Pay in full or use credit card?

[srvrf]

Originally Posted by TonyD

Here's the weird part about a credit card. I have a few cards, don't carry a balance and have an excellent credit score. Whenever I use a card to buy a new watch my credit score actually goes DOWN about 20-30 points!



The reason stated is credit usage but the amount is insane. I'm not going to give the real numbers but the % of available credit used jumps from something like 3% to 5%. Its get paid off the next month and then slowly over the next 6 months my credit score creeps back up.



I understand the idea, but its not like I'm suddenly using 90% of my available credit. How does even a 10% jump in ONE month justify a score drop?



The credit score formula and industry is absolutely bonkers......

Yeah I get credit score updates and look at them but don’t try to make too much out of them. Timing plays a role too. I pay off everything but there are times when our credit balance can be $15k, especially when we’ve booked travel. So despite it getting paid off monthly, it can look like we are using “too much” of our credit vs. nearly “zero” once we’ve paid off the balance.


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[dtwer]

Sorry to say but what kind of question is this? No no no no no.., you don't pay cash on this kind of thing.

I open a new credit card with 18 months no interest, buy the watch on the card, and pay the monthly minimum during the 18 months.

When the interest free period ends, I take out a HELOC to pay off the card, and continue to pay the monthly minimum.

This way I think I can pay off my beautiful Rolex in, say, 23 years.

This is how you roll, baby.

[daOnlyBG]

Originally Posted by stateman

Yes, it simply is illegal to not pay sales or use tax upon an otherwise taxable purchase in your home state. If you are lucky enough to live in one of the 5 states that don't have a sales tax, more power to you. But for the rest of us, avoiding sales tax collected by the seller does not obviate the legal requirement to self-assess and pay that tax in your resident state.

Believe it or not, I'm not trying to tell you what to do. I don't live my own life in perfect accordance with all rules and regulations. I just find it different and a bit odd to recommend someone else to do something that doesn't actually save $ is they were to follow the law.

You know what, you might be right. I'll ask a lawyer or something.

But I do find it interesting that we now have a "tax nexus" implemented to discourage this, which implicitly allows retailers to avoid sales tax (to a limit)- thus having the government acknowledge that retailers are not charging sales tax simply by shipping to another state. So you see where the slight confusion develops.

[Duende01]

I pay with credit card only to take advantage of the reward points and pay the debt in full before the billing cycle. However, sometimes I have been able to use the rewards as a leverage to get an additional discount on the purchase price. For example, in Europe it is customary that the business pay 3.5 to 5% as a transaction fee to credit card companies. If they want to save that fee and agree to give me the discount in the amount of their fees, then I pay with cash.

[Saltzy]

I still was my on 0% APR introductory period on my Freedom card, so I got the best of both worlds.

Used the card and got a ton of points, and then paid it off over 3-4 months without a penny of interest.

[Dlong]

Just bought a Zenith El Primero and the AD wanted CC. No additional fees. You want the points, right? He said. Sure do. When I purchased the 2 Rolex back in October 2017, it was check because of the discount. No problem.

[whatsthetime?]

Originally Posted by BumbleB

My opinion: If you can’t pay in full don’t buy it. It’s a luxury product, not a necessity.

Yeah, pay cash so you don't have a CC company backing you incase of an issue, lose money on points and don't take advantage of 12-18mos 0% interest. Using all of these benefits is smart and doesn't mean you don't have the cash to buy a watch.

Originally Posted by JMTE

Exactly.
I have also used a credit card with 0% interest for an 18 month period and invested the cash I would’ve used to pay if off to scrape interest. I got about 2% cash back on the purchase with the card, shipped out of state to avoid sales tax, and earned about 3% on the cash until the balance is due.

I don’t think people would recommend that but it worked for me, ended up saving me thousands (tax, interest, cash back) off of the price.

+1

[F33A]

I see that you all seem to be talking about buying from Ads. I just bought a platinum Day Date from a "trusted dealer" and elected to send a wire to avoid the 3% premium on an Amex transaction. It was a noticeable saving and I don't need the miles. Don't ask about the sales tax.

[stateman]

Originally Posted by daOnlyBG

You know what, you might be right. I'll ask a lawyer or something.

But I do find it interesting that we now have a "tax nexus" implemented to discourage this, which implicitly allows retailers to avoid sales tax (to a limit)- thus having the government acknowledge that retailers are not charging sales tax simply by shipping to another state. So you see where the slight confusion develops.

It is definitely a confusing area for consumers. And generally hardly ever worth the $ for govts to pursue enforcement action against individuals (vs retailers). Sadly I am a tax attorney so at least I get paid for this crap

[MariettaMike]

I use credit card then pay in-full when bill from credit card arrives as I get credit for a large purchase with zero interest.


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[Syed117]

Card for points. All card balance paid off at the end of every month.

If you can't pay it off in full, you can't afford it.

[ByronB]

I agree, I always use my AmEx charge card for the points and pay it off when the bill comes in. Works great at an AD, but that doesn't work with gray's though because they will charge you the extra percentage.

With that being said, a friend of mine was lucky enough to have to choose between a white or black SS Daytona back in 2016 that Tourneau had in stock! He was offered 0% for three years, so he took the white face at 0%/3yrs. I think he came out better than with the the AmEx points, because he got to use their money for free. Not a bad deal, especially knowing what his watch is worth now!

[locutus49]

So if I understand millennials correctly, cash is bad and credit is good. Okay, got it.

[904VT]

Originally Posted by Pantheon

Can't see any benefit in using cash if you can pay in full

Saves your AD the credit card transaction fee which in turn should help them help you more often. I try to look out for small businesses, which is what my AD is and they usually return the favor.

[wb55]

Pay on credit card for the rewards then log in and clear the credit card in full a few days later once the charge has posted.

[beshannon]

Originally Posted by 904VT

Saves your AD the credit card transaction fee which in turn should help them help you more often. I try to look out for small businesses, which is what my AD is and they usually return the favor.

Aside from the Federal cash reporting requirements, handling that much cash is a problem for a business and their bank is charging them when it is deposited into their commercial account to handle it as well.

I have spoken to several AD's who said they do not want to deal with the cash.

[904VT]

Originally Posted by beshannon

Aside from the Federal cash reporting requirements, handling that much cash is a problem for a business and their bank is charging them when it is deposited into their commercial account to handle it as well.

I have spoken to several AD's who said they do not want to deal with the cash.

Speaking debit transaction vs. credit. Debit should save your AD money. I agree with physical cash what you said.

[DonRickles]

Originally Posted by beshannon

Aside from the Federal cash reporting requirements, handling that much cash is a problem for a business and their bank is charging them when it is deposited into their commercial account to handle it as well.

I have spoken to several AD's who said they do not want to deal with the cash.

While I am not condoning this behavior I witnessed my A.D. split a just under $20,000 cash payment into two separate purchases...

So there’s that....

[Harry-57]

Accidental post.

[Calatrava r]

Originally Posted by locutus49

So if I understand millennials correctly, cash is bad and credit is good. Okay, got it.

I do not believe anybody has said that. Everyone agrees incurring market credit rates for anything but emergencies or necessities is a shame and a problem. All folks are saying is they take advantage of the ease of buying with a credit card and some take interest free terms when available. How do you even pay with cash. Unless you know the dealer they probably will not take a check for immediate release of the watch and over 10K in cash prompts a filing with the Federal authorities in the US.

[daOnlyBG]

Originally Posted by stateman

It is definitely a confusing area for consumers. And generally hardly ever worth the $ for govts to pursue enforcement action against individuals (vs retailers). Sadly I am a tax attorney so at least I get paid for this crap

Well, shit.

But really- just about every authorized retailer I've spoken with freely admits to shipping out of state to avoid tax. If this is indeed illegal, I would expect their store policy to discourage this, so they wouldn't be held liable.

I understand a one time purchase of $9K or whatever might not be enough for the government to justify pursuing action. But what about repeated purchases that go deep into the 6-figures from single buyers alone?

Edited to add: is the tax nexus sort of a "amnesty"-motivated law/public policy for the government to say "we know what you've been doing and that's fine, but going forward, you're going to have to start adhering to this specific/explicit rule"?

[Calatrava r]

Originally Posted by DonRickles

While I am not condoning this behavior I witnessed my A.D. split a just under $20,000 cash payment into two separate purchases...

So there’s that....

If it was for one item that could be a big problem for everyone involved.

[MrMercedes]

Originally Posted by dualcarb

Like the others, I also like to pay with the credit card. I collect points and use the benefits that the points give me. I will never buy “luxury goods” on credit if I can’t afford it. I will pay off the credit card bills in full when I get it.

[Fort Rolex]

Originally Posted by Chester01

I pay credit card, get the points and then pay it off when the bill comes in. All points and no interest. Unless they are giving some discount which is unlikely.

Exactly this. Always collect your points!

[640ibimmerguy]

Originally Posted by 2th_doc

Getting my popcorn ready.


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[BisonHead]

In the UK when i bought my SD in 2006. I went to pay for it in full with my Debit card and the AD manager said why do that. We have 1 or 2 years 0% finance (Your choice), they split the cost equally over the 12 or 24 month period and you make set up a monthly direct debit payment for the subsequent divided amount.

So no balloon payment, or remembering to clear the purchase price by a set date etc. At the end of the period be it 12 or 24 months the watch is paid for in full. I think it was 20% of the MSRP down, then the remainder on monthly 0%.

Not sure if they still do this now. Mind then the display cases were full of most models, probably helped them shift stock.

Was a no brainer to be honest.

[NachoNeal]

It would be quite ironic if any of you old farts, who are making monthly payments on your porsches and beamers, are the ones that are so adamant about never financing a "luxury item".

[904VT]

Originally Posted by Calatrava r

I do not believe anybody has said that. Everyone agrees incurring market credit rates for anything but emergencies or necessities is a shame and a problem. All folks are saying is they take advantage of the ease of buying with a credit card and some take interest free terms when available. How do you even pay with cash. Unless you know the dealer they probably will not take a check for immediate release of the watch and over 10K in cash prompts a filing with the Federal authorities in the US.

You could just pay with your bank ATM card as debit. Saves your AD the CC (or at least most of it in majority of cases) processing fee. Or bank wire. Cash doesn’t have to be physical.

[904VT]

Originally Posted by Calatrava r

If it was for one item that could be a big problem for everyone involved.

Agree. That’s not a good business practice.

[DonRickles]

Originally Posted by 904VT

Agree. That’s not a good business practice.

It was two individual items. How the costs split I was not privy to...