i am looking for funding sources to buy a big working forest and have been reading that people can buy a piece of property worth millions of dollars as long as they have a way to pay it off. any people have an opinion on this? if i were to try this i would shield the debts with an llc and use the credit card to buy a big forest and sell the development rights and also have a forester work on a contract and get paid from the timber sale money and the logging would be fsc certified to off set the higher costs of sustainable logging.
The interest rates on credit cards are typically very high and if you look up the cost of such debt, it's astronomical. Even a low interest rate loan will end up costing more than the amount borrowed if payments are stretched out over years; that point is reached far more quickly at credit card rates.
If I were going to do that I would explore every other option first, including a personal loan from a credit union (assuming a mortgage isn't a possibility), and even just waiting a bit and saving money.
Since there are usually fees charged to the merchant when you use a credit card (typically ~2.9%), merchants are usually reluctant to let you use them for big purchases. For example, about a year ago a tried to buy a $15,000 car on a credit card (2% cash back, yay!), however the dealer balked at paying $435 in credit card fees and limited the amount I could charge to $5000.
If you do decide to use a credit card then make sure you have at least a second one with a competing bank to move the balance if need be. I used to work for a large credit card company and they are pretty slick with all the reasons to raise your interest rate. Take advantage of balance transfers with low rates. I have seen people save a lot of money that way using the banks to compete against each other. But you have to have the open available credit to move the balances around. Don't get caught with no where to go. The bank I used to work for would periodically check your credit. If they found that you didn't have enough open lines to move your balance then they raised the rate. Shady...
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