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  1. #1

    Default Using credit card to finance hike ?

    Giving serious thought about doing a SOBO Thru-hike this July. Already have all the gear necessary and have $4k-$5k available for trip.

    Question: Why couldn't someone put all (or most) of their thru-hike purchases on a credit card and just make the minimum payment every month? That way, you get home and have cash available to keep you afloat until you get back to work, etc. Sure, you're going to have a huge credit card bill (with interest) to pay when you're done but you can do that as quickly or slowly as you desire.

    Or is this just a bad idea?

  2. #2

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    Credit card interest rates are high.
    Especially for people with no money/poor credit

    If you don't have money, you don't have money , you are gambling you will in future. Easy to dig deep hole. Really deep.

    Smart advice, is to save up. Sell things. Borrow no interest from parents, etc.

    Let's be honest...doing this type thing is a symptom. It's reflective of how someone will approach everything in life. It won't be limited to just the AT. It will be everything. This is how some people end up with $100k in credit card debt.

    They want the next thing, before the last is ever paid off. It's a never ending chain of wanting what you can't afford. Sure some can manage it. Some can't. Some manage until an event like job loss derails it all.

    My wife's parents were this type. Stayed above their means until her dad was laid off, couldn't get another job near the same pay. Went bankrupt, owed massive credit card debt, owed IRS 40k. Lost house, had to move back to NJ where a family member gave them a job. Was psychologically damaging to her teenage little brothers. One ended up on meth, and in prison when friends he stayed with were busted for making it.
    Last edited by MuddyWaters; 03-02-2018 at 09:58.

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    Registered User Megapixel's Avatar
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    From experience, I say you might find life pretty stressful post hike trying to pay down a double digit interest rate balance of 6k. If you do decide to go the credit route, see if you can get a card with a zero % intro rate for 18 months, and open it the month you depart. Another financially viable option is selling all your stuff which you can replace item by item cash after you return, if you find you still want all of it. This is a very freeing option, one i’ve also experienced twice in my life.

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  4. #4

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    Quote Originally Posted by ZenBeard View Post
    Giving serious thought about doing a SOBO Thru-hike this July. Already have all the gear necessary and have $4k-$5k available for trip.Question: Why couldn't someone put all (or most) of their thru-hike purchases on a credit card and just make the minimum payment every month? That way, you get home and have cash available to keep you afloat until you get back to work, etc. Sure, you're going to have a huge credit card bill (with interest) to pay when you're done but you can do that as quickly or slowly as you desire. Or is this just a bad idea?
    It's as bad an idea as buying a $4000 TV with a credit card, and paying it off over time.

  5. #5
    illabelle's Avatar
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    Quote Originally Posted by ZenBeard View Post
    Giving serious thought about doing a SOBO Thru-hike this July. Already have all the gear necessary and have $4k-$5k available for trip.

    Question: Why couldn't someone put all (or most) of their thru-hike purchases on a credit card and just make the minimum payment every month? That way, you get home and have cash available to keep you afloat until you get back to work, etc. Sure, you're going to have a huge credit card bill (with interest) to pay when you're done but you can do that as quickly or slowly as you desire.

    Or is this just a bad idea?
    Zen, a lot depends on your history handling money and where you are in your career. What you described isn't something I would do personally, because I hate paying interest. However, just because I have the financial resources to pay our credit card bill in full every month doesn't mean you do. I'm glad to see that you have the money saved for the hike, and it is smart to consider what happens after the hike. Maybe you could develop a modified plan where you reserve $2000 or whatever for post-hike expenses, and use the credit card only after the rest of the money is gone.

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    The 4-5K will keep you on budget. CC it's easy to go over. Better to use the CC if you have to once you return.

  7. #7

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    Thanks everyone. Pretty much what I thought everyone would say. Just curious. Not something I would do either.

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    Quote Originally Posted by MuddyWaters View Post
    Credit card interest rates are high.
    Especially for people with no money/poor credit

    If you don't have money, you don't have money , you are gambling you will in future. Easy to dig deep hole. Really deep.

    Smart advice, is to save up. Sell things. Borrow no interest from parents, etc.

    Let's be honest...doing this type thing is a symptom. It's reflective of how someone will approach everything in life. It won't be limited to just the AT. It will be everything. This is how some people end up with $100k in credit card debt.

    They want the next thing, before the last is ever paid off. It's a never ending chain of wanting what you can't afford. Sure some can manage it. Some can't. Some manage until an event like job loss derails it all.

    My wife's parents were this type. Stayed above their means until her dad was laid off, couldn't get another job near the same pay. Went bankrupt, owed massive credit card debt, owed IRS 40k. Lost house, had to move back to NJ where a family member gave them a job. Was psychologically damaging to her teenage little brothers. One ended up on meth, and in prison when friends he stayed with were busted for making it.
    Exactly. Credit cards are best for people that really donít need them.


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  9. #9

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    Very bad idea to put a hike on a CC unless you have the cash to back it up. What you should do is put the card on automatic payments by linking it to your savings account. That way you don't need to worry about missing payments.
    The AT - It has it's ups and downs...

  10. #10

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    Quote Originally Posted by ZenBeard View Post
    Giving serious thought about doing a SOBO Thru-hike this July.

    . . .
    Why couldn't someone put all (or most) of their thru-hike purchases on a credit card and just make the minimum payment every month?
    In addition to points already made, I'd like to address the part in bold.

    Let's say you use your credit card to finance your hike, and stop using it when you finish. If you make only the minimum monthly payment when you return, your balance outstanding will continue to go up, because the 'minimum payment' is usually less than the interest accrued.

    It's not possible to 'pay off' a credit card balance making only the minimum payment. It's not even possible to maintain a consistent balance outstanding only making the minimum payment.

  11. #11

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    I knew someone who financed their AT hike by margin borrowing during the dotcom boom. As it turned out, it worked for him.

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    Quote Originally Posted by AllDownhillFromHere View Post
    I knew someone who financed their AT hike by margin borrowing during the dotcom boom. As it turned out, it worked for him.
    A fancy way or saying he used his gambling winnings to fund his hike. I suppose someone could fund an AT hike by buying scratch tickets along the way. If they lose they have to hang out in town and wait until they earn enough to buy another ticket and hope that wins.

  13. #13
    Registered User JJ505's Avatar
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    $3-5K (plus or minus) is a huge amount to put credit card. Have you figured out the interest you will pay? Also if you don't pay on time, have you figured what kind of penalties you'll pay? (I agree with Heliotrope that credit cards are best used for people who don't need them.)

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    It has been said already but bears repeating - you can't get ahead in the world when savings accounts pay 1% and credit cards charge 18%. It's a terrible idea to use credit cards except in limited cases when they are paid off each month, not incurring interest. It is too easy to overspend with cards. With cold hard cash, you spend what you have and no more.

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    Registered User somers515's Avatar
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    Quote Originally Posted by ZenBeard View Post
    Thanks everyone. Pretty much what I thought everyone would say. Just curious. Not something I would do either.
    Someone on whiteblaze posted this link in a thread like this once and it made a huge positive impact on my life. If living for 4-6 months with only what you can carry on your back is something that appeals to you but you feel money is tight - this website might be helpful for you. Good luck!

    http://www.mrmoneymustache.com/2013/...one-blog-post/
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  16. #16
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    +1 on Mr. Money Mustache - that's been my method of living for long before I ever read that site. Everything there is spot on.

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    Finance the hike on a card without the funds to back it up? Like others have said, probably not a good idea.

    However, if you have the money saved, I still think it's a good idea to bring and use a credit card for all purchases unless you want to withdraw cash with a debit card at the grocery store or something. If you're willing to do some research, stay on top of offer expiry dates, and pay off your full balance every month, credit cards can offer some nice perks in the form of cash back, airline miles, etc. If you're going to be spending $4000-$6000 on the trip anyway, might as well take advantage of those features! If you have a card with good air travel rewards, for example, by the time you've paid all for all those hotels and resupplies during the hike, you might end up with a discounted or even free ticket home from Maine.

    I usually have two different credit cards and have them both set up to autopay the full balance from my checking account each month and I just keep an eye on my checking account to make sure nothing is at risk of bouncing. More than two feels like a headache, but my brother is super into looking around for the best deals and he usually has four or five at a time. He gets free gas, discounted flights, gift cards, all kinds of stuff. It's like a game to him the same way coupon shopping is for some people. If you're organized and you have the self-control not to charge a balance higher than you can pay off, it can be a good way to get free stuff.
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  18. #18
    ME => GA 19AT3 rickb's Avatar
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    Kind of depends on what you will have waiting for you when you get off the Trail.

    If your professional prospects are air tight (like someone in Nursing, at least at one point in time) then I would not have any trouble with the plan.

    I think it makes far more sense to go into debt for a thru hike, than it does going into debt to buy a new car ó at least until your annual income exceeds $100k and you have your house paid off ó which is something society thinks is normal (even expected).

  19. #19
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    Default Here's an example

    You may already know all this, but I thought Iíd post in case it helps anyone else out. Using a credit card with the intent to only pay the minimum payment is not a smart move, and will cost a lot in the long run. Figuring out what this will cost is simple math, yet I donít think a lot of people take the time to think it through.

    As a theoretical (simplified) example letís say you rack up $4,000 on the credit card, and your minimum payment is 1%. Letís say your credit card gives you a decent interest rate of 12% apr, which is equivalent to 1% per month. So this is what the first month of paying this off would look like:
    Minimum payment = $4,000 x 0.01 = $40
    Balance after first month payment = $4,000 - $40 = $3,960

    So you pay the first month off, which leaves $3,960 owed. When the interest accrues before next months payment the balance will be 1% higher, or $3,960 x 1.01 = $3,999.60.

    It doesnít take a rocket scientist to figure out that itís gonna take a reaaaaaaaaaaaaallllyyy long time to pay off the debt at that rate. So as others have stated, save the money and then go hike. If you don't have the money then make it a priority to save it before you go.
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  20. #20
    Registered User Vanhalo's Avatar
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    Be better to take out a loan. Or just save the money......never owned a credit card but I have paid off multiple loans.
    Paying off a 20k loan this month....bought a car...started another one
    "North America presents in it's external form certain general features which it is easy to discriminate at the first glance. A sort of methodical order seems to have regulated the separation of land and water, mountains and valleys." -Alexis de Tocqueville
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