MTTM Podcast Episode 511 – Buy or Rent (Which is best?), Make money from your Credit Card & Holiday Scam Warning

Listen to Episode 511

In this week's podcast, I reveal whether Renting or Buying a property is best using our own purpose-built calculator. Next, I discuss two ways you can make money from your credit card. Finally, we reveal the details of a widespread holiday scam, explaining how to avoid becoming a victim.

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Episode 511 Podcast Summary

Renting vs Buying - which is best?

Summary

Is it better to buy a home or continue renting? It’s a huge financial decision with no simple answer. In this section, I move beyond theory to crunch the numbers using our own comprehensive calculator. I analyse various scenarios for first-time buyers, factoring in everything from deposits and house price growth to maintenance costs and mortgage rates. Discover when renting is the smarter financial move and at what point buying becomes the clear winner for building wealth.

Key insights

• Leverage is the key: The main reason property can accelerate wealth is the ability to use leverage—borrowing a large sum to control a valuable asset. Small increases in property value lead to significant gains on your initial deposit.
• Time is a great healer: Even if you buy at the peak of the market and experience a fall in house prices, staying in the property long-term while paying down a repayment mortgage can still leave you better off than if you had rented.
• High savings can beat property: In some scenarios, a disciplined renter who invests their spare cash wisely (especially a larger lump sum they might have used for a deposit) can end up wealthier than a homeowner, particularly if house price growth is slow.
• The Golden Age may be over: Recent research suggests UK house price growth is slowing, especially in areas like London. Banking on your home to fund your retirement is a risky strategy that limits your future options.

Two ways to make money from your credit card

Summary

Here I explore the two primary methods you can make money from your credit card. The first is the straightforward approach of using cashback credit cards, earning a percentage back on your everyday spending. The second, more complex method is 'Stoozing'. This involves using a 0% purchase credit card for your spending while moving the cash you would have spent into a high-interest savings account. We break down the numbers to see which strategy is more profitable and reveal the things you need to be aware of before trying it out for yourself.

Key insights

• Cashback: For most people, using a good cashback credit card and clearing the balance each month is a simple way to make money. An organised person can earn hundreds of pounds a year.
• 'Stoozing': Our analysis shows that 'Stoozing' can earn you more than a cashback card in certain scenarios, but only if you secure a high enough credit limit (typically £5,000 or more) on a 0% purchase card.
• The risks of 'Stoozing': This strategy isn't for everyone. It requires discipline, organisation, and multiple credit applications, which could potentially negatively impact your credit score and your ability to get a mortgage in the future.

The latest holiday scam to watch out for

Summary

We reveal the details of a sophisticated scam that targets travellers who have booked accommodation through travel website Booking.com. We explain how scammers are gaining access to hotels' systems to send fraudulent messages to customers via the official app. These messages, which often create a sense of urgency, trick holidaymakers into clicking fake payment links to "confirm" their booking, leading to significant financial loss. We detail the red flags to watch for and the steps you can take to protect yourself, reinforced by Damien's own recent, and very similar, security issue with the platform.

Key insights

• The scam uses official channels: Scammers are compromising the accounts of hotels, not Booking.com itself. This allows them to send convincing messages containing your correct booking details through the official app and website.
• Urgency is a key tactic: Be wary of any message that pressures you to act quickly, threatening to cancel your booking if you don't verify payment details or pay an outstanding balance immediately.
• Verify independently: Never click links in messages. If you receive a suspicious request, close the app and contact the hotel or Booking.com directly using contact details found through a separate, independent search.
• Protect your account: Enable two-factor authentication (2FA) on your Booking.com account for an extra layer of security. Also, regularly check your credit card statements for any unrecognised transactions.

Episode quiz 

1. What annual maintenance cost (as a percentage of property value) was used in the Buying vs Rent calculations?
a) 1.5%
b) 2.2%
c) 2.8%
d) 3.5%

2. According to research from Rathbones, what has the average annual house price growth been in London since 2016?
a) -0.5%
b) 1.3%
c) 3.1%
d) 5.8%

3. What are the two main ways to make money from a credit card?
a) Loyalty points and bank switching offers
b) Taking cash advances and buying cryptocurrency
c) Air miles and referral bonuses.
d) Cashback cards and 'Stoozing'

4. What is one of the major risks of 'Stoozing'
a) It is illegal in the UK
b) Credit card companies will close your account immediately if they find out
c) The interest earned is always less than the fees you end up paying
d) It could potentially negatively impact your credit score, affecting future credit applications

5. The recent holiday scam discussed in the podcast affects users of which platform?
a) Airbnb
b) Expedia
c) Booking.com
d) Skyscanner

Answers

1. c) 2.8%
2. b) 1.3%
3. d) Cashback cards and 'Stoozing'
4. c) It could potentially negatively impact your credit score, affecting future credit applications
5. c) Booking.com

Resources

Links referred to in the podcast:

• Rent vs Buy Calculator will be available for download soon
• Best Mortgage Rates in the UK
• Rathbones Research - Is the Golden Age of property investment over?
• Compare the Best Cashback Credit Cards
• Compare the Best 0% Purchase Credit Cards
• What is 'Stoozing' - How to make money from your Credit Card
• Subscribe to our Newsletter

 

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