Ok... I know I'm funny about using my cards every month... but I've gotten irritated buying gas here, gum there just to keep them active. So I've started a new thing and I thought I'd pass it on. I've been buying a small bond on my Capital One credit cards every month. I'm buying EE bonds for long-term savings... and when you buy from http://www.savingsbonds.gov/bpd/bpdhome.htm There's no extra charge, not even for mailing. Capital One counts them as purchases... so I look active with my card and I'm buying something that's good for me. Right now they're getting 3.96 fixed, state and local tax free (and Federal tax deferred). Anyway, I thought I'd pass on this idea. I haven't tried it with any other cc but I'm having fun putting away my conservative money into Patriot Bonds... and I'm also keeping my credit cards active.
*All* credit card companies register these as a purchase. Amex once tried to register them as a cash advance. The US Treasury has cut Amex out of the loop until they comply. They did, so now they take Amex once again. You can cash those bonds after 6 months, but if you cash them before they're 5 years old, you lose 3 months of interest. Yep, it's a great way to get mileage / points. Saar
Marie, What a GREAT idea, am sharing with my 18 year old just beginning his credit journey, now. Thank you! Sassy
What a terrific idea, Marie! I didn't even know you could charge bonds! Thanks so much for sharing this...I just purchased a $500 Patriot Bond...way kewl! L
Right now they're getting 3.96 fixed, state and local tax free (and Federal tax deferred). I'm also keeping my credit cards active. Marie | ====================BUT you are loosing money too! LB five nine
Actually even with the 3 month interest penalty for early withdrawal these can be a good deal for short term savings. If you buy the bonds on the last day of the month you actually earn interest from the first of the month. Then you can get the float on your credit card - so really the 3 month penalty is only 1 to 1 & 1/2 months. I turned my parents on to this so their using a new 0% card and getting enough miles to go to Europe. Free money - borrowed from the cc companies -- plus travel perks - does it get any better?
Hi Marie - I hadn't thought about this - I will click and look - good idea - but I think you need to keep the Bonds 5yrs+ to earn the true 3.96% I looked at Capital One paper that pays around 5 for that - BUT NOT TAX DEFERRED! I definitely understand the differences Hmmm - hey Saar ! Doggin it today - dogman
