You probably have a 2% cap on 1 yr increase which will dampen impact for a year. More time to see what happens.
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I believe the annual cap was 5% with no lifetime max, but I could be mistaken. If that is quite unusual, perhaps in the unusual COVID times while throwing out those crazy rates, they opened up the caps? I’ll review the details, thanks for the notion!
I have a 3%, 30 year mortgage that I refinanced during COVID. I have since just piled up the balance in my brokerage account. TBIL is still paying 4%, and many dividend and bond ETFs can beat the 3%. They should appreciate somewhat when the Fed starts cutting rates, but I have also seen them drop about 3-5% with long term interest rates going up. In total, I am earning about 75 bps of spread with a combination of the above.
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Very possible. That 2/yr was based on last time I shopped ARM vs fixed in the 00’s. Nothing more actuarial than saying “did you read your contract (policy)?”
and there is your answer. are you mathy on the mortgage or personal psychological? either is fine, even in our field of work. personal finance is personal.
for me, at that rate, I’d put it in something else instead of paying down. when it resets, that’s a different story
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Yup
I think to myself occasionally that I could do all these 0% credit card offers and pile it into a HYSA but that feels too leveraged to me… what if I miss a payment. And is the payoff of the extra interest worth it.
Mortgage feels different, maybe because it’s higher amounts in just one account.
Actually, bump that up to 100bps spread. I shifted from a few growth ETFs to over to bond and dividend ETFs. I believe there is also a bit of a tax play here if you itemize since the mortgage interest will offset your W2 income while any qualified dividends will be taxed at 15%, so depending on tax rate, closer to a 3% (1-32%) = 2% net cost compared to a 4% (1-15%) = 3.4% net gain.
I just recently started cooling off on credit card churning. I used to do several per year. But sometimes I’ll still do a great “Spend $1,000 get $250” card when I have a $1,000 purchase to make, just open-purchase-pay-close.
Oh, I still do credit card offers a couple times a year (except not this coming year because we might buy another house). But $250 isn’t usually enough for me… I need $500-800 to do them
I don’t usually see $500+ unless it’s like a $4,000 spend, which exceeds my threshold for wanting to track it 
I don’t want it open for more than a few days, certainly not past a month. Though some will clawback if you close it that quickly, so I’ve had to keep a few open with $0 balances for 3 months.
Yeah, the spends are higher, but I can usually manage those over the time period they give. But yeah, it’s harder to track them and any purchases I want extended warranties for I keep off those cards.
| 8/27/2018 | U.S. Bank Cash+ Visa Signature Card | Earn $150 after purchasing $500, get 5% back on certain categories. | CLOSED | |
|---|---|---|---|---|
| 10/15/2018 | Barclays | Make 1 purchase (done) get miles | CLOSED | |
| 1/2/2019 | AmEx Business | Earn 75K points after spending $3,000 in 3 months | $95 annual fee waived initially | CLOSED |
| 7/20/2019 | Citi Thank You | Earn 60,000 points after spending $4,000 in 3 months | $95 annual fee | CLOSED |
| 9/12/2019 | AmEx Delta Gold | CLOSED | ||
| 8/13/2020 | Citi Aadvantage | 50,000 miles after $2,500 of purchases in 3 months | $95 annual fee waived initially | CLOSED |
| 12/22/2020 | Chase Sapphire Reserve | 4,000 | $95 annual fee | CLOSED |
| 7/6/2021 | Barclays Choice | Earn 75K points after spending $3,000 in 6 months | no annual fee! | |
| 8/10/2021 | AmEx Delta Gold | Earn 70K points after spending $2,000 in 3 months | $99 annual fee waived initially | CLOSED |
| 12/21/2021 | United Chase Credit Card | Earn 60K points after spending $3,000 in 3 months | $99 annual fee waived initially | CLOSED |
| 3/5/2022 | US Bank Altitude Connect | Earn 50K points after spending $2,000 in 4 months | $95 annual fee waived initially | CLOSED |
| 5/16/2022 | Barclays Aadvantage Aviator Business | Earn 80K points after spending $2,000 in 3 months | $95 annual fee | CLOSED |
| 4/11/2023 | US Bank Altitude Connect | Earn 50K points after spending $2,000 in 4 months | $99 annual fee | CLOSED |
| 4/28/2023 | Citi Aadvantage | Earn 75K miles after $3,500 of purchases in 4 months | $99 annual fee waived initially | CLOSED |
| 7/21/2023 | Bank of America Air France | Earn 70K points after spending $2,000 in 3 months | $89 annual fee | CLOSED |
| 11/3/2023 | Marriott Bonvoy | $250 + Earn 50K points after spening $3,000 in 3 months (11/13) | $99 annual fee + 35K award | CLOSED |
| 11/13/2023 | Chase | $900 to have $15K in savings for 3 mos and checking DirectDepoist | CLOSED | |
| 1/25/2024 | US Bank Altitude Connect | $99 annual fee | CLOSED | |
| 3/12/2024 | Discover | 0% until 6/17/2025 | ||
| 5/18/2024 | Wells Fargo Autograph | Earn 60K points after speing $4,000 in 3 months | $99 annual fee | CLOSED |
| 8/23/2024 | OneKey (Wells Fargo) | Earn $400 after spending $1,000 in 3 months. | no annual fee! | |
| 3/5/2025 | Synchrony Virgin Red Rewards | Earn 60K points after spending $3,000 in 90 days | $99 annual fee |
In case you’re wondering why I have trouble getting new credit cards now. Need to cool off for a while Also good inspiration if you’re looking for some free meals or free flights
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Good organization, I’ve never tracked my cards that way. But I’ve only been closely tracking my total financial picture since late 2024. Probably something I should start doing!
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Wow, you are well above the 5/24 rule today. That’s a lot of points and cash there.
I need to get back on the treadmill, I’ve been saying that for a while. I think I should cancel my SW card and get ready to take another run at the Companion Pass. I earned it once for Feb 2020 - Dec 2021, perfect timing on that, lol. I did manage to get two free flights out of the deal, including one to Maui, so not a total bust.
That’s impressive! I really should look into something like this. Does it obliterate your credit score?
Not especially. My score probably went from around 820 → 760 after opening around 5 cards in a year. It slowly went back up as the hard inquiries fell off and is fully recovered.
If you’re preparing for a mortgage in the next 3 years, steer clear IMO.
Nope.
Analogy: If you want to travel to another city in another state, the best bet is likely either driving on interstate highways or going to the airport and flying, or it may be taking the train. Depending on the exact distance and relative price difference between those, you will be able to get to your optimal strategy for travel. The optimal strategy is not likely to be walking to the other state. Nor is it going to be roller skating.
HYSA are like roller skates. Yes, better than walking. No, not as optimal as flying or driving (stock market)
HYSAs are overrated, to be sure. Why? They generate constant taxable interest, not deferred capital gains. They are taxed at the WORST possible rate. The yields are not really that high, unless you are comparing them to money market rates. They are NOT a good solution for any material portion of your net worth.
My suggestion on the ARM mortgage: Assuming you can qualify for such, I would refi the outstanding balance into a fixed rate mortgage as soon as the adjustable rate adjusts to a rate higher than current best market rates. Fixed rate mortgages are your friend. They protect your net worth from inflation. Actuaries should know this.
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By taxed at the worst possible rate, you mean, as bad as a lot of other assets other than stock or maybe real estate? yes, true.
But HYSA are just one of a bunch of assets taxed that way. Most interest bearing instruments outside retirement/tax-efficient vehicles are like that.
And wages are often taxed at higher rates although those aren’t really applicable.
Anyway, comparing the stock market to flying or driving only works if you factor in having over a quarter chance of an accident each year… kind of like flying a small plane or driving at a racetrack. So not a good place to put short term money.
I think we’re in the phase of the stock market which Peter Lynch described as everyone’s an expert. So much complacency about the stock market.
a