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Thread: Credit card or loan secured with physical PMs?

  1. #1

    Credit card or loan secured with physical PMs?

    If you hadn't noticed already, it's virtually impossible to get a loan or a credit card if you don't already have credit... no matter what your assets are!

    Does anybody know of a bank that will accept physical PMs as collateral for a credit card or a loan? I know about Orchard Bank's secured credit card where you have to deposit dollars, but are there any banks that will take physical bullion as collateral?

    I sure wouldn't mind mailing in some bullion and having a loan based on its value or a credit card limit pegged to its value. But it bugs the heck out of me to think of letting some dollars just sit around as security.

    (Obviously, I don't mean a pawnshop loan. But is that the only option?)
    Last edited by Corydoras; 12-23-2010 at 09:54 PM.



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  3. #2
    I'd be surprised if you found a bank/credit institution that was willing to do this simply because the value of the collateral is volatile. Then again, banks lend using real estate as collateral, so you might try talking to your local bank's (or credit union's) mortagage department if you really need to get a loan.

  4. #3
    That's a good idea, Bern, I wouldn't have thought of approaching a mortgage department.

    If not, then I gotta go to the pawnshop when I want a few FRNs for fast liquidity... because I want that bullion back... or just do as I've done for years, save up until I have enough FRNs to buy what I want. Pawnshops have been around at least as long as banks, and for good reason: Bankers are idiots.

    The last time I applied for a loan, I got turned down (without so much as a counteroffer for half the amount at twice the interest). This total rejection is what always happens every time I apply for a credit card or loan, and I'm even careful not to apply often. I had applied for the equivalent of less than TWO WEEKS of my income. I waved some bullion at the banker (worth several times the amount of FRNs I was requesting) and said, "Don't you take collateral?" She replied, "We can use a car as collateral. You shouldn't be carrying around that much bullion, it's valuable." I replied, "CARS DEPRECIATE. That's one reason I don't drive!" She said, "We can repossess a car." I said, "People can wreck or hide a car. YOU CAN TAKE THIS BULLION AND HOLD IT UNTIL I PAY OFF THE LOAN!" You can tell I was getting louder by the minute. "She said, there is nothing I can do. You could apply for a credit card instead of a loan, if you like." I said, "I never get accepted for credit cards, not enough of a history." She shrugged.

    I have said very nice things elsewhere in this forum about credit unions, in part because they are more careful than banks about qualifying borrowers. That's still true, and I was the victim of that. But it's clear that all financial institutions don't want responsible people who borrow only occasionally. They want people who are in debt constantly, building up this "credit history."

    And you know what? They're going to lose my loan business because yeah, I didn't even really need the FRNs, I just felt like buying something without going too low in my FRN balance, I could actually afford the item in cash. Financial services institutions no longer want the traditional "borrower who doesn't need the loan." They want people who desperately need a loan, every single month, forever.

  5. #4
    Banks don't want your collateral. Banks don't want your collateral. Banks don't want your collateral. Banks don't want your collateral. Banks don't want your collateral. Banks don't want your collateral. Banks don't want your collateral. Banks don't want your collateral. Banks don't want your collateral. Banks don't want your collateral. Pawn shops don't really want your collateral, either. For example: the loan against your car. They don't actually want your car, they just want you to fear losing your car should you fail to pay the loan back.

    Also, having no credit sounds cool, you know, as in you always pay cash, but it's not the most efficient way to run your personal finances. Credit scores are now taken into consideration for a number of things, most importantly insurance, since those with no or low credit are statistically more likely to file a claim. Those stats mean higher costs, higher premiums.

    If banks only had on time customers with good credit, they'd be stoked. As it is, the spread between their borrow/lend rate essentially covers the people who default while the fees are the money maker.

    You provide a service. To perpetuate the idea that you're a low-cost, low margin, high value business, you tack on fees to the backend, mostly for people who are in arrears or have otherwise broken the established rules of the contract. People who pay on time get a really good deal from banks. People who don't pay on time, or pay late, or otherwise violate the contract get a very bad deal.
    Last edited by Jordan; 12-24-2010 at 05:22 PM.

  6. #5
    Quote Originally Posted by Corydoras View Post
    If you hadn't noticed already, it's virtually impossible to get a loan or a credit card if you don't already have credit... no matter what your assets are!

    Does anybody know of a bank that will accept physical PMs as collateral for a credit card or a loan? I know about Orchard Bank's secured credit card where you have to deposit dollars, but are there any banks that will take physical bullion as collateral?

    I sure wouldn't mind mailing in some bullion and having a loan based on its value or a credit card limit pegged to its value. But it bugs the heck out of me to think of letting some dollars just sit around as security.

    (Obviously, I don't mean a pawnshop loan. But is that the only option?)
    I've never heard of a collateral requirement for a credit card. Who told you that?
    Quote Originally Posted by Torchbearer
    what works can never be discussed online. there is only one language the government understands, and until the people start speaking it by the magazine full... things will remain the same.
    Hear/buy my music here "government is the enemy of liberty"-RP Support me on Patreon here Ephesians 6:12

  7. #6
    Quote Originally Posted by heavenlyboy34 View Post
    I've never heard of a collateral requirement for a credit card. Who told you that?
    Nobody "told" me that. I thought everybody knew about credit cards secured with FRNs.
    So my question was just, has anybody heard of a credit card secured with PMs rather than FRNs.



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