It really depends on your comfort zone. If you have sufficient faith that the price of silver will skyrocket, then it is no different to buying at 9 - 22% (depending on the method you use to finance), over spot in a worse case scenario. Buying at 22% over spot is happening around us at all times without borrowing! Lots of people buying silver at over $33 an ounce with spot at below $28. If you are debt free and borrowing does not threaten your "core" investment (property), I would suspect that most people can handle that fairly easily and still be within their comfort zone providing that they have the resources to service the loan. Of course I am not talking about negatiive gearing and / or other tax implications. The big advantage you have is that silver is highly liquid and can be converted into fiat quickly. You can even speculate with a credit card, buy taking advantage of up to 55 days interest free and paying your card off in full every month. For example. CC monthly cut off date is 21st of the May. Buy silver on the 22nd of May and actually pay for it on the 17th (approx) of July! It may be to your advantage to buy larger bars as they can be purchased with lower premium. Really depends on your comfort zone! Would I borrow to buy silver in the current climate!
Issue with credit cards is that you have to buy from a dealer, and they all charge 3%~ for the luxury of using the credit card... which places you further down on your investment.
Not all dealers will charge 3%. However, even if they do, providing the price is right it can still be an option to buy with cc. e..g. spot at 27.45 Dealer A: 1 kg available for $924 add 0% for cc = $924. Dealer B: 1 kg available for $935 add 1.7% for cc = $951. Dealer C: 1 kg available for $924 add 3.0% for cc = $952. Dealer D: $924 Does not take CC - does not get sale! Bold are deals availabe now! But to makke it work, you pay the card off in full when payment is due in mid July! Therefore no interest charge from CC co.
Many dealers are shooting themselves in the foot by not accepting CC payments which can be as low as 1.7% (Ainslie). In my world I try and buy everything on CC for Frequent Flyer points! I always pay off my cards in full.
Would all depend on the interest rate of the credit card for me. Personally I hate debt and would be very very reluctant to do it. It's one thing to put $1000 of my money into silver and it drop heaps and leave me with $400, it's a whole different ball game to max out a 10k credit card and have spot drop to leave me with $4000 worth and $6000 debt at 20%~ (I don't know what credit card rates are, never had one)
If one was to borrow to buy PM the better option would be a personal loan through a credit co-op and not a CC. Co-op rates can be as low as 8.79%.
Some CC offer the 6mths balance trfr at very low rate to nil. The downside you have to go through paperworks. Or else, buy so call 'paper' silver via igmarket
just need to choose the correct card, one with 5% cash rebates, preferable without limit, but CC company will limit the amount per quarter or pa... with this, we can still be ahead
I thought for a minute there you said you were contemplating boworing money to buy silver hello errrr no not bad if your paying the card off when the statement arrives but not to pay monthly, the interest wipes out some of what youll make
Nay for me. I would not go into debt for physical silver or gold. To me silver and gold is a storage of wealth outside government backed currency first and an investment second. Ask yourself this, if you borrow 10k are you bullish enough that it is going increase enough in the time that it takes to pay it off that you wouldn't have been stacking it over time instead and it costing you less by the time you factor in interest and fees.
Three year old thread guys... Guys talking about taking $35k loans on CCs at 18% to buy silver at US$46/oz. Claiming it's a no lose situation, as the can just hold until the price recovers. If you did that and were holding until now, you'd have a $57k CC bill, and a stack worth $14k. With today's hindsight, I think the answer to the thread is a resounding NO.
Missed the fact that someone had mined this thread... Worth bringing to the surface to show people how careful you should be with your investments.
That was then, this is now, it may not be such a bad idea, like if you did it at the time this thread was revived, an hour ago, silver was US$19.10, now it's $19.50, 1 hour 40c an oz profit, enough to cover 1st month interest already.
Only if you could buy at spot and sell at spot. If you buy silver and price doesn't move at all, a sale will most likely put you at a loss
