Using lines of credit to purchase cards

[HOF Auto Rookies]

Does anyone here take out like a line of credit from their bank, or home equity to purchase cards? Was just curious who has, and if it's worth it...

[cubsguy1969]

I've thought about setting up a line of credit for my ebay collectibles business (I sell books/old paper/records/sports stuff/whatever I can find at estate sales) but I haven't explored it. I'd be interested in hearing other people's experiences, too.

It'd be nice to have a line of credit available if I stumble across any big collections.

[dstraate]

Yikes! That would be about as big a NO NO as I could possibly come up with. Then again, I'm a collector and don't view cards as a business. When you start financing, there's an additional layer of cost that you'd need to recoup to break even.

Furthermore, in the realm of cards, it opens you up to going overboard. I think everybody's cruised auctions and thought. "If money was no option, this is how I'd spend 50K on cards" unfortunately, a home equity loan would allow you to think like that, at the cost of your long term security.

[glynparson]

It costs more than you think, you need to make sure that there are large markups, or very quick sellers. It is not as advisable as it was when the markets were hotter and prices less volatile.

[T206DK]

Does anyone here take out like a line of credit from their bank, or home equity to purchase cards? Was just curious who has, and if it's worth it...

Pretty risky if you ask me...unless you are already wealthy beyond measure

[FrankWakefield]

A very bad idea. Unless someone has a huge, reliable cash flow so that the line of credit can be completely paid very soon.

[zljones]

I will be so bold to admit that I had zero credit debt, then went back to card collecting now I owe $8,500 on one credit card, about $1,000 on another (both maxed) and I also opened that Bill Me later thingy from Paypal and pretty much maxed that. No way would I take out a second mortgage or anything crazy like that. But three maxed lines of credit it harsh and wreckless, I recently said that I will not make purchases over $200 after I get a N29 Buck Ewing, so I can pay these debts back. My credit score also dropped below 700 from 770 at one time because of maxed cards. I pay all my payments, but because I keep using them, it keeps my score down.
I know I am stupid for being impatient and dealing with credit cards. But I also do not regret what I have, but now it's time to buckle down and pay this stuff back. N29 Buck Ewing will be my last large purchase.

[3-2-count]

I have never and will never purchase anything card related on credit.
If I ain't got it, I don't buy it. It's that simple!!

[sportscardpete]

I follow this rule - if you don't have the cash at the moment, don't buy it!

The only thing I have done is asked a potential seller to wait a few weeks until I could purchase the item with a recent pay check or something.


For economic buffs, this is called the "Swabian House-wife" mentality.


http://atlasnetwork.org/networknews/2008/12/12/the-swabian-house-wife-and-financial-policy/

[ctownboy]

I think a line of credit or something similar would be good to have as a fall back option and nothing else. What I mean is, something to be used only if neccessary and only for specific instances of finding something good or in large quantity. Not just because you feel you HAVE to have it.

Back in the early to mid 1990's, I was in college and actively looking for cards and memorabilia. Because I was actively looking, I found some nice things: stacks (30 or more in a stack) of nice B 18 blankets including Walter Johnson, Ty Cobb and brown infields for $300 to $400 per stack, 1000 N cards (yes, 1000 cards) including N28's of Clarkson, Keefe and Caruthers plus Wild Bill, Annie Oakley and others for $3,500 dollars, about 50 early 1920's baseball cards including about 20 Curtis Ireland Candy cards with a TY Cobb for $1,000 dollars, a nice Kalamazoo Bats common card with the advertising back for $500 dollars, plus numerous other things.

The problem was, I was in college and didn't have any money and my parents wouldn't loan me money to buy cards. So, I had to pass on these deals.

Just think, for about $7,000 dollars, I could have had at least half a set of B18 blankets in nice condition, an almost complete set of N28's (missing mostly the baseball players) plus some doubles and complete sets of game birds, chickens and some other non-sport cards, one of the largest collections of Curtis Ireland candy cards known. and a nice condition common card from a hard to find set.

To me, if I had a line of credit, those would be the type of deals I would use it for. I would NOT use it for, say, going on eBay and buying individual B18 blanket commons for $20 each or individual N28 cards for whatever price per card.

David

[Jaybird]

I have never and will never purchase anything card related on credit.
If I ain't got it, I don't buy it. It's that simple!!

I'm with you, Tony. Hobbies for me are funded by extraneous cash, not rent money.

[zljones]

I have never and will never purchase anything card related on credit.
If I ain't got it, I don't buy it. It's that simple!!

I will be following this rule very shortly, and it's a good rule I used to follow in life. I just have to learn how to control a hobby which I never had til now. I had such good credit built up from being careful all these years, and such high limits that I went nuts. What helps is the fact that I have no more high end cards on my want list, except N29 Ewing.

[David W]

Pretty risky if you ask me...unless you are already wealthy beyond measure

In which case you don't need the line of credit........:o

[e107collector]

I guess I'm the minority in this thread. I actually just got one a personal line of credit a few months ago for $25k. I was approved in 2 hours. The interest is very low, and there are no annual fees. I haven't used it yet.

I have it in case one of the tougher cards I want comes up for sale, and I don't have all the cash to purchase it. I will use my line of credit, and just make a few monthly payments.

Just my opinion

Tony

[zljones]

I guess I'm the minority in this thread. I actually just got one a personal line of credit a few months ago for $25k. I was approved in 2 hours. The interest is very low, and there are no annual fees. I haven't used it yet.

I have it in case one of the tougher cards I want comes up for sale, and I don't have all the cash to purchase it. I will use my line of credit, and just make a few monthly payments.

Just my opinion

Tony

Even though I messed up my own credit, I do know how credit works because I worked in the credit repair business a few months ago. Use that card but make sure it is for one purchase at a time, then pay it off or at least pay it in a few payments. A few payments is better actually. Use the rule of 30%. If your balance is above 30% of your limit it hurts your credit, if you keep it on or below it improves your credit. I did things stupid, but I knew what I was doing, but I have knowledge of the workings of credit. Just use that card in moderation and do not go nuts don't be dumb like me.

[HRBAKER]

IMO, if I have to finance something it's crossed the line from a hobby into something else.

[glchen]

I'm w/ the crowd that thinks it's too dangerous. It is always very tempting when you see a card that you really want, or one doesn't come around very often or even one that you think is underpriced and that you can do a quick flip on. However, it's very easy to get yourself into unsustainable amounts of debt very quickly, and then you need to do a firesale on your cards where you lose even more money. As others have said, it's best to just spend what you have.

[cubsguy1969]

I'd be afraid to use a credit line for collecting -- too much temptation (for me anyway; I'm a weak man). But for business purposes, it seems like it could be beneficial. My ebay business is fairly small and I don't typically have a lot of cash on hand. So if I should stumble upon a large collection of cards or books or records or whatever, and the price is right, I'd hate to miss the opportunity.

A couple months ago I bought a huge collection of those Easton Press leather bound books for 2 grand. In that case, I happened to have the cash available. But if I didn't, a credit line sure would have been helpful. I sold the collection for nearly 6 grand within a month so I would have been able to pay it off pretty quickly.

I guess we're talking about two different animals. Or at least I am. :)

[rainier2004]

So I use credit now...

We have an interesting situation in that I have access to the majority of our retirement, anytime, without penalties for 30 days. Im not a CPA, and this is personal, its just the way its CURRENTLY set up.

I have used this "credit" 3 times...2 5k+ CJ lots and a couple e107s. This credit is my only advantage in the market. I can bid lots for what I think they are worth. I had to resell tons of cjs to put the money back, plus I make the payments as well. The e107s we kept. The first CJ lot took 6 weeks to finish, but after 4 weeks the debt was well below 1k and the fees were small. Im am now 10 days into experiment 3 and things are going well and really hinge on the sale of a single matty. I cannot afford to pay 65-100 for a cj common as they are all over the place now, and my fee were a couple bucks. BNow, I can buy 50 or 60 cjs and sell those i dont need for a fair price and pay the rest for what I keep and I always get to decide what I keep. I also downgrade my set, if appropriate, and am just trying to make it to 177(I count the Chance as part of the set). I do it to fuel my hobby...I dont buy cards to make money, but I want my cjs so this idea was the result with the best results.

It was scary the first time, this time I had a $6600 debt and didnt bat an eye. It bothers me somewhat that I feel there is always an angle now...but Ive met tons more great guys on here(Hola Jared, David, Mac, Andrew, Toby, JR and Mr. Barry :cool:) doing this and enjoy selling cards as well as it fulfills the fix for me. I would NEVER buy a card "because i just had to have it" but honestly, I wish I had started doing this earlier. :)

[zljones]

So I use credit now...

We have an interesting situation in that I have access to the majority of our retirement, anytime, without penalties for 30 days. Im not a CPA, and this is personal, its just the way its CURRENTLY set up.

I have used this "credit" 3 times...2 5k+ CJ lots and a couple e107s. This credit is my only advantage in the market. I can bid lots for what I think they are worth. I had to resell tons of cjs to put the money back, plus I make the payments as well. The e107s we kept. The first CJ lot took 6 weeks to finish, but after 4 weeks the debt was well below 1k and the fees were small. Im am now 10 days into experiment 3 and things are going well and really hinge on the sale of a single matty. I cannot afford to pay 65-100 for a cj common as they are all over the place now, and my fee were a couple bucks. BNow, I can buy 50 or 60 cjs and sell those i dont need for a fair price and pay the rest for what I keep and I always get to decide what I keep. I also downgrade my set, if appropriate, and am just trying to make it to 177(I count the Chance as part of the set). I do it to fuel my hobby...I dont buy cards to make money, but I want my cjs so this idea was the result with the best results.

It was scary the first time, this time I had a $6600 debt and didnt bat an eye. It bothers me somewhat that I feel there is always an angle now...but Ive met tons more great guys on here(Hola Jared, David, Mac, Andrew, Toby, JR and Mr. Barry :cool:) doing this and enjoy selling cards as well as it fulfills the fix for me. I would NEVER buy a card "because i just had to have it" but honestly, I wish I had started doing this earlier. :)

That is smart as hell and it boosts your score tremendously. I have never thought of that idea. It's too late for me, but man keep at it, that is very smart, I do not know if you checked your credit score lately but you may have a score above 800 doing things that way :)

[HOF Auto Rookies]

I do not have a personal line of credit, no need for one. I feel I am doing very well with my spendings and limitations, and as much as I hate it, I'm trying to sell more cards :eek: to help upgrade or add new pieces to my collection. Got hit hard get a very nice signed 1940 PB of Ted Williams and Mays, Aaron and Koufax signed rookies.

If something comes up that I HAVE to get for my collection, I will consider a line, or borrow from someone. But can't imagine using thousands and thousands of dollars. The thought is too scary that it'll get out of hand into something worse.

[Ronnie73]

I've never used a line of credit for collectibles. I'm neither for or against it. If it's used on the right purchases, a profit could be made along with paying the loan off. I tend to ask if a layaway plan is available if its a high priced card or large lot. You would be suprised at how many of the larger sellers offer it. Some at no interest if paid within three months, others that have interest around the same rate as a line of credit. It never hurts to ask if a layaway plan is offered. Worst thing that could happen is they tell you no. Another nice thing is that it does not mess with your credit score.

[Gradedcardman]

I have aline of credit should it become necessary. This hobby is also a part time business for me. I love the hobby side but I use it to make money as well, just ask paypal !! Haven't used the LOC as I haven't found that "big deal" where the extra was needed. But I won't hesitate if I need it.

[cubsguy1969]

Would you mind sharing how you set it up? Is it a business line of credit? My accountant mentioned the possibility to me once but I have yet to pursue it. It's on my (long) list of things to do.
From the sounds of it, it wouldn't be difficult. My credit's pretty good, so I don't think there are any worries there.

[iwantitiwinit]

If you don't have the money to buy it now you don't "have to have it". In all but the rarest of cases the card(s) you are looking to buy will be available in the future. Buy it then when you have the money. If you are collecting the rarest of the rare you probably don't need a line of credit to begin with. A line of credit to buy something with no true intrinsic value is a very bad idea.

[steve B]

I've sort of used credit a couple times.

About 2 years ago there was a batch of cards from a really tough non-sport set that I really went after. That put a bit of a pinch in the budget as it came during winter when we run about 1K a month for oil.

So the credit line was used to cover the extra expense.

I hated doing it, but it really was a "once in a lifetime" sort of deal. And those almost never come along anywhere near my price range.

In the end, I wound up completing the set. And I've heard that it's the first complete set. (Something like 4 of the cards were uncataloged out of only 20)

Most other stuff will come along again, so I just won't use credit of any kind for it.

Steve B

[rdixon1208]

I'd never buy cards with a credit card. I'd end up using the money that I was supposed to pay the card bill with to buy more cards. :eek:

[johnmh71]

I don't think it is a bad idea if you do it right. Bill Me Later has helped me buy some things by allowing me to float the payment. But I have never maxed it out and I always pay to avoid any type of interest. If you are able to do that, then you are the one that comes out of it with the better end of the deal.

[HOF Auto Rookies]

Would you mind sharing how you set it up? Is it a business line of credit? My accountant mentioned the possibility to me once but I have yet to pursue it. It's on my (long) list of things to do.
From the sounds of it, it wouldn't be difficult. My credit's pretty good, so I don't think there are any worries there.

It literally takes a couple minutes. You just put in an application at your bank via Wells Fargo, US Bank and it generally lets you know if you get approved or not. I do not have one, but have thought about it.