Even if you have the cash on hand, you may want to take a loan if the interest is low enough that it’s worth keeping the option of having cash on hand. It depends on your cash flow and personal comfort. It never makes numbers sense to trade low interest (or no interest) for higher interest, but it might make you feel more comfortable to do so.
This is more the case for personal hobby. I think a loan would be ludicrous. Now an installment plan for no cost is different. Free loans are great, if you’re responsible.
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I read back the whole thread and I think this is a pretty strange characterization. There’s a wide range of answers given, almost all of them thoughtful. I’ll agree there’s a focus on the risks, but that is the “financial education” part.
I myself have gotten close to my credit limit multiple times and used non-direct payment strategies on 5 figure deals before. And my advice for others still would be to use extreme caution if trying something similar. Everyone has different financial limits and different abilities to handle debt.
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Buying a card with debt is inherently irresponsible. You are risking your financial future for a hobby.
Sure, I might not lose my house in bankruptcy after defaulting on a 6 figure credit card debt- might not. Dealing with the bankruptcy and everything that goes along with it…not that bad really. Totally worth risking it for some nice cardboard.
Hopefully the people that did this have the the net worth to absorb the risk. As a former credit card user myself though I know it’s not all that difficult to get some ridiculous limits.
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I don’t agree with this. Debt is inherently risky - not irresponsible. All risks are different based on the magnitude and your personal situation. It’s irresponsible to take on more risk than you can handle.
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It’s irresponsible because of the why behind the debt. This is not a car that you need to function in most of American society or a house that you need to live in- it’s a hobby that you do for fun. It is not responsible to take on risk for this reason.
That’s my perspective. If you’re running a business maybe it’s different. And it’s not that hobbies should never be risky- I’d never tell someone to stop rock climbing just because it’s dangerous. When you finance something though you are introducing more risk that is not even related to the activity.
I feel ya. I racked up credit debt after leaving my previous career, and now I’m out, and always have several months of cash on hand. BUT if I wanted to drop it on a card… 
BUT to demonstrate the nuance, I had to spend several grand on necessary medical and vehicle costs recently… SO, I took a low-rate payment plan (basically a loan) to be sure I didn’t get caught with my pants down. Again, it all depends on personal M.O.
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that is because america isn’t expensive as israel luckily for you
He’s saying that Americans would be very lucky to get a mortgage that cheap. It’s not cheap at all to own a home in America
You seem to have a distinction between “required purchases” and “purchases for fun”. As someone that doesn’t own a home or a vehicle, I’d argue it’s required under the dominant North American lifestyle, but that lifestyle is ultimately a choice. That’s a completely different discussion though, but I’m happy to go on about it elsewhere if people are interested in discussing it.
But to me the distinction is arbitrary. Either debt is a useful tool or it’s not. If it’s useful to buy a home or a vehicle you can’t afford today, it’s useful to buy a card you can’t afford too. I think the important distinction is how much debt you take on. It would be entirely irresponsible to take on a $6M home mortgage on a yearly salary of $90k or to buy a Lamborghini while making $25k a year. But if you take out a mortgage you can handle with resilience to interest rates in a generally stable housing market, most people would consider that to be financially intelligent.
The same applies to cards. If you borrow a reasonable amount and avoid overly speculative purchases there absolutely nothing wrong with that assuming you aren’t neglecting other more important priorities in your life.
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Ah ya, I feel that most places in Asia (and probably other areas outside of Asia) it makes more sense to just rent. I went to college and lived in South Korea for a good amount of time and definitely just rented while I was there. But ya, over there you definitely don’t need to follow the western “norms.” Hopefully you do get to move to Japan someday. That would be awesome to hunt down some cards over there!
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thank you mate. always been my dream country since i was little and visited with my parents. i think i never was connected to western norms “have to study do a degree marry buy house have babies”. im just not willing to sacrifice my life style.
Personally, I think you can make a distinction between classes of goods. Viewing everything as equal feels shortsighted, Pokémon cards are luxury goods, especially if you need to take a loan to get one. You make use of a house or a car (granted I wouldn’t buy a car on credit either, it’s a very American practice), it generally provides a valuable service, which is why it makes sense to get on credit, but a trading card has zero functionality - might as well wait until you have the money saved up. The alternative for buying a house on a loan (i.e. saving up for one) doesn’t make any sense where I live. Therefore, taking on debt to purchase a house provides many benefits, but I struggle to see any for Pokémon cards (especially once you take the risks of either asset into account).
There is often a HUGE price gap between the cost of a home and a card or are we just talking about 6 figure cards here?
Buying cards on debt isn’t a problem if you have a plan or a financial goal - ie, flipping it at some point, or if the entry price point is attractive (maybe waiting xyz years to save up for it, it could have gone up in value, or gone down, but who knows). Maybe you are also leveraging reward points, cashback rewards, or just want an added security to your purchase by using the banks money and not yours incase something goes south.
Yes, the vast majority of hobbyists shouldn’t be buying on credit cards - but they certainly have their place especially if you are responsible with it.
I think the data is half of Americans don’t have more than $700 in cash saved anyway, so perhaps buying cards in itself isn’t a wise decision (actually, buying overpriced cardboard is an objectively silly decision anyway, but here we all are) lol
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I think that the key point to remember is that everyone is in a different situation. While some people would have no issue taking out a 6 figure loan knowing they could comfortably pay it off, others would struggle with debt of $1000 and would take months to be able to pay that off.
Most people are not comfortably able to spend hundreds of thousands on their hobbies and to many people paying even a couple of hundred for a card is expensive and would be a BIG purchase for them.
We also need to consider peoples other obligations. Do they have any other debt i.e a mortgage or car payments, other loans or business obligations? Do they have family to support? Going into debt, no matter how small can have consequences for them too and that is something to remember.
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I am aware, but it’s the most extreme case to compare it to (as well as previously mentioned, alongside a vehicle). I was mostly commenting that a distinction can and should be made between what a loan is used for. E.g. buying a home allows me to not pay rent, and instead pay of my mortgage. It also provides a place to live, shelter etc.
Taking a loan for Pokémon cards based on speculative potential returns just sounds like gambling with extra steps to me (and one you pay interest on as well). If this is literally your job, sourcing, grading, selling cards etc., I could understand it, but the overwhelming majority aren’t in this position.
I agree, it is a bit silly, which is why I treat my money in this hobby as burned, and not like some retirement plan or investment.
PS: Yes I am aware the US has a lot of credit “opportunities”, there are people who “make money” or receive services by juggling credit cards.
I think this thread has run its course, but “loan” is a broad term. There would need to be some length of term, interest rate, and $ amount figures included here to be useful. Also, if the loan is for a business or just collecting.
I’ve seen everyone here talking about bank loans, carrying credit card balances, to extended debt financing (pay in 4 type plans) which vary and are all extremely different. Not all include any interest when leveraged responsibly.
My personal risk tolerance is up to about $1000 total with 0% rotating, auto pay set, PayPal pay in 4 plans at any one time. But that’s just what aligns with my own risk tolerance. I know I could easily pay that off with savings or any bi-monthly pay check.