Credit cards have both pros and cons which can be easily known by a simple search in the internet. For instance a credit card holder buys an 'item' or service worth $200 on 1st jan by swiping the card. The holder is not actually paying the money on 1st jan, he/she will pay the money later depending on the billing cycle and credit period of the credit card company. Usually the credit card company gives interest free credit to their customer for specific duration of time. If the card holder does not pay the amount within a stipulated period of time to the credit card(CC) company, the CC company charges a fixed percentage of the defaulted money on top of the defaulted money. This is how a CC company earns money apart from other sources of revenue. Lets assume that the time to actually pay for the good/service is 31st jan i.e one month duration.
Keeping the above details in mind we focus on the 'item' which is bought. As already guessed the one item whose value is increasing irrespective of whether it was bought 1yr back or 100yr back, irrespective of whether it was used by 1 person or 100 person is GOLD. So using a credit card buy gold worth $200 on 1st jan, equivalent to 5gm of gold. After 30 days the price of gold increases and 5gm gold on 31st jan costs $210. 31st jan also happens to be the day when the card holder has to pay $200 for the purchase on 1st jan. So on 31st Jan that person sells the 5gm gold at $210. With this $210 the card holder uses $200 to pay the CC company and $10 is the profit the card holder makes. This method is effective even if the card holder has $0 in bank account.
This was the basic idea. Keep in mind credit card policy varies, so read the policy rules thoroughly. Also before buying, the selling procedure has to be perfected. Not many shops buy back gold from customers. Before buying make sure you can sell it as well at a later date. The whole idea is based on monotonical increase of gold price. Its the faith of the people in gold which is driving the price up (just like the faith on currency notes). Its a bubble in the making. Price of gold may fall. Till then this idea works fine. If more and more people trust in Gold more than their country's currency then we will return to historic barter system. Personally, Gold or credit does not excite me.
Keeping the above details in mind we focus on the 'item' which is bought. As already guessed the one item whose value is increasing irrespective of whether it was bought 1yr back or 100yr back, irrespective of whether it was used by 1 person or 100 person is GOLD. So using a credit card buy gold worth $200 on 1st jan, equivalent to 5gm of gold. After 30 days the price of gold increases and 5gm gold on 31st jan costs $210. 31st jan also happens to be the day when the card holder has to pay $200 for the purchase on 1st jan. So on 31st Jan that person sells the 5gm gold at $210. With this $210 the card holder uses $200 to pay the CC company and $10 is the profit the card holder makes. This method is effective even if the card holder has $0 in bank account.
This was the basic idea. Keep in mind credit card policy varies, so read the policy rules thoroughly. Also before buying, the selling procedure has to be perfected. Not many shops buy back gold from customers. Before buying make sure you can sell it as well at a later date. The whole idea is based on monotonical increase of gold price. Its the faith of the people in gold which is driving the price up (just like the faith on currency notes). Its a bubble in the making. Price of gold may fall. Till then this idea works fine. If more and more people trust in Gold more than their country's currency then we will return to historic barter system. Personally, Gold or credit does not excite me.
