Thanks for helping answer a bunch of questions Border!
Going through the thread now, let me know if I missed your question.
Given the risk, it's probably a good idea to not put the oldest card in this scheme - as the closure of that could adversely affect my credit score. But the ones opened in 2001? Eh, at this point - why not?
Yeah, you can always keep your oldest one(s) out, and use some that are newer (but still older than 2 years). The older it is, the more likely someone is to purchase it, but you get paid based on the credit line, not age.
And like I said in the OP, even if it's closed, it stays on your account for up to 10 years, so it won't affect your credit score being closed (aside from available credit/DTI) for a long time, plenty of time to get other cards.
Definitely only do what you're comfortable with, but I'm a fan, and I figured others may be interested, too.
Might be a good way to keep getting value from those cards.
Exactly. In fact, I had two that just hit their second year, I enrolled them, but was debating cancelling (had $95 annual fee), then I got two orders on one of them. Decided to keep them both.
I would absolutely love to do this, but my husband works directly for one of the major credit cards. We try to use their cards exclusively.
Yeah, I wouldn't violate the terms of service of a CC company if they're your employer. In the scenario above ("Would you take 50-100k to close old CCs), the risk is you have a few old CCs closed. Big deal. But add "...and lose your job" and it becomes "nah." Just not worth risking your job, most likely.
If you are knowingly violating your credit card company's terms of service, how is that not unethical?
I knowingly violate a LOT of terms of service. You probably do as well, knowing or unknowingly.
Ever shared a password to a website with anyone (Netflix is a common one, but even something like your email, or Facebook, or bank account, with your SO even)? You can't do that, per their terms of service.
If a company put in their TOS that I couldn't donate money to starving orphans (or to a certain political affiliation, or whatever), I'd click "I agree" and then ignore it.
Whatever is in "Terms of Service" isn't automatically ethical, or not. I can see the argument that you should just not agree, and not use that service, and if that's your position, that's fine. I think there's a lot of things then that you'll need to stop doing that you do today.
I think there's a difference between legality and morality (a common philosophical debate), and I think there's a HUGE difference between terms of service and morality.
If you think this is unethical, that's fine. I absolutely see the arguments for it being so (one of them being that it violates TOS). I'm just saying that no, I don't find it unethical, and it being a violation of the TOS doesn't automatically MAKE it unethical, for me. :)
Do you have any information about AUs on business credit cards?
No business cards, sadly--they don't report the same as personal ones, so they don't work.
I think it works great no issues on my end so far. Have a bunch of cards turning 2 next year as well. Estimate monthly now is 600. When those cards hit it will be 2100
Awesome to hear!
I've been doing this for about 6 months with no problems so far.
Thanks for the confirmation! :)
My two oldest cards are US Bank and AmEx. Neither are on your list of cards - do you have any idea if they would work?
US Bank, yes. Amex, no.
Sounds cool, one question. Do you get paid right away when you sign some one up as an AU, or do you have to wait some period of time before they give you the money?
There's a month lag. Obviously there's no way for them to know that you actually added them until it shows up on the other person's credit report. So you add them, a bit later the statement closes, a few weeks later it's on their report, and then you get paid.
Also, since its 1099 income, what are the tax implications? I'm not familiar at all with 1099 stuff. Do I need to with hold taxes, or do they do that for me? And if I need to, how much do I need to hold back? I like money, but I hate tax surprises at the end of the year...
Same as any other side-gig income, at your marginal rate.
This is a thread right now on r/churning, what do you guys think of this comment?
I know a few of you guys are getting paid for credit piggybacking. I was doing it for several years, but started hearing about friends who have gotten warnings. Citi recently sent my friend a warning that everyone he had added through the credit boosting agency as an authorised user was fake, and didn't exist. So some of these companies may be intentionally defrauding banks by creating fake people as part of an identity theft ring. I'm thinking they may be children's SSNs or dead people.
I mean.. I suppose that's possible?
I'm skeptical. If it were true, I think they'd post a copy of the letter received (that's the sort of thing they would send registered mail, not via a casual phone call or something), w/ info redacted if necessary.
I wouldn't be surprised if it was FUD from someone who doesn't want it to become popular for fear of the market getting flooded, so they make up a story.
I also think ID theft is so easy/cheap nowadays (vis-a-vis the Internet--I've read in various articles talking about ID theft that you can buy a stolen ID/credit card for something like $40 on the Internet) that I don't see why someone would pay money to this service to get credit for someone that doesn't exist or is dead, or whatever, when you can easily and cheaply get REAL IDs. So that's a second reason I'm skeptical.
I'm of the belief that 100% or more are people exactly like what I described in the OP--people looking for a temporary boost in their credit--and I'll think that until given real reason to think otherwise. If and when that happens, I'll reevaluate.
This is very interesting, and I've never seen it before. I have two ethics questions.
1) You are representing this person as an authorized user of your card, when in fact you are never authorizing them to use the card. Isn't this straight up lying?
2) Similarly, the person using the service is representing that they are an authorized user of the card, when they aren't. Isn't that person similarly lying? And aren't you facilitating that person misrepresenting their credit worthiness?
Interestingly, I think many of the ethical questions would disappear if you actually allowed the authorized user to use your card for some period of time.
They ARE authorized to use it, for that month or two. They just have no means to actually use it (they have no card, and no way to get one). How is that lying? I did authorize them to use it, and two months later I unauthorize them.
Also, even if we decide that it IS lying, is lying always wrong? In a Kantian view, probably. In a utilitarian, certainly not. If I'm helping these people save interest over the greedy banks, it might be more moral for me to lie (if it helps lift them out of poverty).
We can have some fun ethics debates around it, for sure. And I can see why one might find it unethical, like I said.
If you do, definitely don't do it... it's not worth compromising your ethics for money. :)
This strikes me as really sad for the people buying the AU spots. I don't feel particularly bad for the credit card companies, because, as you say, they have recourse if they don't like you doing it. (And TOS are not written with customer's best interest in mind). But I couldn't in good conscience enable other people to go into (most likely) bad debt quite so directly for my own gain. But that's just me, I guess.
Everyone has their own comfort zones. Personally, it's the $1000-$3000+ that the "customers" are being charged that gets my ethics radar ringing. Rebs seems to think that all parties are entering this arrangement knowingly, but I can't help but think there is deep despair that's being taken advantage of.
So this question by spicykissa was the only one I answered out of order (moved down to the end), because it grouped nicely with Paul's.
Here's the thing about it, to me. These people are in a tough situation, no doubt. They have bad credit, and are trying to buy something.
But to me, this is helping them. First, think about the alternative if they don't do this. Do I think they'll go "Oh, the interest rate is 18%, guess I won't buy it."? Of course not. They're going to buy it regardless.
But if they know about this, they can boost their credit and get a reasonable rate. That might be the difference between them being able to make ends meet, or not.
I know exactly what you two mean about their end of the transaction being potentially evil. I absolutely would not fund a payday loan place. They're predatory, and unethical. The vast majority of the time, people are digging themselves in deeper, and the tactics used are scummy.
But this actually seems like the opposite of that--a flat fee, which gets them a lower interest rate and saves them money?
So I don't feel unethical from the standpoint of thinking about them, because I do actually think it helps them. I might be wrong about how it ends up helping them, or not, but that's how I picture it, and this service allowing them to pay a flat fee in order to avoid usurious rates is a GOOD thing.