Pay off credit card with another mileage earning card?

Discussion in 'General Discussion | Miles/Points' started by Emos-closet, May 10, 2011.  |  Print Topic

  1. Emos-closet
    Original Member

    Emos-closet Silver Member

    Messages:
    233
    Likes Received:
    434
    Status Points:
    460
    I have a close relative who is in debt and looks like I am going to have to lend a hand. She's about 30,000 grand underwater with 20,000 being credit card debt. Anybody know of a creative way that I can help her pay this off so that I can at least earn some miles/ points along the way?


    I am an Amex,chase, citibank, capital one card holder. Her debt is with BOA and chase.
     
    jbcarioca likes this.
  2. Bluto
    Original Member

    Bluto Silver Member

    Messages:
    187
    Likes Received:
    242
    Status Points:
    360
    This isn't the advice you were seeking but I will offer it anyway. Recommend that she file for bankruptcy. She will never catch up on $30k at credit card interest rates. Bankruptcy will be a far less costly option for her (and for you) and she will develop some invaluable habits during the post-bankruptcy period while eliminating credit from her spending routine.
     
    Dovster, taiwaned, al613 and 4 others like this.
  3. Grace
    Original Member

    Grace Silver Member

    Messages:
    309
    Likes Received:
    389
    Status Points:
    500
    My ex husband has that much credit card debt. I tried to do him a favor and balance transferred $20,000 into my name. i ended up needing to control his every move. He ended up running the cards back up.
    That is why he is now my ex.

    The best help you can give is to do nothing.
     
  4. torbster
    Original Member

    torbster Silver Member

    Messages:
    471
    Likes Received:
    1,370
    Status Points:
    775
    I know there are some mile-earning possibilities on balance transfers with some cards, but I think in all cases the fees will greatly outweigh the earnings..
     
    lin821 likes this.
  5. below sea level
    Original Member

    below sea level Silver Member

    Messages:
    170
    Likes Received:
    310
    Status Points:
    435
    Paying one card with another is normally treated as a cash advance, meaning immediate interest and no points. I agree with the advice offered by Bluto above.
     
    lin821, taiwaned, LETTERBOY and 2 others like this.
  6. miles and smiles
    Original Member

    miles and smiles Gold Member

    Messages:
    17,531
    Likes Received:
    61,942
    Status Points:
    20,020
    Long ago I gave myself a rule about this:
    I never lend to any friend or family member unless I am willing to never see my money back.
    This has saved me from losing friendships and ruining relationships within the family.
    If I want to help someone I know, I give them a gift and I let go of any attachments to what they do with that gift.
     
  7. Trout Fishing in America
    Original Member

    Trout Fishing in America Silver Member

    Messages:
    47
    Likes Received:
    38
    Status Points:
    165
    It is my understanding that this advice is wholly correct (even the part about agreeing with the other poster's advice).

    It is my true belief that based on the limited facts presented-- even if you have the money to burn-- you will be doing your relative (who you clearly care about, since you are wanting to help) a disservice by bailing them out. There are times when refusing to help is an act of great compassion.
     
  8. Frequent Freak
    Original Member

    Frequent Freak Silver Member

    Messages:
    427
    Likes Received:
    1,652
    Status Points:
    900
    Give her the $20K... in dollar coins.
     
    lin821, Cody, Casey Friday and 4 others like this.
  9. rajuabju
    Original Member

    rajuabju Gold Member

    Messages:
    616
    Likes Received:
    1,996
    Status Points:
    1,020
    This was my first thought as well. LOL.

    Agreed with previous posters... unless the family member has a reliable job & steady income, you will never see that money again. So either you can gift it away, or, better perhaps, is for them to file BK.
     
  10. marathon man
    Original Member

    marathon man Silver Member

    Messages:
    174
    Likes Received:
    206
    Status Points:
    375
    yes I would go with the coins. then you will have the CC debt for a while but at least that person avoids financial hell for the next 10 years. Ship them the coins and you earn miles in the process. If you cannot order that many at once, there are several ways around this and some may even be more lucrative in the process, so PM me. I think you can PM here. never had success with it.
     
  11. taiwaned
    Original Member

    taiwaned Silver Member

    Messages:
    730
    Likes Received:
    1,678
    Status Points:
    995
    If you are to help this individual, you have everything in writing. It doesn't matter that you are friends or family, make sure that it is on paper what the payment plan will be, what the consenquences of non payment is, how long this arrangement is going to be.

    The banks are unwilling to help her - they consider her to be a credit risk. You should feel the same and set up some basic measures to insure that she will pay you back.

    If you are unwilling to take these steps, then give her the money and do not expect the money back. If you get it back, feel that it was a bonus. Or this relationship is heading toward the rocks.
     
    lin821, LETTERBOY and jmrich1432 like this.
  12. homeyfour
    Original Member

    homeyfour Silver Member

    Messages:
    96
    Likes Received:
    276
    Status Points:
    395
    I agree 100% on the BK, unless you're going to give this to her as a gift. Don't expect the money back. The impact on the credit rating is not as substantial as one might think, especially if her credit isn't too bad to begin with.
     
    LETTERBOY likes this.
  13. RedTape
    Original Member

    RedTape Silver Member

    Messages:
    200
    Likes Received:
    212
    Status Points:
    385
    I'm with everyone that any money you "loan" will end up being a lifetime of birthday, christmas, bar mitzvah and Eid gifts for your relative. That said, I'm not one to use the B word not knowing all the facts of your relative's cunundrum. I would suggest they get in touch with a credit counseling service that will assist them in consolidating debt, and provide what appears to be some much needed consumer education. I can't fathom how people get that far in credit card debt, but I know it happens.
     
    jbcarioca and LETTERBOY like this.
  14. Casey Friday
    Original Member

    Casey Friday Silver Member

    Messages:
    407
    Likes Received:
    695
    Status Points:
    645
    Better yet, don't even use the word "lend." I believe money should only be given to family members, not lent. Even then, there can still be problems. My mother-in-law gave her brother money years ago, and he hasn't talked to her since. Gave it to him. My personal stance is that I will not give money to family if it's asked for.
     
    LETTERBOY likes this.
  15. misman
    Original Member

    misman Gold Member

    Messages:
    13,888
    Likes Received:
    49,369
    Status Points:
    16,520
    If the relative has no assets (like a house,) then I wouldn't bother with the BK.

    Personally, I wouldn't help out because it would probably enable further "bad" behavior as has previously been discussed. Sounds like she needs a behavior change that came only come from her... and it is most likely not impossible. (I say most likely because there are always exceptions.)

    I listen to the Dave Ramsey Show (www.daveramsey.com) rather regularly and hear people that are pulling themselves out of worse circumstances. Perhaps you want to look at some resources there to help your relative pull herself out of debt instead of giving financial help.
     
  16. ahow628
    Original Member

    ahow628 Silver Member

    Messages:
    222
    Likes Received:
    319
    Status Points:
    450
    As misman said, I've seen people get out of worse, as my mom is a financial counselor. My advice is to run fast and run far.
     
    penguin085 and LETTERBOY like this.
  17. jeff4jojo
    Original Member

    jeff4jojo Silver Member

    Messages:
    33
    Likes Received:
    42
    Status Points:
    145
    Don't do it at all. I don't care if you can afford the money or not. You do the person no favor by taking over their debt. Tell me about it. I did it a few times for an adult child. Big mistake. He never learned his lesson and keeps doing the same thing over and over. If he goes bankrupt, so be it. Better for him to face the consequences of his behavior.
     
    penguin085, lin821, sobore and 2 others like this.
  18. Emos-closet
    Original Member

    Emos-closet Silver Member

    Messages:
    233
    Likes Received:
    434
    Status Points:
    460
    Thanks for all the advice my fellow milepointers! Okay, I agree with everyone about the dangers of lending money to family. I always give the same advice to people, but this is my first time really feeling the pressure and being caught in a hard place. I dont think bankruptcy is an option because my relative has assets ( a house that is held in a trust). She wants to sell her house, but it is a tough market...the "loan" would be repaid in full upon the sale of the house. The loan is to save her from all the interest she is being charged . Am I nuts or what?
     
    miles and smiles and jbcarioca like this.
  19. misman
    Original Member

    misman Gold Member

    Messages:
    13,888
    Likes Received:
    49,369
    Status Points:
    16,520
    You asked, so I'll reply. Yes... you are nuts. As has been said, she got her self into the mess, and your help is not going to help her... just enable her.
     
    penguin085, jbcarioca and LETTERBOY like this.
  20. deant
    Original Member

    deant Milepoint Guide

    Messages:
    3,129
    Likes Received:
    12,385
    Status Points:
    10,620
    Has she cut up her credit cards or is she still using them? If the answer is that she is still using the cards, then you have your answer. If she has equity in the house, has she tried for a second - or a refinance? If there is no real equity (after paying closing costs and assuming a realistic sales price for the house) then she will not be able to pay you back.
    She absolutely needs to see a credit counselor and get their advise BEFORE you do anything to help her out.
     
  21. taiwaned
    Original Member

    taiwaned Silver Member

    Messages:
    730
    Likes Received:
    1,678
    Status Points:
    995
    Yes you are in a tough position. If you don't "help" then they feel you are really not a good family member and friend and if you do "help" them, you may not get the money back.

    First of all, they putting you in this position is unfair. It is a no win situation. I have seen familes break down over money too many times. The question you need to answer in your heart is "Is this a monetary decision or a family decision? - which is more important"

    If it is a monetary decision, other posters have been very clear - it is a bad idea.
    If it is a family decision, can you live with the fact the family member may not be able to pay you back and still maintain a good relationship with them? If family relationship is going to be strained to the breaking point regardless then why get into debt AND have no relationship? If this is going to help maintain / strengthen family ties then what is a few dollars anyway?
     
    penguin085, LETTERBOY and jbcarioca like this.
  22. jbcarioca
    Original Member

    jbcarioca Gold Member

    Messages:
    17,507
    Likes Received:
    57,455
    Status Points:
    20,020
    Obviously I agree with most of the posters. I am also a realist. I have helped numerous family members because i have no emotional way to avoid it. Two of them have worked their way out and did not return to bedt, so it can happen. ahow628 has the best key, IMO. Financial counseling can work. In the end I have given money too, but I have tried to make it connect to new disciplines. It is a very difficult thing to do when the culprit is somebody you love. I have lost some good friends that way, but I'd rather do that than be inactive. It is not an easy choice. Either way i don't know how to get points out of the deal. I have had points from buying cars and houses for my deadbeat relatives.
     
    Emos-closet and LETTERBOY like this.
  23. neil
    Original Member

    neil Silver Member

    Messages:
    173
    Likes Received:
    203
    Status Points:
    395
    creditboards.com is a great resource for people in this situation
     
  24. miles and smiles
    Original Member

    miles and smiles Gold Member

    Messages:
    17,531
    Likes Received:
    61,942
    Status Points:
    20,020
    I definitely don't think that you are nuts. But that does not mean this is a wise thing to do. I once did something similar for some close friends who were on the verge of foreclosure/losing their house. My loan bailed them out until the house was sold some months later, and I was paid back in full. They downsized to a much smaller and much more affordable rented house. So, the situation worked out well. We remain close friends. Their financial situation is still tight, but they have very little debt and a frugal lifestyle.
    But as I said above, are you willing to lose that much money if it does not work out? You really need to ask yourself that question BEFORE you loan her anything. And others have pointed out repeatedly, is your relative willing to make changes in her lifestyle/financial situation to keep this from happening again? Otherwise, it is a lose/lose situation.
     
    penguin085, Emos-closet and LETTERBOY like this.
  25. ahow628
    Original Member

    ahow628 Silver Member

    Messages:
    222
    Likes Received:
    319
    Status Points:
    450
    No, just in a bad situation. Honestly, having a future good relationship with this person is not going to depend on giving them the money or not. They could just as easily be resentful if you give them the money (feeling like you are rubbing in their face) as if you didn't give them the money (feeling like you snubbed them). I've seen both happen, fortunately not to me personally.
     
    penguin085 and taiwaned like this.

Share This Page