The Great Credick Card GameUpdate After Month Four

Hello Kids. Long time. Jonny has been a busy little bee. The development of the new business is rumbling down the tracks, which has Jonny buried past his sweet, sweaty balls in to-do's. But it also has meant a flurry of activity for this experiment.

As you'll see in the stats below, Jonny has been involved in a full-on credit card gang-bang recently. Like hard-core to an extent that you have never IMAGINED. As mentioned last month, this new project was expected to result in a shit-ton of new credit card purchases. Well, what Jonny didn't anticipate was how many vendors these days accept payment via credit card. I expected to be able to run equipment / furniture / fixture purchases from far-away vendors through this little shenanigan, but Jonny had no idea that I could charge things like concrete cutting and replacement services, wholesale building materials, restroom partition fabrication, and outdoor signage fabrication.

Basically, the only expenditures that HAVEN'T been on a credit card have been payments to Jonny's subcontractors, and there is no chance in hell that those guys start taking plastic any time soon. Most of them will tell you "I just don't trust banks", so since Jonny won't pay them in cash, gold doubloons, goats, bags of grain, or shiny beads and small mirrors, they scurry to Jonny's bank to cash his check, and then run home and "deposit" their new-found wealth using their post-hole diggers and a Folger's can.

Anyway, the result of the better-than-expected credit card acceptance rate is over $130k in new purchases this month. Oh well, Jonny basically got a 1% discount on all of the cap-ex for this project, courtesy of the credit card dumbfucks whose orifices are the beneficiaries of this onslaught.

Stats after four months:

Purchases:	$170,947.71
Payments:	- $44,090.64
Debt Balance:	$126,857.07
Escrow Balance:	$127,438.90
Difference in Debt/Escrow:	+ $581.83
Interest Received:	$190.87
Rewards Received:	$390.96
Interest/Rewards Receivable:	$1,404.35
Net "Profit":	+ $1,986.18

So we're inching up on $2k in free money after four months. Not bad. Obviously the ratio of "profit" actually received versus the receivables is way out of whack right now, but it's because the bulk of the receivable is from purchases in the last 30 days for which the cash-back has not been received. One credit card has the vast majority of the churn this month, and Jonny will get a check from them next month for almost $1,100 which will bring the receipts/receivables back into line.

The next month will see a continued onslaught, although not to the extent that we've seen this month. Jonny's only regret is that he didn't line up another $100k or so in credit line before embarking on this journey so that he can let all of these charges ride for the full duration of the promotional interest-free periods. Unfortunately, by the time this project is complete, Jonny will have made more than $100k in payments just to free up credit line for more churn. In a perfect world, that $100k would have stayed on another credit card for 12-months and pulled in another $3k or so in interest on the escrow. But unfortunately, it is unlikely that any lender is going to extend Jonny another $100k in today's climate. A few months ago Jonny probably could have done it when banks weren't choking on liquidity problems and Jonny wasn't already carrying $130k in revolving debt, all of which was incurred in the last 120 days. I think any underwriter is going to think "red flag" when they see this scenario without knowing that Jonny has all of this dough escrowed. To the average credit analyst, Jonny's application for new credit would probably look like a desperation move from a guy that is likely paying his mortgage and other obligations using credit cards and that is liable to blow his brains out when he finally runs out of ways to meet his debt service.

In addition, Jonny has seen his FICO score continue to plummet. As of a few days ago, my score has fallen from 790 down to 680. Yet even with $130k in credit card debt, Jonny is still the most credit-worthy motherfucker they will ever see. What a stupid system. I can't wait to see what kind of beating my FICO takes in a few weeks when the balance is reported to the credit bureaus for the card that has a $100k limit and will be damn-near maxed out! I fully expect to log in to Equifax and see their system report my credit score as "I got nuthin'" or "Ok, REALLY?" instead of a numerical value because their algorithms do not accommodate this level of credit card debt accumulated this rapidly. I think their computer will take a giant shit when they see the balance on a single card jump from $12k to $100k in a single month. Good times.

Also, Jonny is half-way expecting to see some notifications of changes in terms coming from his sweet, sweet lenders. Jonny has heard stories of numerous creditors and credit card issuers reducing limits in response to "the credit crunch", which simply means that they have finally been forced to face the reality that if they extend silly amounts of credit to people who have no chance in hell of paying it back, they're gonna fucking lose money! Given that Jonny's credit profile looks like a Chernobyl-style meltdown in progress, how long will it be before a computer flags me, an analyst looks at the data, and promptly shits their pants? Goody-Goody! Jonny can't wait. I need to get my telephone recording gear ready to go, so when I call in response to their letter/notice, it is captured for all to hear. "Dear sweet, tiny little Baby Jesus, PLEASE let this call come from some overseas shiny-happy Hindu named 'Reggie' or 'Jessica' just to add another layer of comedy to Jonny's world."

Anyhoo, there you go. Proof of concept = SUCCESS. Jonny will continue with this exercise, but as you can imagine it is rapidly getting boring and Jonny is losing interest. Jonny will have to come up with some new twists to keep this circle-jerk interesting. Unfortunately, all of Jonny's ideas so far are not gonna happen because they are likely to get Jonny in trouble and are probably illegal, like Jonny faking his own death or Jonny applying for credit in the names of the wild rabbits that populate Jonny's back yard. Stay tuned...

Jonny out. ♥ You Long Time!