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Re: Another way to profit from credit cards
Old 06-29-2006, 10:27 AM   #61
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Re: Another way to profit from credit cards

Just curious, how does that work out with paying taxes. Can the IRS inquire where the money came from?
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Re: Another way to profit from credit cards
Old 06-29-2006, 10:30 AM   #62
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Re: Another way to profit from credit cards

Quote:
Originally Posted by maggieddd
Just curious, how does that work out with paying taxes. Can the IRS inquire where the money came from?
Sure, tell em CC's. They get their tax money from the 1099-INT's that report the interest income from your money markets or savings accounts.
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Re: Another way to profit from credit cards
Old 06-29-2006, 11:19 AM   #63
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Re: Another way to profit from credit cards

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Originally Posted by justin
Sure, tell em CC's.* They get their tax money from the 1099-INT's that report the interest income from your money markets or savings accounts.*
thanks
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Re: Another way to profit from credit cards
Old 06-29-2006, 02:39 PM   #64
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Re: Another way to profit from credit cards

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Originally Posted by cube_rat
I simply do not trust credit card companies under any circumstances.* They CAN* change the rules at a whim and send you inocuous looking term change notices in 2 1/2 pt font* in the mail.* For $600 extra bucks, it's simply not worth my time nor anxious energy to manage or worry about IMHO.
I agree somewhat that the credit card companies are not to be trusted.* I'm a lawyer and even I sometimes miss or misconstrue the fine print.* But if you've got the money invested in safe and liquid investment vehicles (i.e., I would opt for money market accounts or Emigrant Direct savings accounts over CDS), then even if you somehow goof or the credit card company tries to screw you, you can simply pay off the credit card immediately.*

Sure, you have to spend some time thinking about this stuff, but if you're perusing this site you probably already obsess about money to an extent.* This is a way to obsess while earning guaranteed easy money.* I can see why millionaires wouldn't want to spend the time just to collect $600 or more a year of free money, but if you're a mere mortal like me, it's nothing to sniff at.*
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Re: Another way to profit from credit cards
Old 06-29-2006, 02:56 PM   #65
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Re: Another way to profit from credit cards

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Originally Posted by SLC Tortfeasor
Sure, you have to spend some time thinking about this stuff, but if you're perusing this site you probably already obsess about money to an extent. This is a way to obsess while earning guaranteed easy money. I can see why millionaires wouldn't want to spend the time just to collect $600 or more a year of free money, but if you're a mere mortal like me, it's nothing to sniff at.
I'm getting around $4000/yr with the balances I currently have. I'm planning on putting most of this into paying down my mortgage. It'll knock it down from 22 years remaining to 12 years remaining if I keep paying an extra $4000/yr. Not bad for paying my dozen or so CC bills on time and occasionally going after new zero % CC deals.

I did have an issue with Bank of America. I mailed them the monthly payment and it was lost/stolen in the mail or by the bozos at Bank of America. I kept trying to get the 0% rate reinstated on the balance, but was never successful. They did refund the interest charges for the 6 months of the dispute, and I ended up just paying off the balance in full a few months before the regular due date.

It was a hassle, but no more so than calling up any other entity with which I transact business. My last call to Bank of America took about 18 minutes. 17.5 minutes in menu hell and waiting, then 30 seconds of explaining the situation, getting a resolution in my favor and terminating the phone call.
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Re: Another way to profit from credit cards
Old 06-29-2006, 03:59 PM   #66
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Re: Another way to profit from credit cards

Quote:
Originally Posted by SLC Tortfeasor
Sure, you have to spend some time thinking about this stuff, but if you're perusing this site you probably already obsess about money to an extent. This is a way to obsess while earning guaranteed easy money. I can see why millionaires wouldn't want to spend the time just to collect $600 or more a year of free money, but if you're a mere mortal like me, it's nothing to sniff at.
Great call!

I've been following this thread along with justin's own CC arbitrage thing, and I'd be lying if said I haven't been tempted. I may start out small, like 5k or 10k just to get past the nervousness.
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Re: Another way to profit from credit cards
Old 06-29-2006, 04:01 PM   #67
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Re: Another way to profit from credit cards

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Originally Posted by cube_rat
Great call!* *

I've been following this thread along with justin's own CC arbitrage thing, and I'd be lying if said I haven't been tempted.* *I may start out small, like 5k or 10k just to get past the nervousness.
Hey, worst that can happen is that it doesn't work and you are out a couple hundred bucks. Not too likely. This stuff is pretty simple. If you have online bill-pay you may even be able to automate the payments.
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Re: Another way to profit from credit cards
Old 06-29-2006, 04:41 PM   #68
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Re: Another way to profit from credit cards

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Just curious, how does that work out with paying taxes. *Can the IRS inquire where the money came from?
I suppose there could be a "lifestyle audit" if you are dipping into the money and buying stuff *
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Re: Another way to profit from credit cards
Old 06-29-2006, 05:01 PM   #69
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Re: Another way to profit from credit cards

Justin,

Tell me if I am correct, that means that you have approximately $80,000 on credit card debt if you are getting $4000/yr with a 5% interest.

Quote:
Originally Posted by justin
I'm getting around $4000/yr with the balances I currently have.* I'm planning on putting most of this into paying down my mortgage.* It'll knock it down from 22 years remaining to 12 years remaining if I keep paying an extra $4000/yr.* Not bad for paying my dozen or so CC bills on time and occasionally going after new zero % CC deals.

I did have an issue with Bank of America.* I mailed them the monthly payment and it was lost/stolen in the mail or by the bozos at Bank of America.* I kept trying to get the 0% rate reinstated on the balance, but was never successful.* They did refund the interest charges for the 6 months of the dispute, and I ended up just paying off the balance in full a few months before the regular due date.*

It was a hassle, but no more so than calling up any other entity with which I transact business.* My last call to Bank of America took about 18 minutes.* 17.5 minutes in menu hell and waiting, then 30 seconds of explaining the situation, getting a resolution in my favor and terminating the phone call.
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Re: Another way to profit from credit cards
Old 06-29-2006, 05:03 PM   #70
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Re: Another way to profit from credit cards

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Originally Posted by xmanz3
Justin,

Tell me if I am correct, that means that you have approximately $80,000 on credit card debt if you are getting $4000/yr with a 5% interest.
You are correct.
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Re: Another way to profit from credit cards
Old 06-29-2006, 05:04 PM   #71
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Re: Another way to profit from credit cards

What credit card companies are you using and where are you putting the money into?

Also, are you getting 0% interest for 12 months on all of them? When the 12 months expired, what is your plan B?
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Re: Another way to profit from credit cards
Old 06-29-2006, 05:08 PM   #72
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Re: Another way to profit from credit cards

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Originally Posted by xmanz3
What credit card companies are you using and where are you putting the money into?

Also, are you getting 0% interest for 12 months on all of them? When the 12 months expired, what is your plan B?
Mostly citicard. CapitalOne, Bank of America, Schwab Bank (MBNA I think), and Chase also gave me free/cheap money. I put the money in Vanguard Admiral Treasury Money Market fund. Effective pre-tax yield of a bit over 5% for me.

Plan B? I guess I'm still on plan A, which is to pay off the balances as they come due and to initiate new balance transfers. My next batch of bal xfers expire in November I believe.
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Re: Another way to profit from credit cards
Old 06-29-2006, 05:19 PM   #73
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Re: Another way to profit from credit cards

Did you just started doing this or have you been doing this for a while now? The only problem I forsee in the future is that your credit score will go down every time you apply for new CCs and that at some point you might have some problems trasfering all balances at 0% for 12 months.

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Re: Another way to profit from credit cards
Old 06-29-2006, 05:32 PM   #74
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Re: Another way to profit from credit cards

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Originally Posted by justin
Plan B?* I guess I'm still on plan A, which is to pay off the balances as they come due and to initiate new balance transfers.* My next batch of bal xfers expire in November I believe.*
The other rumor is that your home/auto insurance rates will get pounded by the drop in your credit score. Have you seen that yet, or is it an urban legend?
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Re: Another way to profit from credit cards
Old 06-29-2006, 05:43 PM   #75
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Re: Another way to profit from credit cards

Hmm

I played the game a little - only about 20k with Bank Of America currently.

And yes - my credit score went from 830 when I bought the house last year to 765 when I looked into a HELOC.

No word on insurance rates yet.

Think I'll pay it off come September and not look anymore.

And yes - I read it here.

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Re: Another way to profit from credit cards
Old 06-29-2006, 08:06 PM   #76
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Re: Another way to profit from credit cards

I was going to look at my spreadsheet for my story, I have out 40k out of an available 150k. I made the mistake over the years of closing some accounts and just started building up over the last couple of years. I recently did an application spree and netted over $1000 in freebies (ipod, gift cards mostly for gas, and just some free money). I probably will put some more of the 150k to work in my money market account....even some of those have sign up bonuses.

No significant change in my insurance and dont need a mortgage anytime soon. Never miss any payments. I have such a low mortgage, that I probably will use the money to pay it off by the end of the year or next, also.
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Re: Another way to profit from credit cards
Old 06-30-2006, 09:05 AM   #77
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Re: Another way to profit from credit cards

Quote:
Originally Posted by Nords
The other rumor is that your home/auto insurance rates will get pounded by the drop in your credit score. Have you seen that yet, or is it an urban legend?
My home and auto rates dropped by a few percent with this last renewal in June 2006 vs June 2005. The June 2005 renewal was before I really started heavily into CC balance transfers, so I'd have to say "no effect". Even if they double (from ~$1300/yr to $2600/yr), I'd still be way ahead with $4000/year gross from the CC bal xfer.
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Re: Another way to profit from credit cards
Old 06-30-2006, 09:08 AM   #78
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Re: Another way to profit from credit cards

Quote:
Originally Posted by xmanz3
Did you just started doing this or have you been doing this for a while now? The only problem I forsee in the future is that your credit score will go down every time you apply for new CCs and that at some point you might have some problems trasfering all balances at 0% for 12 months.
I've done 0%/low rate balance transfers for a few years. I used them to finance about 1/3 of my house purchase about 2.5 years ago (I didn't get a mortgage at the time of purchase, instead paying "cash").

I started a little over 1 year ago aggressively obtaining balance transfer offers in order to make as much money as possible.
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Re: Another way to profit from credit cards
Old 06-30-2006, 09:11 AM   #79
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Re: Another way to profit from credit cards

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Originally Posted by Maddy the Turbo Beagle
No significant change in my insurance and dont need a mortgage anytime soon. Never miss any payments. I have such a low mortgage, that I probably will use the money to pay it off by the end of the year or next, also.
I've thought about putting a part of the bal xfer money into paying off my mortgage in part or in whole. Then getting a HELOC for liquidity purposes, and just in case I screw up and default somehow and have to repay some/all of the bal xfers. Maybe I'll do this once the MM yields are actually less than my mortgage interest rate.
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Re: Another way to profit from credit cards
Old 06-30-2006, 09:51 AM   #80
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Re: Another way to profit from credit cards

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I've thought about putting a part of the bal xfer money into paying off my mortgage in part or in whole.* Then getting a HELOC for liquidity purposes, and just in case I screw up and default somehow and have to repay some/all of the bal xfers.* Maybe I'll do this once the MM yields are actually less than my mortgage interest rate.
Yep, a heloc is a good idea for backup to start with. I also have 2 credit profiles in my household to use and make sure that cards that carry a balance arent on the other as authorized user (so dont get reported to the other). Use the authorized user to report old accounts to improve each profile.
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