Credit Card Arbitrage - Round 2?

[Another Reader]

A few days ago I received an offer from the Barclays credit card folks. I can balance transfer or deposit one of the enclosed checks into my checking account and pay 0 percent interest until next July 1. Not a full year, but 8 months. So...what's the transfer fee? Zero. Zilch. Nothing.

If I put the money in their savings account, that's 1.9 percent currently. Vanguard's Treasury Money Market fund is 2.08 percent.

Am I missing something? It certainly would drop the credit score if I took the full amount. Did anyone else get this offer and take advantage of it?

 

[OldShooter]

I have a SCORE client who does this, primarily to get points for vacation travel, and claims to be very successful. She runs an accounting firm and is very detail oriented. Trying to play these games would drive me nuts.

 

[Fedup]

The check sometimes has 3% fee. This is why I don’t play this game. Check the small prints.

 

[audreyh1]

I’m pretty much done with chasing credit cards. Since we froze our credit it’s not convenient anymore. I haven’t opened up an account at a new bank or credit union either. I’ve go too many.

I think we’ll do a slow attrition.

 

[MrsHaloFIRE]

This exact type of arbitrage was my hobby as a newlywed. Organized it with a spreadsheet, automated my minimum payments, announced at dinner the night i was "in the black" on the fees. Banked the profits. Totally more fun than playing solitary on my PC.

 

[njhowie]

Since you're playing credit card arbitrage, don't settle for rates like 1.9%, 2.08% - pfft. Take it to the next level and churn it through some bank bonus offers.

You can still jump over to Ally and sign up for the 1% bonus offer if you go to the site, enter your email address, and simply open the account today - you still have until 10/31 to fund it. Leave the funds until Jan 15 and on Feb 15 they will give you 1% cash bonus. You can use it in conjunction with their Online Savings, Money Market, Interest Checking, or CD account including the no-penalty CD yielding 2.1% for $25k or more.
https://www.allypaybacktime.com

Others worth a look:
1. HSBC checking account - open and keep $1500 balance for 90 days, they'll give you $200 cash bonus (that's over 50% APY). They credit the bonus within 8 weeks after the 90 days. Can do it for higher amounts as well, but the $200 for $1500 is the best bang for the buck.
https://www.us.hsbc.com/checking-accounts/campaigns/offer-2018/

2. Citibank has a number of bonus offers - I like the $200 for $5000 for 60 days (24% APY)
https://banking.citi.com/cbol/18/checking/200/default.htm
https://banking.citi.com/cbol/18/checking/400/default.htm
https://banking.citi.com/cbol/18/checking/500/default.htm
https://banking.citi.com/cbol/18/checking/600/default.htm

3. Capital One $200 for $10,000 for a couple weeks. Make deposit, they credit very quickly, can withdraw everything immediately with no fees or clawback. That's on top of 1.85% money market rate.

https://www.capitalone.com/offer200/
https://www.capitalone.com/savings500/

4. Discover is another good one that credits the bonus very quickly and you can withdraw everything immediately with no fees or clawback. Open account by 10/31, fund by 11/14, cash credited by 11/28. That's on top of 1.9% interest rate.

https://www.discover.com/online-ban...bk-ggl-bndOSApromo&src=SO18&van=Dbank&TPR=069

 

[Another Reader]

The check sometimes has 3% fee. This is why I don’t play this game. Check the small prints.

No fee. I get a lot of these, and they almost all go straight to the shredder because of the fees.

This was a very popular sport here a few years back when rates were higher. Haven't heard from Brewer12345 here recently, but he was one of the players.

 

[brewer12345]

Heh, there was a time I had 6 figures outstanding with the proceeds banked in a savings account. At prevailing risk free rates, I am not sure it is worth the trouble.

 

[Fedup]

No fee. I get a lot of these, and they almost all go straight to the shredder because of the fees.

This was a very popular sport here a few years back when rates were higher. Haven't heard from Brewer12345 here recently, but he was one of the players.

That seems to good to be true, I’m surprised I never got any. I did have Hawaiian Airlines MC with Barclays and I noticed the 3% cash advance fee always.

 

[Another Reader]

Heh, there was a time I had 6 figures outstanding with the proceeds banked in a savings account. At prevailing risk free rates, I am not sure it is worth the trouble.

Probably not. But we can hope...

 

[Golden sunsets]

Since you're playing credit card arbitrage, don't settle for rates like 1.9%, 2.08% - pfft. Take it to the next level and churn it through some bank bonus offers.

You can still jump over to Ally and sign up for the 1% bonus offer if you go to the site, enter your email address, and simply open the account today - you still have until 10/31 to fund it. Leave the funds until Jan 15 and on Feb 15 they will give you 1% cash bonus. You can use it in conjunction with their Online Savings, Money Market, Interest Checking, or CD account including the no-penalty CD yielding 2.1% for $25k or more.
https://www.allypaybacktime.com

Others worth a look:
1. HSBC checking account - open and keep $1500 balance for 90 days, they'll give you $200 cash bonus (that's over 50% APY). They credit the bonus within 8 weeks after the 90 days. Can do it for higher amounts as well, but the $200 for $1500 is the best bang for the buck.
https://www.us.hsbc.com/checking-accounts/campaigns/offer-2018/

2. Citibank has a number of bonus offers - I like the $200 for $5000 for 60 days (24% APY)
https://banking.citi.com/cbol/18/checking/200/default.htm
https://banking.citi.com/cbol/18/checking/400/default.htm
https://banking.citi.com/cbol/18/checking/500/default.htm
https://banking.citi.com/cbol/18/checking/600/default.htm

3. Capital One $200 for $10,000 for a couple weeks. Make deposit, they credit very quickly, can withdraw everything immediately with no fees or clawback. That's on top of 1.85% money market rate.

https://www.capitalone.com/offer200/
https://www.capitalone.com/savings500/

4. Discover is another good one that credits the bonus very quickly and you can withdraw everything immediately with no fees or clawback. Open account by 10/31, fund by 11/14, cash credited by 11/28. That's on top of 1.9% interest rate.

https://www.discover.com/online-ban...bk-ggl-bndOSApromo&src=SO18&van=Dbank&TPR=069

Actually the Ally offer is no longer available if the depositor did not register by 10/21.


Sent from my iPad using Early Retirement Forum

 

[njhowie]

Actually the Ally offer is no longer available if the depositor did not register by 10/21.

Actually, as the timestamp on my post shows, I posted it at 5:42PM yesterday and the offer was good until 11:59PM.

...enter your email address, and simply open the account today - you still have until 10/31 to fund it.

 

[Another Reader]

In my case, I preserved the option by registering. Not sure I am going to bother with any of this, however. I kind of agree with Brewer in the other thread. Not really worth the effort.

 

[njhowie]

In my case, I preserved the option by registering. Not sure I am going to bother with any of this, however. I kind of agree with Brewer in the other thread. Not really worth the effort.

How much money are we talking about? $10k? $20k? $5k?

 

[audreyh1]

In my case, I preserved the option by registering. Not sure I am going to bother with any of this, however. I kind of agree with Brewer in the other thread. Not really worth the effort.

What post in what other thread?

 

[anonymous_fred]

The check sometimes has 3% fee. This is why I don’t play this game. Check the small prints.

Depending on your spending profile, even with a 3% transfer fee you can still do pretty well. I used to regularly charge $3K - $4k/month on credit cards (we paid them off every month). This was back in the day of 18-month 0% cards. I'd get a new card with a $50K limit, set up an auto-payment for the minimum, and then put our expenses on it until it was full. The money that normally would have gone to pay off the credit card would stay in a high-interest money market. When the card filled up I'd move on to the next card. For a while I had $75K or so on various cards, which represented maybe $4K/year of interest I was receiving, without every transferring a balance.

With money market rates low right now, and my Alliant Visa giving me 3% cash back it doesn't make a lot of sense to me at the moment. But if interest rates creep back up this may become a viable strategy again.

 

[RunningBum]

Kind of related to all this, I got an email from PenFed today that they are cracking down on "abuse/misuse and fraud" to get reward points.

We may begin an investigation if evidence of account abuse/misuse or fraud is seen. Some examples of abuse/misuse and fraud include:​

• Using your Account in an abusive manner for the primary purpose of acquiring Points
• Using your Account other than primarily for personal, consumer or household purposes
• Point redemptions that you didn't authorize

They go on to say they can take away points, keep them from accumulating anymore, close your card, or even sue you to get back claimed awards.


I guess they are talking about people finding non-spending ways to race up expenses and immediately pay it off, or doing things like putting business expenses on it.

 

[jazz4cash]

Depending on your spending profile, even with a 3% transfer fee you can still do pretty well. I used to regularly charge $3K - $4k/month on credit cards (we paid them off every month). This was back in the day of 18-month 0% cards. I'd get a new card with a $50K limit, set up an auto-payment for the minimum, and then put our expenses on it until it was full. The money that normally would have gone to pay off the credit card would stay in a high-interest money market. When the card filled up I'd move on to the next card. For a while I had $75K or so on various cards, which represented maybe $4K/year of interest I was receiving, without every transferring a balance.



With money market rates low right now, and my Alliant Visa giving me 3% cash back it doesn't make a lot of sense to me at the moment. But if interest rates creep back up this may become a viable strategy again.

I don’t see how you can make out transferring balances with a 3% fee upfront which is 5.66% apr for 1 yr except saving interest vs a higher rate card. In the explanation above you say you never transferred a balance. I pay minimums on a few cards until NFCU runs their 0%/0 fee promo around March. Then I transfer everything I can including some 2 yr no interest balances from Home Depot and Sychrony. It seems credit is cheaper than cash these days if you can follow the rules.