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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Ocon on May 04, 2018, 08:42:45 AM

Title: Credit Card Hacking To Pay Off Phone
Post by: Ocon on May 04, 2018, 08:42:45 AM
Hi all,

I recently purchased an iPhone 8 like a fool. The payments are 29.99 for two years.

I then rediscovered the importance of Mustachianism. Actually, MMM completely owned my life decisions in one sentence: "If you still have student loans, get them paid off BEFORE you splurge on that iPhone or overseas vacation." I got both but the vacation is already a done deal yet not overseas.

Anyways, I was thinking about opening a credit card for the $150 bonus (potentially $200) to then charge the phone for the $500 to receive the bonus. Apply the $150, then $205 I already have in cash back rewards from my BoA account, leaving me with roughly 100$ to pay off, which I can do easily.

I realize I'll take a credit hit initially but will eventually level out. (My credit is 734). But I'm wondering if this is all fancy talk, or should I just suck it up and pay from my savings to own my mistake.

Once I pay off the phone, I can consider leaving verizon and, in one fell swoop, lower my phone bill from over $100 to $55 or potentially even below.

Let me know.
Title: Re: Credit Card Hacking To Pay Off Phone
Post by: ketchup on May 04, 2018, 08:55:44 AM
Money is fungible and that's likely a 0% "loan."  The mistake wasn't necessarily financing the phone, but buying it in the first place at all (and signing up for Verizon).  I wouldn't bother paying it off until you figure out what you want to do with it post-Verizon, as that's the only real reason to pay it off early.  That or if you are planning to sell the phone. ( )

If you want to do the credit card dance to earn the extra cash to pay it off, that's fine, but it doesn't have to be directly tied to it.  (And you can probably do better than a $200 CC bonus, but that's another topic.)
Title: Re: Credit Card Hacking To Pay Off Phone
Post by: Rosy on May 04, 2018, 01:09:12 PM
I bet it's zero percent - so just pay it until it drops off at the end of your contract:) - why decimate your cash or savings to pay it off?
I was in the same boat and that's what we did, times two:) Every time I got the phone bill it reminded me that a) yay baby - free loan:) and b) do better next time:)

If you haven't already, you may want to pay the monthly bill with a debit rewards card or a credit rewards card that gives you free phone insurance if you use their card to pay your phone bill. Wells Fargo has it on their cc and my credit union has a debit rewards card that I choose to use. T-Mobile charged $10 a month for each, cell phone insurance in case it is lost or stolen or damaged.
So I saved twenty bucks a month by doing nothing more than changing my payment method.
Love auto pay and rewards cards.

Title: Re: Credit Card Hacking To Pay Off Phone
Post by: Ocon on May 04, 2018, 05:36:41 PM
The main reason for paying it off as soon as possible is to free up the $30 to put towards my loans now. On the other hand, Iím working out a 1 - 2 month plan to eliminate ~6500 in debt that the ~$510 could help out more with now. Crushing a loan that acquires ~$40 interest would, to me, be more viable than crushing the phone. However, if I do the credit card dance, I might be able to pay off the phone and loan in roughly two months anyhow.

But youíre right, it is 0%. Iím just annoyed I bought it in the first place. Especially since Apple seems to have top secret batteries available which I wouldíve bought instead.