and get cash back
What is the highest interest rate you have been charged for borrowing money? For some of us, credit card companies might have caught us with 15-30% interest at one point in our lives (hopefully one got out of such vicious debt quickly.) After wising up, we don’t fall into these exorbitant interest rate traps but nearly all of us still can’t avoid the federal government’s charging us 7% interest rate + up front loan origination fees (1-2%) on student loans.
On the flip side, have you ever dreamed of
borrowing money on NEGATIVE interest?
In other words, getting PAID to borrow money which you can apply wherever YOU see fit? This post will share my experience on getting 31% negative interest for my 2016 grocery bills!
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Discover has been running lots of campaigns to gain greater share of the lucrative market of consumer lending, especially via credit cards. One of the most amazing deals Discover offered was to give 10% cash back when you use Apple Pay+ Discover credit cards to make purchases.
On top of that, Discover offers DOUBLE the cash back rewards for the first entire year if one opens a new discover card. The second set cash back credits a month after the anniversary.
I can’t miss out on such an amazing deal! 20% cash back on my purchases and 0% APR for the first 15 months on the debt balance!
Interest free money provides fantastic leverage (to pay off 7% student loan, to fund 7-8% annualized return retirement accounts, even to pay down 3.375% mortgage).
This is Negative 20% interest for whatever purchase(s) I make which becomes a standing balance which I only make minimum payment monthly, until I pay the whole balance off right before the interest rate hikes (introductory APR 0% gets its ugly 15-20% APR after the first 15 months).
So how did I get negative 31% off of my $3600 purchase?
On the first Wednesday of every November, Sprouts Farmer’s Market (where I do most of my grocery shopping) offer their gift cards 90 cents on the dollar. I know I have a family to feed and sometimes co-workers too, I went ahead and bought $4000 worth of Sprouts gift cards. I never have $4000 cash in my bank because I like to put my cash to work (pay down debt or invest.)
Thanks to Discover, I could afford to buy $4000 worth of Sprouts gift cards and enjoy paying just $40/month payment until the 15 months of 0% APR is up.
So here’s the math. I charged $3600 on my Discover it credit card and got $4000 of Sprouts gift cards for grocery. Discover gives me $360 back after the first statement cycle, then gives me another $360 back after my first anniversary as a card holder.
My total savings:
$400 discount off of Sprouts gift card
$720 cash back from Discover
= $1120 grand total for $3600 I borrowed
= Negative 31.1% interest for 15 months
All for just a minimum payment of $72/ month (generally my minimum payments are 1-2% of the total debt balance I carry on each card).
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Since Discover literally paid me 31% interest to borrow money from them. There’s no reason why I won’t put the freed up cash flow into my retirement to earn me long term annualized 7-8% additional gain.
That’s debt leverage. If big banks can borrow at 0% interest, why shouldn’t little people like us who devoted most of life and money to get higher education get a little break?
Although the Apple pay 10% deal is currently off the table, you can still get 5% cash back in rotating categories. To couple that with the ongoing deal of double cash back on rewards accumulated during 1st anniversary of card opening. You still get rewarded 10% cash back for borrowing money from Discover!
I’ll be on the look out as well, and let you know if Apple Pay 10% cash back ever returns. There is talk of it, but rumor is rumor until it happens.
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- Have you ever borrowed negative interest money? How did you do it?
- If you were to free up $4000 of cash flow for the next 15 months, where would you put that $4000? Investment? Student loans? Mortgage?
- If you want to start taking advantage of the 10% cash back (still available right now), use my facebook link to apply. This way you will get an additional $50 cash bonus with your first purchase. DWM gets $50 too if you get approved!
Comment below and share you experience in leverage debt with NEGATIVE interests!