with very closely. Infact, I have had CLIs happen during "good times", without me reaching out . One lender even did a CLI without even notifying me (they usually email or mail you "good news!") - the only reason I noticed is because I like to look at my statements manually every billing period. There is no Bank of America, Citibank or any of that retail nonsense in my basket of credit mix. Majority of them are in geographically diversified credit unions Finance 101. > absolutely do not rely on credit being there as a backstop. That's what cash savings are for cash is an asset class but it's extremely expensive and a liability for me. cash causes me headaches. Even with my 3% APY bank accounts (people seem to believe there are none of them in the US which is untrue!) after effort and inflation, I barely break even. I have to track it, protect it try and ensure it does not loose value too much. I have to visit local branches when I need to take it out or deposit it. Credit is awesome. In the U.S., it's really cheap and consumer lines of credit have extremely strong protections. I purchased a $500 phone from Best Buy because they had a special promotion that required me to purchase their gift cards. They would not allow me to purchase gift cards using my premier credit card, so I used cash. A year later, the phone died. I had 0 recourse. Had I purchased it with my Amex, all I would have to pay is a $50 processing fee, if at that. I would, at worst, get refunded by Amex, the fair value of the phone at that time. In my few interactions with Amex, I wouldn't be surprised if they just credited me $500.

techsupporter 6y ago
Thank you for the compliment; I just pontificate on forums. > There is no Bank of America, Citibank or any of that retail nonsense in my basket of credit mix. Majority of them are in geographically diversified credit unions You have already figured out what I meant by issuers with different risk profiles, so you're ahead in the credit "game" for sure. My largest credit lines are also with credit unions and they've not fluctuated once through three economic dips. That's not so much bragging--I'll never achieve a six-figure CL with any of them--as it is a data point. The large issuers have their purposes and I have credit lines through them, just not the ones I use for more long-term planning. As for this: > cash causes me headaches. Even with my 3% APY bank accounts (people seem to believe there are none of them in the US which is untrue!) after effort and inflation, I barely break even. > I have to track it, protect it try and ensure it does not loose value too much. I have to visit local branches when I need to take it out or deposit it. I think you are conflating cash as an investment and cash as an asset. You're right that it comes with a cost, but with that cost you (in currencies like EUR, JPY, and USD) are buying stability. Cash absolutely is not a viable growth investment but diversification means you have a stable block of cash on which you can fall back. The emergency fund is not an investment; the most risk it should ever see are perhaps well-insured municipal/state government bonds. I have my emergency fund parked in two different online savings accounts paying about 2% interest each. Yes, I wind up behind relative to inflation over a long enough period of time but it's worth it to me to know that money will always be there and immediately accessible. (Also, for what it's worth, moving money electronically in the States has gotten easier. I have set up two of my credit union credit cards as bill pay destinations on both of my emergency fund savings accounts. If I need to use the emergency fund, I simply put the charge on a credit card and pay it from the emergency fund account instead of my regular account. No branches involved.) > Credit is awesome. In the U.S., it's really cheap and consumer lines of credit have extremely strong protections. This is true, but that's not what I mean when I talk about emergency funds and that's not what I thought you were getting at when you referred to the reducing of credit lines for people who thought they were getting them to plan ahead and use in lean times. Credit is a tool, one with a somewhat slimy handle, but it's not a good tool in an economic downturn because that's when it will break the fastest. I have a handful of 0% credit lines in use at the moment for just this reason; if they're going to give me money to use for free on something I'd have done anyway, I'm damn sure going to use it. I also have money to pay them off in short order squirreled away just in case I need to extinguish that debt in a hurry.
- subhobroto 6y ago
  > I have a handful of 0% credit lines in use at the moment for just this reason Would love to connect with you as now I'm outright jealous! The best offer I have had Q1 2020 is 21 months 0% BT with 3% BT fee but only if I suffer a hard inquiry. OTHERWISE it's 12 mo, 5% BT fee. This is essentially a 22 (21 + 1) months 0% loan with an effective 7% processing fee (I have to pay ~3% to create the credit card charge on my 2% cash back card, pay 3% to the processor for their troubles and another 3% BT fee) > That's not so much bragging--I'll never achieve a six-figure CL with any of them--as it is a data point I did want to clarify that I stated I have an aggregate mid six figure credit line excluding mortgages. I do not have a six-figure CL with any one of them, not even near. I also don't wish to have one because it would likely be rated as a charge card instead of a revolving line which would negatively affect my scores. > Also, for what it's worth, moving money electronically in the States has gotten easier Not if the objective is to gain access to hard cash. Even with my relationship with the institutions, the most I can withdraw in cash is $1500/day. During economic downturns, the ATMs run dry - you know this. ... and any place that allows me to use a debit/ATM card accepts a credit card as well! Let those sweet credit card rewards pour in. > but it's not a good tool in an economic downturn because that's when it will break the fastest My objection is your use of "not a good tool in an economic downturn". Here's my point: During economic downturns, relief is provided. Saw it in 2008, 2010, 2018, 2020. I have recieved notifications from two of my credit card issuers that they are willing to offer me 0% payment plans - and all I have to do is press a button agree to pay a fixed, principal only monthly payment. Who would offer such a fantastic deal outside an economic downturn? THERE'S absolutely 0 reason for me to tap into the 1.75% CD I have at Ally. I was lucky to get that on the very Friday, the day after which the Fed published their effectively 0% policy. I go on with my life taking advantage of 0% payment plans while my "emergency cash" makes me money (although at a terrible 1.75%, which after effort and inflation is NET NEGATIVE! I hate cash with a vengance!) I hate cash. It's a liability, a headache. What I really love is positive cashflow. Now that really gets me perky Let's connect and happy weekend!
function_seven 6y ago
> Even with my 3% APY bank accounts (people seem to believe there are none of them in the US which is untrue!) I'm one of those people. I have an account that started at 2.2%, and is currently earning 1.8% or so. I thought that was the best I could do without locking up my savings in long-term CDs. Can you share any info on this?
- subhobroto 6y ago
  I can but that exposes me to clear liability that will be hard to argue against (and I'm easily reachable both by you and your attorney) as I am also a shareholder at those institutions and hence have a clear selfish motive in suggesting that you use them even if they later cause you harm. So I think I have a reasonable suggestion for you: look into credit unions that are looking to hand out business loans. In my experience, it's less risky than investing directly into said business (honestly that's where you make the most money!) and you're backed by the NCUA upto $250k per account

techsupporter 6y ago

Thank you for the compliment; I just pontificate on forums. > There is no Bank of America, Citibank or any of that retail nonsense in my basket of credit mix. Majority of them are in geographically diversified credit unions You have already figured out what I meant by issuers with different risk profiles, so you're ahead in the credit "game" for sure. My largest credit lines are also with credit unions and they've not fluctuated once through three economic dips. That's not so much bragging--I'll never achieve a six-figure CL with any of them--as it is a data point. The large issuers have their purposes and I have credit lines through them, just not the ones I use for more long-term planning. As for this: > cash causes me headaches. Even with my 3% APY bank accounts (people seem to believe there are none of them in the US which is untrue!) after effort and inflation, I barely break even. > I have to track it, protect it try and ensure it does not loose value too much. I have to visit local branches when I need to take it out or deposit it. I think you are conflating cash as an investment and cash as an asset. You're right that it comes with a cost, but with that cost you (in currencies like EUR, JPY, and USD) are buying stability. Cash absolutely is not a viable growth investment but diversification means you have a stable block of cash on which you can fall back. The emergency fund is not an investment; the most risk it should ever see are perhaps well-insured municipal/state government bonds. I have my emergency fund parked in two different online savings accounts paying about 2% interest each. Yes, I wind up behind relative to inflation over a long enough period of time but it's worth it to me to know that money will always be there and immediately accessible. (Also, for what it's worth, moving money electronically in the States has gotten easier. I have set up two of my credit union credit cards as bill pay destinations on both of my emergency fund savings accounts. If I need to use the emergency fund, I simply put the charge on a credit card and pay it from the emergency fund account instead of my regular account. No branches involved.) > Credit is awesome. In the U.S., it's really cheap and consumer lines of credit have extremely strong protections. This is true, but that's not what I mean when I talk about emergency funds and that's not what I thought you were getting at when you referred to the reducing of credit lines for people who thought they were getting them to plan ahead and use in lean times. Credit is a tool, one with a somewhat slimy handle, but it's not a good tool in an economic downturn because that's when it will break the fastest. I have a handful of 0% credit lines in use at the moment for just this reason; if they're going to give me money to use for free on something I'd have done anyway, I'm damn sure going to use it. I also have money to pay them off in short order squirreled away just in case I need to extinguish that debt in a hurry.

subhobroto 6y ago
> I have a handful of 0% credit lines in use at the moment for just this reason Would love to connect with you as now I'm outright jealous! The best offer I have had Q1 2020 is 21 months 0% BT with 3% BT fee but only if I suffer a hard inquiry. OTHERWISE it's 12 mo, 5% BT fee. This is essentially a 22 (21 + 1) months 0% loan with an effective 7% processing fee (I have to pay ~3% to create the credit card charge on my 2% cash back card, pay 3% to the processor for their troubles and another 3% BT fee) > That's not so much bragging--I'll never achieve a six-figure CL with any of them--as it is a data point I did want to clarify that I stated I have an aggregate mid six figure credit line excluding mortgages. I do not have a six-figure CL with any one of them, not even near. I also don't wish to have one because it would likely be rated as a charge card instead of a revolving line which would negatively affect my scores. > Also, for what it's worth, moving money electronically in the States has gotten easier Not if the objective is to gain access to hard cash. Even with my relationship with the institutions, the most I can withdraw in cash is $1500/day. During economic downturns, the ATMs run dry - you know this. ... and any place that allows me to use a debit/ATM card accepts a credit card as well! Let those sweet credit card rewards pour in. > but it's not a good tool in an economic downturn because that's when it will break the fastest My objection is your use of "not a good tool in an economic downturn". Here's my point: During economic downturns, relief is provided. Saw it in 2008, 2010, 2018, 2020. I have recieved notifications from two of my credit card issuers that they are willing to offer me 0% payment plans - and all I have to do is press a button agree to pay a fixed, principal only monthly payment. Who would offer such a fantastic deal outside an economic downturn? THERE'S absolutely 0 reason for me to tap into the 1.75% CD I have at Ally. I was lucky to get that on the very Friday, the day after which the Fed published their effectively 0% policy. I go on with my life taking advantage of 0% payment plans while my "emergency cash" makes me money (although at a terrible 1.75%, which after effort and inflation is NET NEGATIVE! I hate cash with a vengance!) I hate cash. It's a liability, a headache. What I really love is positive cashflow. Now that really gets me perky Let's connect and happy weekend!

function_seven 6y ago

> Even with my 3% APY bank accounts (people seem to believe there are none of them in the US which is untrue!) I'm one of those people. I have an account that started at 2.2%, and is currently earning 1.8% or so. I thought that was the best I could do without locking up my savings in long-term CDs. Can you share any info on this?

subhobroto 6y ago
I can but that exposes me to clear liability that will be hard to argue against (and I'm easily reachable both by you and your attorney) as I am also a shareholder at those institutions and hence have a clear selfish motive in suggesting that you use them even if they later cause you harm. So I think I have a reasonable suggestion for you: look into credit unions that are looking to hand out business loans. In my experience, it's less risky than investing directly into said business (honestly that's where you make the most money!) and you're backed by the NCUA upto $250k per account