I understand it, I don’t know why folks think like they do,, folks your putting your monthly income into the credit & you paying bills off that credit card. Until you get to zero. Then that $2500 cash flow goes into MM to stack money or tackle another debt!
Make sense to add the cashflow. Truth is, most people use their debit card. Move the money to the card, pay bills, increase your credit score and get out of debt quicker. I still feel you should keep some cash on hand as well.
Velocity banking is at its best if you get a lower APR compared to your debts' APR. Otherwise, you are just prolonging the agony 😫 because you still have to pay the minimum payments from your latest credit card. 💳
I'm your example it would be fine if they put the expenses on that CC in reality...as long as that cash flow is all going on the card.+$2000 to the card balance but $2500 pmt on same card would build credit and cash back rewards really well. But nobody actually does that.
What I would have loved to see is how much difference in interest and "rewards" there is with paying in $4605 early rather than $105 + $2500 when the bill is due.
I had a coworker tell me that she paid everything with her credit card and then paid it off each month. I didn't know what she was doing or did not know what was called and now I understand it.
That’s great you can start small when you first get started to get some practice in then eventually run as much as you can through credit cards for all the free rewards and benefits that come with that
I see where you’re going but can you please make it just a wee bit more confusing for some of your viewers? In explanations less words are better and you’re using way more words than needed.
@@FromG2eminora HELOC is literary a type of loan being borrowed against the equity of the home that you have to pay back. The biggest drawback of a HELOC is the bank can demand full payment at anytime so if you’re that deep in credit card debt you’re better off opening a 0% intro apr card and balance transfer everything to consolidate. All they’re doing is shifting one debt to another but at a lower interest rate.
Stumbled into your channel a few weeks back and been following what you teach (velocity banking) which is a very interesting concept. I did just that a few years ago and got rid of some credit cards and unsecured loan. Worked like a charm. However, the whole concept suggest that banks/credit card companies allow you to make a payment greater than your balance. Here in the UK, most if not all credit cards companies do not permit their clients to make a payment greater than their balance. Can you think/suggest a way to circumvent that hurdle that renders velocity banking impossible? I personally have £40000 of PLOC with only £5000 actual balance but cannot really utilise fully to clear balance due to tge restriction. Appreciate your response.
You cannot really pay more than the balance. They do not pay you any interest for a negative balance, and if it stays negative for 2-3 months they just send you a check. Velocity banking only works to REDUCE an existing balance. Which means that you DO have a balance that they charge interest on--at 18%-30%.
I understand why you put the 2500+ the 105 payment in there but you also added the $2000 expenses and they are to make it 4605 when the $2000 expenses is an addition to the $7000 balance on the card it’s not a subtraction.
Ok so to break it down 7,000 original owed balance Add 2k expenses = 9,000 Minus cashflow 2,500 = 6,500 Minus 105 payment = 6,395 This is what people do and this would be wrong. Here is what I want people to do instead 7k original balance owed 2k expenses before adding to the card you make a payment of 2k to the card brings the balance down to 5,000 Then swipe for expenses balance goes up to 7,000 Then minus cashflow 2,500 = 4,500 Then minus 105 payment = 4,395
I try to pay my credit cards as soon as the new statement is generated and don't wait until the due date. This way the daily average before the due date is calculated for a longer span of time then if I waited to may the monthly payment by the due date.
Credit Cards (cc) is an Unsecure Line of Credit. Yes, you want to use the cc to do Velocity Banking (VB). I hope this helped. With VB, you put your income in the cc to pay ALL of your expense ie: food, gas, etc. Now, you'll need to leave $$ in the checking acct for expenses that you cannot pay on a cc. Thus, with VB, you will pay down debt and increase your FICO credit score. This is the beauty of VB. Good luck to you.
Question..what happens if the credit card company lowers the cimit after you pay all your income into the card? I heard card companies are starting this as they tighten up lending
Yes this can happen which is why it is important to not max the card out. Other thing is we are not paying all of our income into a credit card only the amount that can be paid on a credit card. If we are doing this correctly then I’m not going to have the problem you presented. Let’s someone did what you are doing and their credit card reduced the credit limit the card is still active they just can’t use it if the card is now maxed out let’s say. If someone dumped their income in then I’m assuming we just created space in the credit card so the person wouldn’t have a problem they just have a lower line.
I didn’t name or discuss using a credit card to pay a mortgage. Most of the time there is a fee involved to do that so it isn’t worth it quite often. If you look at a company called plastiq there might be a benefit just have to run the numbers
Yes it can it is important to understand the concept first, run the numbers, and allow the math to show us the way forward. It also helps to have good discipline already in place for you personally before applying the strategy to your finances
I know it takes a while and it doesn’t work for everyone. In your position it is best to start with basic financial principles, building a foundation, maybe some debt snowball and then these strategies start to become more clear
You mentioned Mortgage payment with credit card, but must mortgage banks won't accept credit card payments. And no, my credit card bank will not allow it either
@@DenzelNapoleonRodriguez I was just hoping it was true, but not. Anyways you got a great channel, with lots of good info, and guidance. Keep up the good work 💪💪💪
Can I use this same concept using my insurance policy to inject capital with credit cards? Or in another way put the money from all my personal expenses of the month into the policy and then take out that money as a loan and pay myself the interest to grow my cash values within my wholife?
You would need to run the math behind and ask yourself does it make mathematical sense to borrow from credit cards at these high rates to put into a policy that grows at an internal rate of return of around 1-3% net and then borrow at around 5% out of the policy to pay bills and expenses which will increase your net cost of living each month because now your paying interest everywhere. And don’t get confused when you say pay yourself interest you are paying the insurance company the interest rate and then you are getting a dividend which is likely going to be less than what you borrowed in that year. So just run the math
@@DenzelNapoleonRodriguez It would be with cards 0% interest for 12 months and if the policy with the loans charges me 4% I would pay 15% or 20% interest
@@nbtraderbat8957 ok now compare it to what the gain is do you receive more and not just more but creates a positive healthy offset and you are better off
It seems that you should’ve started with a $9000 total credit card balance then subtracted the $4605 instead you use a $7000 balance and subtracted $4605. That’s the part that confuses me and I feel like that’s not correct.
Wow, I have been asking this question to several other velocity banking people. I couldn't understand are you paying the income as a "payment" or as an other payment. As you know, with credit cards, it will indicate whether you are making a minimum payment and/or other payment and I couldn't understand where to add the income. I have a very similar situation, with my zero balance credit card for 20 months and I want to use this card to pay my expenses, but I wasn't sure how to apply the income deposit. The credit card is $11,000 limit and I owe about $6000 on the card, my expenses total about $2000 per month and I have $3000 cash flow per month. However, I have like other credit cards as well, that have interest charges and I am just confused on whether I should just get the 0 percent card paid off and then pay off the other cards???
Use the 0 percent cc to pay your expenses temporarily. That will increase your cash flow temporarily to slam down that high debt, once you pay off that $6k keep using your 0 percent cc for expenses then use your cash flow to slam down that card. Hopefully I understood you correctly...
Listen...If you have $36,000 per year CASH FLOW...Money left over after all expenses. Why do you need credit to pay expenses when you have 3K left over every month after expenses? Also, why would carry a balance on ANY credit card?
@@thatoneguy4646 What "high debt"? He owes 6k on a credit card and has $3k left over every month after expenses. Take 2 months to pay off the credit card and be done with it.
@sjagain free money is free money. I have clients that make 7 figures a year and run tens of thousands of dollars on credit cards for points, cash back rewards, miles, also it safer than using a debit card. If you have fraud on a credit card the bank can easily close it, give you a new card, or refund the fraudulent transaction. With a debit card tied to your checking where all your cash is at if you encounter fraud that is your cash and the bank has to close your bank account, launch an investigation which can take time. That can lock up money that you need to cover other expenses. So not only are there benefits of using credit cards but it is another level of protection.
Assuming by flex loan you mean an option where you can pull cash out of your credit card and get a loan for it, I believe he would say no because it isn’t revolving
I understand it, I don’t know why folks think like they do,, folks your putting your monthly income into the credit & you paying bills off that credit card. Until you get to zero. Then that $2500 cash flow goes into MM to stack money or tackle another debt!
Make sense to add the cashflow. Truth is, most people use their debit card. Move the money to the card, pay bills, increase your credit score and get out of debt quicker. I still feel you should keep some cash on hand as well.
I am totally lost.
Velocity banking is at its best if you get a lower APR compared to your debts' APR. Otherwise, you are just prolonging the agony 😫 because you still have to pay the minimum payments from your latest credit card. 💳
I'm your example it would be fine if they put the expenses on that CC in reality...as long as that cash flow is all going on the card.+$2000 to the card balance but $2500 pmt on same card would build credit and cash back rewards really well. But nobody actually does that.
Love it bro 😎
What I would have loved to see is how much difference in interest and "rewards" there is with paying in $4605 early rather than $105 + $2500 when the bill is due.
I had a coworker tell me that she paid everything with her credit card and then paid it off each month. I didn't know what she was doing or did not know what was called and now I understand it.
That’s great you can start small when you first get started to get some practice in then eventually run as much as you can through credit cards for all the free rewards and benefits that come with that
I see where you’re going but can you please make it just a wee bit more confusing for some of your viewers? In explanations less words are better and you’re using way more words than needed.
They all do that. It's a shell game, they throw figures and concepts around to confuse people.
Sounds clear to me!
Vanntastic does it better tbh 😅😅
I’m going to apply for a home equity line and pay these cards off. Can’t wait to be debt free.
You won't be debt free! You have a loan against your house
@kevincindy Line of Credit is what he is getting not a loan. Line of Credit is much better than a loan.
@@FromG2eminora HELOC is literary a type of loan being borrowed against the equity of the home that you have to pay back. The biggest drawback of a HELOC is the bank can demand full payment at anytime so if you’re that deep in credit card debt you’re better off opening a 0% intro apr card and balance transfer everything to consolidate. All they’re doing is shifting one debt to another but at a lower interest rate.
Okay, I see you wrote the calculations side by side but can you show the interest payment calculations side by side to provide an example?
I think you adding in the $2000 monthly expenses on the CC into this equation is just making it a little more confusing to explain?
Stumbled into your channel a few weeks back and been following what you teach (velocity banking) which is a very interesting concept. I did just that a few years ago and got rid of some credit cards and unsecured loan. Worked like a charm. However, the whole concept suggest that banks/credit card companies allow you to make a payment greater than your balance. Here in the UK, most if not all credit cards companies do not permit their clients to make a payment greater than their balance. Can you think/suggest a way to circumvent that hurdle that renders velocity banking impossible? I personally have £40000 of PLOC with only £5000 actual balance but cannot really utilise fully to clear balance due to tge restriction. Appreciate your response.
I’m only educated in the US about this concept I think things change In other countries
@@DenzelNapoleonRodriguez Thank you for getting back to me.
You cannot really pay more than the balance. They do not pay you any interest for a negative balance, and if it stays negative for 2-3 months they just send you a check.
Velocity banking only works to REDUCE an existing balance. Which means that you DO have a balance that they charge interest on--at 18%-30%.
I understand why you put the 2500+ the 105 payment in there but you also added the $2000 expenses and they are to make it 4605 when the $2000 expenses is an addition to the $7000 balance on the card it’s not a subtraction.
Ok so to break it down 7,000 original owed balance
Add 2k expenses = 9,000
Minus cashflow 2,500 = 6,500
Minus 105 payment = 6,395
This is what people do and this would be wrong.
Here is what I want people to do instead
7k original balance owed
2k expenses before adding to the card you make a payment of 2k to the card brings the balance down to 5,000
Then swipe for expenses balance goes up to 7,000
Then minus cashflow 2,500 = 4,500
Then minus 105 payment = 4,395
I try to pay my credit cards as soon as the new statement is generated and don't wait until the due date. This way the daily average before the due date is calculated for a longer span of time then if I waited to may the monthly payment by the due date.
Question ❓
The MP is 105, will it make any difference if you pay it weekly $26.25 x 4
Maybe a little less interest .???😅
❓️is it worth doing this with an unsecured CC? Or what's the alternative?
Credit Cards (cc) is an Unsecure Line of Credit. Yes, you want to use the cc to do Velocity Banking (VB). I hope this helped. With VB, you put your income in the cc to pay ALL of your expense ie: food, gas, etc. Now, you'll need to leave $$ in the checking acct for expenses that you cannot pay on a cc. Thus, with VB, you will pay down debt and increase your FICO credit score. This is the beauty of VB. Good luck to you.
Question..what happens if the credit card company lowers the cimit after you pay all your income into the card? I heard card companies are starting this as they tighten up lending
Yes this can happen which is why it is important to not max the card out. Other thing is we are not paying all of our income into a credit card only the amount that can be paid on a credit card. If we are doing this correctly then I’m not going to have the problem you presented.
Let’s someone did what you are doing and their credit card reduced the credit limit the card is still active they just can’t use it if the card is now maxed out let’s say. If someone dumped their income in then I’m assuming we just created space in the credit card so the person wouldn’t have a problem they just have a lower line.
What is the name of the company you can run your credit card through to pay your mortgage, that needs with an X
I didn’t name or discuss using a credit card to pay a mortgage. Most of the time there is a fee involved to do that so it isn’t worth it quite often. If you look at a company called plastiq there might be a benefit just have to run the numbers
@@DenzelNapoleonRodriguez yep plastiq
Can velocity work if you’re trying to pay off credit card debt?
Yes it can it is important to understand the concept first, run the numbers, and allow the math to show us the way forward. It also helps to have good discipline already in place for you personally before applying the strategy to your finances
Your strategies are extremely confusing and complicated.
I know it takes a while and it doesn’t work for everyone. In your position it is best to start with basic financial principles, building a foundation, maybe some debt snowball and then these strategies start to become more clear
You mentioned Mortgage payment with credit card, but must mortgage banks won't accept credit card payments.
And no, my credit card bank will not allow it either
You are correct maybe you mis heard me in the video I wasn’t saying to use a credit card to pay your mortgage payment.
@@DenzelNapoleonRodriguez I was just hoping it was true, but not.
Anyways you got a great channel, with lots of good info, and guidance.
Keep up the good work 💪💪💪
Does it work with a card that already has a balance?
Can I use this same concept using my insurance policy to inject capital with credit cards? Or in another way put the money from all my personal expenses of the month into the policy and then take out that money as a loan and pay myself the interest to grow my cash values within my wholife?
You would need to run the math behind and ask yourself does it make mathematical sense to borrow from credit cards at these high rates to put into a policy that grows at an internal rate of return of around 1-3% net and then borrow at around 5% out of the policy to pay bills and expenses which will increase your net cost of living each month because now your paying interest everywhere. And don’t get confused when you say pay yourself interest you are paying the insurance company the interest rate and then you are getting a dividend which is likely going to be less than what you borrowed in that year. So just run the math
@@DenzelNapoleonRodriguez It would be with cards 0% interest for 12 months and if the policy with the loans charges me 4% I would pay 15% or 20% interest
@@nbtraderbat8957 ok now compare it to what the gain is do you receive more and not just more but creates a positive healthy offset and you are better off
It seems that you should’ve started with a $9000 total credit card balance then subtracted the $4605 instead you use a $7000 balance and subtracted $4605. That’s the part that confuses me and I feel like that’s not correct.
No I answered your question in another comment you posted check that out
@@DenzelNapoleonRodriguez thank you! Yes, I got it. It took a couple more videos for it to come to life.
Wow, I have been asking this question to several other velocity banking people. I couldn't understand are you paying the income as a "payment" or as an other payment. As you know, with credit cards, it will indicate whether you are making a minimum payment and/or other payment and I couldn't understand where to add the income. I have a very similar situation, with my zero balance credit card for 20 months and I want to use this card to pay my expenses, but I wasn't sure how to apply the income deposit. The credit card is $11,000 limit and I owe about $6000 on the card, my expenses total about $2000 per month and I have $3000 cash flow per month. However, I have like other credit cards as well, that have interest charges and I am just confused on whether I should just get the 0 percent card paid off and then pay off the other cards???
Use the 0 percent cc to pay your expenses temporarily. That will increase your cash flow temporarily to slam down that high debt, once you pay off that $6k keep using your 0 percent cc for expenses then use your cash flow to slam down that card.
Hopefully I understood you correctly...
Don't forget to set aside a budgeted amount for expenses you can't pay with cc, I use to forget to include that in my budget when I got paid.
Listen...If you have $36,000 per year CASH FLOW...Money left over after all expenses. Why do you need credit to pay expenses when you have 3K left over every month after expenses? Also, why would carry a balance on ANY credit card?
@@thatoneguy4646 What "high debt"? He owes 6k on a credit card and has $3k left over every month after expenses. Take 2 months to pay off the credit card and be done with it.
@sjagain free money is free money. I have clients that make 7 figures a year and run tens of thousands of dollars on credit cards for points, cash back rewards, miles, also it safer than using a debit card. If you have fraud on a credit card the bank can easily close it, give you a new card, or refund the fraudulent transaction. With a debit card tied to your checking where all your cash is at if you encounter fraud that is your cash and the bank has to close your bank account, launch an investigation which can take time. That can lock up money that you need to cover other expenses. So not only are there benefits of using credit cards but it is another level of protection.
Can a credit card that offers flex loan , can we consider that as a line of credit ?
Assuming by flex loan you mean an option where you can pull cash out of your credit card and get a loan for it, I believe he would say no because it isn’t revolving
Bingo. Don’t force something to work if that is not what is meant for
Is it doable with VB if negative CF?
Check out this video where I cover a case study on negative cashflow ruclips.net/video/Q6oNkcHXf8Y/видео.htmlsi=kqsT_j0A9q_bIaE8
@@DenzelNapoleonRodriguez Thank you! Will checkout the video.
Where does the $4605 come from? Cash flow is only $2500...🤔
Cashflow + bills/expenses that can be paid with a card
Cashflow=$2500. Bills=$2000. Monthly payment on the CC=$105.......2500+2000+105=4605.
It is very confusing to a person who doesn't under the concept.
I agree
Conclusion: Put in more than you take out.
Nice 👍