Making 0% and low APR balance transfers work for you

[remodelfl]

I personally do not use my credit cards much for purchases. I think they are vultures who are allowed usurious rates that would be considered loan sharking if anyone else did it. That said here is how I make money from my credit cards: Balance Transfers

I always get the 0% for x months and the 2.99% offers. So this is what I do.

I take out transfers on then and open CDs and momenymarket funds with the money. Lots of CDs are paying between 4.75 and 5.01% for the year and some have 3-12months CDs.

Last year in interest I racked up almost $3,000 and the cost to me to do that was less than $200 (some cards charge a BT fee).

 

I am now working on establishing reported business credit so I can get business cards and lines of credit so I have more money to play with

[miked0801]

Just did this today with my new lines. Maxed my Wells Line of Credit and placed the money in my business account, then distributed the debt to 4 or 5 smaller cards that have 0% for 12 months offers. I've already got someone (that I know and trust) ready to pay me 12% interest plus pts on this money secured by a strong deed of trust on a house they are fixing (short term hard money). That some nice income for free.

 

(PS, yes I have backup funds to pay this back in case something bad should occur.)

[LogicalOne]

Its an interesting concept to utilize if you have the cushion to do so.

Some cautionary methods should be noted:

1: credit card companies have at their discretion the right to change the APR at anytime on BT transfers.

2: Interest from the CD's are taxable income.

3: maxing out a credit card is a red flag to some creditors. Think about this prior to any other major purchases you may want to apply for if a loan is involved. Utilization (%)and ones fico will be affected.

 

If you are in a position to work within the system and guide your finances to a lucrative return, then by all means take the risk.

[hegemony]

I personally do not use my credit cards much for purchases.

and you lose all the rewards...too bad.

[GEORGE]

I personally do not use my credit cards much for purchases. I think they are vultures who are allowed usurious rates that would be considered loan sharking if anyone else did it. That said here is how I make money from my credit cards: Balance Transfers

I always get the 0% for x months and the 2.99% offers. So this is what I do.

I take out transfers on then and open CDs and momenymarket funds with the money. Lots of CDs are paying between 4.75 and 5.01% for the year and some have 3-12months CDs.

Last year in interest I racked up almost $3,000 and the cost to me to do that was less than $200 (some cards charge a BT fee).

 

I am now working on establishing reported business credit so I can get business cards and lines of credit so I have more money to play with

YOUR LOSS

[HawaiiArmyDude]

I have nearly 150k out right now in 0%, 1.9% and 2.9% BT's right now in CD's, I-Bonds, and Money Market Accounts. It's all about using the spread to your advantage. Check out the CD thread on FatWallet and you'll find some smoking deals on 6 month CD's.

[chatterweb]

I use 0% all the time. I have never paid interest on my cards, not once. After 6 years, I have it down.

 

I am currently not charging anymore, we are at 8600 in Ccard debt! Way out of our comfort zone! I like to stay around 2000, but, we bought a second home and DH was on disability...

 

Here is what I did:

Applied for:

Preapproved for citi simplicity 0% until Feb 07 owe 265.00

Chase 0% till April 07 owe 1200.00

Currently have:

 

Chase 0% until July 06 owe 4000K

 

Chase 0% until Feb o7 owe 3100K

 

Amx owe 66.00 I will pay it in full, otherwise I will get charged interest

 

I have never had this much ccard debt, but I will use OPM before I pay it off with my own E.F. money!!

[GEORGE]

I use 0% all the time. I have never paid interest on my cards, not once. After 6 years, I have it down.

 

I am currently not charging anymore, we are at 8600 in Ccard debt! Way out of our comfort zone! I like to stay around 2000, but, we bought a second home and DH was on disability...

 

Here is what I did:

Applied for:

Preapproved for citi simplicity 0% until Feb 07 owe 265.00

Chase 0% till April 07 owe 1200.00

Currently have:

 

Chase 0% until July 06 owe 4000K

 

Chase 0% until Feb o7 owe 3100K

 

Amx owe 66.00 I will pay it in full, otherwise I will get charged interest

 

I have never had this much ccard debt, but I will use OPM before I pay it off with my own E.F. money!!

CAN I HAVE SOME OF THAT $4,000,000 AT 0.00%

[chatterweb]

That was a big typo and I don't see any edit button, sorry!!!

[miked0801]

Lol - no worries. I'm currently well over 30K in CC debt at the moment (and feel nervous for some reason.) The APR on that debt is around 0.25% though and is good through Sept of this year. Nothing like OPM to boost one's yields

[Guest WhatNow?]

I personally do not use my credit cards much for purchases. I think they are vultures who are allowed usurious rates that would be considered loan sharking if anyone else did it. That said here is how I make money from my credit cards: Balance Transfers

I always get the 0% for x months and the 2.99% offers. So this is what I do.

I take out transfers on then and open CDs and momenymarket funds with the money. Lots of CDs are paying between 4.75 and 5.01% for the year and some have 3-12months CDs.

Last year in interest I racked up almost $3,000 and the cost to me to do that was less than $200 (some cards charge a BT fee).

 

I am now working on establishing reported business credit so I can get business cards and lines of credit so I have more money to play with

 

 

Hey remodelfl,

 

Think you could shoot me a PM or an email? Id like to ask you a few quesitons about your invetments. Ive always thought about doing that as well, and I'd like to discuss some strategies,etc. Let me know, and I'll try and post my email in a way spam bots wont collect it. It would be nice if I could send PMs

[hegemony]

I personally do not use my credit cards much for purchases. I think they are vultures who are allowed usurious rates that would be considered loan sharking if anyone else did it. That said here is how I make money from my credit cards: Balance Transfers

I always get the 0% for x months and the 2.99% offers. So this is what I do.

I take out transfers on then and open CDs and momenymarket funds with the money. Lots of CDs are paying between 4.75 and 5.01% for the year and some have 3-12months CDs.

Last year in interest I racked up almost $3,000 and the cost to me to do that was less than $200 (some cards charge a BT fee).

 

I am now working on establishing reported business credit so I can get business cards and lines of credit so I have more money to play with

 

 

Hey remodelfl,

 

Think you could shoot me a PM or an email? Id like to ask you a few quesitons about your invetments. Ive always thought about doing that as well, and I'd like to discuss some strategies,etc. Let me know, and I'll try and post my email in a way spam bots wont collect it. It would be nice if I could send PMs

caveat emptor

[andol469]

There's good threads on BT money on FatWallet. Some people have hundreds of thousands in BT money.

 

I don't do this because

 

1) I'm a student, and FAFSA only considers assets, not debt, so any BT money in a savings account would hurt my financial aid package

 

2) My CLs wouldn't allow me to make any decent interest anyway

[Chubroach]

I used the credit card ( credit check) 0% interest. They told me I had a 0% interest until "the billing period ending in January 06" Just to be safe I paid off the account in late December 05. In late January I received a bill with the interest for the period of December/January at 18% interest. I called to complain and was told that the interest started up DURING the period ending in January (which started in December).

 

After much complaining they waived the interest payment but it left a bad taste in my mouth. Pay it off a few months early to protect you from the small print.

[Nummerkins]

Once I start to get decent limits of 10k+ I'll be taking money out via BTs and investing it. For now, I charge every single thing I can to a CC and PIF. I've made hundreds so far on cashback cards without paying a single cent in interest.

[8004me]

I prefer to utilize fully liquid accounts or against a HELOC.

If the offer is long enough a CD might be attractive but I raley do this.

 

I take the conservative approach and only utilize 50% of a credit line though some would say my leaving money on the table is counterproductive.

As a sidebar to the discussion this makes the case for why one should have a significant amount of credit so they can take advantage of 0 or low APR money when opportunity presents itself.

[BBQ123]

If they ratejack you, I guess you'd have to close the CD early and PIF.

[GEORGE]

If they ratejack you, I guess you'd have to close the CD early and PIF.

"IF" YOUR TALKING ABOUT A BT YOU DON'T GET "JACKED" ON BT RATES AS LONG AS YOU PAY AS AGREED

[Marty716]

I prefer to utilize fully liquid accounts or against a HELOC.

If the offer is long enough a CD might be attractive but I raley do this.

 

I take the conservative approach and only utilize 50% of a credit line though some would say my leaving money on the table is counterproductive.

As a sidebar to the discussion this makes the case for why one should have a significant amount of credit so they can take advantage of 0 or low APR money when opportunity presents itself.

 

May I be stupid for a moment and ask you to explain this? Do you have a liquid account that pays what a 6 mo CD would pay?

[8004me]

I prefer to utilize fully liquid accounts or against a HELOC.

If the offer is long enough a CD might be attractive but I raley do this.

 

I take the conservative approach and only utilize 50% of a credit line though some would say my leaving money on the table is counterproductive.

As a sidebar to the discussion this makes the case for why one should have a significant amount of credit so they can take advantage of 0 or low APR money when opportunity presents itself.

 

May I be stupid for a moment and ask you to explain this? Do you have a liquid account that pays what a 6 mo CD would pay?

 

Well your right I could do slightly better on a 6 month CD assuming one of your other creditors didn’t get antsy and force you to liquidate incurring a penalty but it is more of a personal preference for liquidity.

 

Consider with the current offers from ING at 4.75%, HSBC at 4.8% and GMAC MM at 4.6% it seems prudent to leave a little money on the table versus a 6 month CD unless you know of a 6 mo CD paying above 5.6%.

 

To be fair the ING and HSBC offers are short term but the GMAC is not a teaser rate.

Of course all things are subject to change.

 

Now if you hedge your HELOC then your return could potentially be greater; for example mine is at Prime

-1 .01 so you get the idea.

 

It’s really what your preference, tolerance and to what level your going to have 0% money out there is, as well as your level of greed.

[Marty716]

I prefer to utilize fully liquid accounts or against a HELOC.

If the offer is long enough a CD might be attractive but I raley do this.

 

I take the conservative approach and only utilize 50% of a credit line though some would say my leaving money on the table is counterproductive.

As a sidebar to the discussion this makes the case for why one should have a significant amount of credit so they can take advantage of 0 or low APR money when opportunity presents itself.

 

May I be stupid for a moment and ask you to explain this? Do you have a liquid account that pays what a 6 mo CD would pay?

 

Well your right I could do slightly better on a 6 month CD assuming one of your other creditors didn’t get antsy and force you to liquidate incurring a penalty but it is more of a personal preference for liquidity.

 

Consider with the current offers from ING at 4.75%, HSBC at 4.8% and GMAC MM at 4.6% it seems prudent to leave a little money on the table versus a 6 month CD unless you know of a 6 mo CD paying above 5.6%.

 

To be fair the ING and HSBC offers are short term but the GMAC is not a teaser rate.

Of course all things are subject to change.

 

Now if you hedge your HELOC then your return could potentially be greater; for example mine is at Prime

-1 .01 so you get the idea.

 

It’s really what your preference, tolerance and to what level your going to have 0% money out there is, as well as your level of greed.

 

 

I understand your point now, thank you.