Earning interest on 0% CC cash advance checks

[bosco]

Quote:

Originally Posted by clifp Personally, since I have no further need of credit, I don't care what my score is.

from what I've heard, your car insurance, homeowner insurance, and a lot of other things depend on your credit score. Maybe you don't care what you pay for those?

[SecondCor521]

Quote:

Originally Posted by bosco from what I've heard, your car insurance, homeowner insurance, and a lot of other things depend on your credit score. Maybe you don't care what you pay for those?

They usually only check your credit score when you first purchase the insurance. In theory they could do soft pulls occasionally to check your credit score periodically while you are a current customer, but I have not had that experience.

I pay $43.20 per month for 300/500 coverage on my car insurance and $268.04 annually for my homeowner's through USAA.

2Cor521

[maddythebeagle]

errr. that and most people that do this and know what they are doing....dont max out their cards...max them out makes you look like a risk and some card companies will cut your limits or close accounts....no need to completly trash your credit if you have a long view of getting better offers and more credit...

[justin]

I guess I'm a "credit risk" Citicards sent me 3 invites to join their "payment partner program". Get this - I pay off my 0% credit cards on time (the 0% offer is up anyway), and they give me $550 per card for merely paying my bills on time. $1650 (more) free money.

[clifp]

Quote:

Originally Posted by bosco from what I've heard, your car insurance, homeowner insurance, and a lot of other things depend on your credit score. Maybe you don't care what you pay for those?

As much as possible I self-insure, obviously liability for auto insurance and home owner insurance are not practical to self-insure.

My point being that I have very good credit which I maintain by paying my bills on time, I don't worry about the minor credit hits that occur from soft inquiries, credit utilization etc. As long as CC companies are willing to loan me 5 figures amount at 0 to 1% I am happy to take their money and invest at a higher rate.

[Peaceful_Warrior]

Out of curiosity, for those who do 0% balance transfer tricks, does anybody make the minimum payment, then immediately after payment do another balance transfer to get the money back, and then just keep re-using the same money to make the minimum payments every month?

[Arc]

Quote:

Originally Posted by bosco to make any money at this is too much like work.

Speaking of work - wonder if there is an entreprenurial opportunity to manage this deal for others. You transfer your money to me - I invest it for you - I get a sliver - I manage all repayments - and if I screw up, your credit goes to hell! Sound like the perfect low-risk endeavor I've been searching for. PM me if interested - will need social security # and all bank account numbers to get started.

[fluffy]

Quote:

Originally Posted by Peaceful_Warrior Out of curiosity, for those who do 0% balance transfer tricks, does anybody make the minimum payment, then immediately after payment do another balance transfer to get the money back, and then just keep re-using the same money to make the minimum payments every month?

No. Many/most credit card issuers charge a fee for each balance transfer, plus doing this monthly would be a ton of hassle for very little reward. Minimum payments are in 1-2% range, so even after 12 months of minimum payments you still have at least 75% of the original balance sitting in high-yield savings. After 12 months (or whatever the 0% term happens to be) you just pay everything back, wait for the payoff to register on the credit report/score, and repeat the process with some new credit card applications, credit line transfers to new offers, and taking out much higher amounts at 0%

[Goonie]

Quote:

Originally Posted by fluffy Both Citi and Chase still have a lot of capped offers though BoA/MBNA seems to have gone with 3% flat everywhere which kills the deal.

I just got an "Important Change" letter yesterday from Citi.......still 3% minimum for BTs....However they have dropped their $75 maximum BT fee.....there is now NO cap! Now all BTs are 3%...whether it's $100 or $10,000.

I'll stick with my Chase accounts...0% for X months, or 1.9% until the balance is paid off.

[fluffy]

Quote:

Originally Posted by Goonie I just got an "Important Change" letter yesterday from Citi.......still 3% minimum for BTs....However they have dropped their $75 maximum BT fee.....there is now NO cap! Now all BTs are 3%...whether it's $100 or $10,000. I'll stick with my Chase accounts...0% for X months, or  1.9% until the balance is paid off.

I got the exact same thing from Citi yesterday as well for my highest-limit card with them I "opted out" which gives me enough time to do one more BT on that card. But I sure hope this isn't a glimpse of their new BT policy.

Quick glance at their current offers suggests the cap is there for the new cards but for some it's $250 -- still worth doing for large credit lines. But AAdvantage, at least, still shows capped at $75. Upromise shows fee waived altogether.

[Peaceful_Warrior]

The deal I have is 0% BT for a year with no balance transfer fees... if it weren't for the No Fees clause, I wouldn't even consider this.

The way I see it, I can keep more principal working for me. And it's not really that much hassle to go online, request another check and deposit it.

So.... if you had 0 fees and 0% BT, is there anything preventing somebody from re-using the same money over and over to pay the minimum payment until it comes due?

Quote:

Originally Posted by fluffy No. Many/most credit card issuers charge a fee for each balance transfer, plus doing this monthly would be a ton of hassle for very little reward. Minimum payments are in 1-2% range, so even after 12 months of minimum payments you still have at least 75% of the original balance sitting in high-yield savings. After 12 months (or whatever the 0% term happens to be) you just pay everything back, wait for the payoff to register on the credit report/score, and repeat the process with some new credit card applications, credit line transfers to new offers, and taking out much higher amounts at 0%

[fluffy]

I haven't paid very close attention (because of that same low reward/hassle ratio -- Citi's minimum payments were just ~1%) but I think after my initial BT with Citi, the 0% no-fee offer was no longer available. After I paid the balance in full the offer came back.

You could just go ahead and do the initial BT now and then, if the 0% no-fee offer is still available, try your "recycling" minimum payment strategy.

[Peaceful_Warrior]

After reading your post, I decided to call Citi cards and they confirmed over the phone that once I make payments (I have the Citi Professional Thank You) and have any available credit, that credit can be used for any purpose including further balance transfers.

Since my BT hasn't registered on the account yet, we had to go through the 'hypothetical' conversation of what happens after I make a payment (ex: $5,000) and what I can use the remaining credit for.

At the end of the call she commented that I had the 0% BT situation, and kind of smirkingly said, "So this isn't going to be hypothetical anymore, is it?" And I said, "Nope!"

Woo-hoo!

Time to jam some cash into my illiquid investment at 10% instead of the MMA I was going to have to put about 20% to cover my minimum payments.

Quote:

Originally Posted by fluffy I haven't paid very close attention (because of that same low reward/hassle ratio -- Citi's minimum payments were just ~1%) but I think after my initial BT with Citi, the 0% no-fee offer was no longer available. After I paid the balance in full the offer came back. You could just go ahead and do the initial BT now and then, if the 0% no-fee offer is still available, try your "recycling" minimum payment strategy.

[SecondCor521]

Quote:

Originally Posted by Peaceful_Warrior So.... if you had 0 fees and 0% BT, is there anything preventing somebody from re-using the same money over and over to pay the minimum payment until it comes due?

Other than hassle factor vs. reward ratio, nope.

2Cor521

[samclem]

I cannot believe this is all worth the trouble.
-- The card companies can change the rules at any time, and they do it frequently. So, you have to read every piece of junk mail you get. You have to mentally keep up with all the rule changes for each card.
-- You have to remember to make the payments, or set up/monitor an autopayment system.
-- You have to continually scout for the next good deal if you want to continue the game
-- One mistake at any time flushes your gains down the toilet and puts a big hit on your credit.

I agree with bosco (there's one for the books!). At least in my case, this is definitely too much trouble for the meager payoff/high risk. I guess if you enjoy this type of thing and consider it a hobby it might be a different story. Wouldn't a more action-packed hobby be better? (like, say, memorizing pi to the 3000th place?)

[Peaceful_Warrior]

Depends on how much somebody considers their time worth, how detail oriented they are, and how disciplined they are to stick with a systematic approach.

I happen to be very detail oriented, and for about 10 minutes a month maximum plus 30 minutes up-front, I get an additional $2,000-$3,000 annually after taxes.

So when somebody offers to pay me $3,000 for less than 3 hours of my time, I consider it one of the best raises I've ever gotten. How many people do you know would quit their jobs for $1,000/hour pay?

When companies change the rules 'at any time' they have to notify you and you can opt out of the changes until your current agreement is completed. As long as somebody is willing to open their mail and read the first page of whatever their own credit card company sends them, they'll stay on top of that.

As for the payments, it's really not that hard to add one more bill to the list of 'must pay' each month. Especially when there's auto-pay, then once that's set up there's even less to do other than to verify the payment was applied. Since I have Fidelity Full View, I check all my balances & new transactions on credit/assets every morning so it doesn't actually take any more effort from me to verify if the payment got in.

Scouting new deals is not difficult. Basically, the person can do a few things:
- Post a message on this forum or on the FatWallet Finance forums.
- Go to Citicards & Chase websites and just check out each of the cards until they find the 0% BT with low fees.

I think this requires a lot less effort than people realize. It sounds like a lot of effort, but for those with discipline and systems in place it becomes hassle-free money.

[fluffy]

Agree with Peaceful_Warrior. It's by far the best dollar-per-hour job I'll ever have. Though I have to admit I enjoy the game as well 8)

Also, I have never come across or heard of a situation (and FatWallet Finance forum is full of people doing this) where the credit card company changes the terms of the 0% BT offer in such a way that one has to pay off the balance immediately or lose money. I suppose it's possible in theory but does not actually happen. And even then, simply keeping the money liquid (high-yield savings) addresses this eventuality.

[Sue J]

Quote:

Originally Posted by Peaceful_Warrior I think this requires a lot less effort than people realize. It sounds like a lot of effort, but for those with discipline and systems in place it becomes hassle-free money.

I agree. For some of us it's a nice little hobby. My son started college in 2002 and I've been using 0% cards since then for excess college expenses. I haven't paid a balance transfer fee in all this time and I try to get the longest 0% term I can. They used to be 9-12 months but my last one was 18 months, hassle free. This one ends in June so I've been carefully reading all the offers that come in, looking for the next one. So far the best one is a Chase one that ends in July 2008.

I'd be willing to continue doing these for however long they last. I always wonder though, as the economy goes through changes, will credit card companies stop offering 0% introductory rate cards?

[Peaceful_Warrior]

Quote:

Originally Posted by Sue J I always wonder though, as the economy goes through changes, will credit card companies stop offering 0% introductory rate cards?

Probably.... or the 0% will be ratcheted down to 6 months or less.

[JohnEyles]

The Citibank Professional card seems to have zero balance-transfer fee
on their 12-month 0% offer. But I'm still not clear on how I can easily
turn the BT into cash. They explicitly state that the 0% APR introductory
offer does NOT apply to cash advances, so it's hard to believe they don't
somehow keep you from effectively doing this (by applying a negative
balance to another card from which you then request a cash refund, or
whatever).