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Trying to play the spread on my CC.
Old 04-21-2009, 06:48 PM   #1
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Trying to play the spread on my CC.

I just got some convenience checks in the mail with 0% int for 6 months. I am thinking about taking the max putting it in my MM account which is currently at 3%. However, they didn't bump my limit up to what I wanted. I went from 16 to 36, but was asking for 50.

They asked me why I wanted an increase. Perhaps I should have told them I was doing some home improvements instead of the truth?

To really make this offer worth it, I would need at least 45k limit.

Anybody play spreads like this recently have trouble getting a higher limit?

JD
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Old 04-21-2009, 06:50 PM   #2
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Did you read the fine print about balance transfer or cash advance fees? At least one of my cards has a 3% "cash advance fee" on checks written against it, which would negate your MMF interest for a year, and that assumes the latter doesn't keep falling in yield.
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Old 04-21-2009, 06:54 PM   #3
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Did you read the fine print about balance transfer or cash advance fees? At least one of my cards has a 3% "cash advance fee" on checks written against it, which would negate your MMF interest for a year, and that assumes the latter doesn't keep falling in yield.
Yes. It has a 3% fee (maximum $75, though).

I called and got all my questions answered to my satisfaction. Just couldn't get a big enough limit to get 3% in the MM. Probably cause they didn't like my answer of why I wanted it.
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Old 04-21-2009, 09:03 PM   #4
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Yes this is called credit card arbitrage. The fatwallet finance forums have thousands of people that do this. The best place to put it right now is reward checking paying 5.25% from Advanta, AmerciaNet, and Redneck bank(no lie). They are the same family of banks from Witchita. You have to perform 10 debits a month, but just buy minor things that you need or otherwise would get that are under $10, or just go to the gas station and put like 5 cents of gasoline in on the debit card.

Otherwise there is a stickied thread at the front of the forum that practically lists every good reward checking, high yield savings, MMAs, etc. in the country. When you do this you want to things. No risk investments and liquidity. Don't put it in a the stock market, and if you put it in a CD(first of all don't pay that well right now), and if god forbid you had a universal default you don't want to be forced into breaking the CD.

Edit: The big credit card arbitragers aren't getting what they are asking for either in this credit environment. Actually them moving you from 16 to 36 is more impressive than most I've seen.
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Old 04-21-2009, 10:51 PM   #5
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This is called stoozing and there are plenty of threads here on it. I only go for 0% interest, 0% fee. I also need to make at least $1,000 a year before it is useful to me. I have just one of these active at this time. I told the credit card company that I was taking the money to put it in a CD at 5%. They didn't seem to care. The phone rep wanted to know how to do all this so she could try it herself.
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Old 04-21-2009, 11:28 PM   #6
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I haven't seen a an balance transfer offer with a capped $50 or $75 fee in more than a year. I still get offers for cards with credit lines in excess of $10-20K but between the 3% fee and the ridiculous low money market cd rates, I don't think this is generally profitable any more.
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Old 04-22-2009, 06:30 AM   #7
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I haven't seen a an balance transfer offer with a capped $50 or $75 fee in more than a year. I still get offers for cards with credit lines in excess of $10-20K but between the 3% fee and the ridiculous low money market cd rates, I don't think this is generally profitable any more.
Agreed - and it gets worse. I noted the fine print on a recent offer said effective June 1 the 3% fee was increasing to 4%.
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Old 04-23-2009, 02:44 AM   #8
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They still exist. They are rare, but the low point was in November/December where there was only one bank--Iberia Bank that had a reasonable capped fee. After that it has gotten better. Not quite to the levels of 07, but still very profitable if you know where to get them, and you know the intricate details of credit reports, etc.

And its called Credit Card Arbitrage. Run a google search. Stoozing pulls up like a few items, Credit Card Arbitrage pulls up like thousands. And its actually credit arbitrage.
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Old 04-23-2009, 10:43 AM   #9
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In my "old fogy" opinion, trying to get something for nothing is a
waste of time. This subject reminds me of John Galt ...... is he still
kicking?

Cheers,

charlie
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Old 04-23-2009, 10:46 AM   #10
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... a waste of time. This subject reminds me of John Galt ......


Rumor has it he's moved on to dive in bigger and better dumpsters greener pastures.
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Old 04-23-2009, 11:24 AM   #11
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Correction. Redneck, advanta, and americanet have been 4% for some time. The best now is coulee at 5 and a few others at mid 4s.

So by that definition, investing is a waste of time than, too?
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Old 04-25-2009, 07:40 AM   #12
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Here is an interesting summary of the credit card balance transfer fee issue. Generally, it is no longer a profitable venture to arbitrage a credit card.
A Brief History of Balance Transfer Fees
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Old 04-25-2009, 01:59 PM   #13
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A game I still see out there is money for opening bank accounts. Saw one the other day, open a checking acct., they add $50.00. I'm going to pass on that one as I already have three checking accts.
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Old 04-25-2009, 03:20 PM   #14
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I can tell you Gumby, if you know where to look it is still pretty profitable to engage in credit card arbitrage, but I'll admit it will never be as good as it was a couple years ago.

Today, there are usually 1 or 2 cards at a given time that are feeless. Another 10 or so that have capped fees between 50-75, and another couple dozen that have capped fees at 99. 99/20000= .495%. I can easily make a descent spead on .5 percent. 5.25%*20000= 1050 - 99 = $951 in profit in one year on one card.
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Old 04-25-2009, 07:35 PM   #15
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I can tell you Gumby, if you know where to look it is still pretty profitable to engage in credit card arbitrage, but I'll admit it will never be as good as it was a couple years ago.

Today, there are usually 1 or 2 cards at a given time that are feeless. Another 10 or so that have capped fees between 50-75, and another couple dozen that have capped fees at 99. 99/20000= .495%. I can easily make a descent spead on .5 percent. 5.25%*20000= 1050 - 99 = $951 in profit in one year on one card.
Oh, I still stooze, but it is much, much harder and less profitable than years past. I have $25k out through May 2010 at 0%, no balance transfer fee. I have another $10k coming due in June 2009. I'll probably role to a $75 capped BT fee, O% at that time.
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