Earning interest on 0% CC cash advance checks

[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]

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]

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]

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]

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?

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.

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]

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]

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]

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).

 

[Peaceful_Warrior]

This is the card I recently got. And I already have received the cash, so I know it works.

1) Sign up for card
2) *If* you have another card with Citi, have Citicards transfer a significant portion of your old credit limit over to the new one to increase your credit limit.
3) Request Balance Transfer for full credit limit. Specify for them to send the check to YOU.
4) Go to bank and cash check. (In my case, I had the bank manager clear the check immediately for funds to be available)
5) Do with funds as you please.

If you read the fine print, "cash advance" only applies if you take the money out of an ATM directly or use a "Cash Advance" check. In this case, because you are specifically using a "Balance Transfer" agreement, you are able to take advantage of this situation fully even though to you it is the same.

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).

 

[JohnEyles]

This is the card I recently got. And I already have received the cash, so I know it works.

1) Sign up for card
2) *If* you have another card with Citi, have Citicards transfer a significant portion of your old credit limit over to the new one to increase your credit limit.
3) Request Balance Transfer for full credit limit. Specify for them to send the check to YOU.
4) Go to bank and cash check. (In my case, I had the bank manager clear the check immediately for funds to be available)
5) Do with funds as you please.

If you read the fine print, "cash advance" only applies if you take the money out of an ATM directly or use a "Cash Advance" check. In this case, because you are specifically using a "Balance Transfer" agreement, you are able to take advantage of this situation fully even though to you it is the same.

Ok, thanks, sounds good.

Another snafu, I just applied online and got instant approval for a whopping $4000.
I guess it's 'cause I put "retired" and annual income of $30K. I called and they said
they really can't look at increasing credit limit 'til I get the card (and have an acc't #)
in two weeks, and that even then, I'd probably have to wait 6 months. I have a
credit score above 800 and good net worth, but at least the latter does not seem to
be taken into account.

So how do you guys manage to establish a credit line, right off the bat, which is high
enough to make this scan worth pursuing ?

 

[Peaceful_Warrior]

That's brutal. In my case, I've had a card with Citi in one form or another for a few years now. When you get the card, ask them to increase the credit limit immediately.

What I've done is every few months I request another credit limit increase on every one of my credit cards. I just keep doing this regardless of whether I ever intend to use the credit or not.

I believe that up to about $20k-$25k, they don't require verification of income. After that point, they have asked me on more than one occasion. So just keep pushing them and when you get the card push them some more.

Also, if you read the terms on this card then you'll find the following: The balance transfer period is good for up to 12 months after the first balance transfer, *AND* the first balance transfer must be within 12 months from the date of the account opening.

So in theory, you could open the account and use it minimally (& pay off balances) and keep asking for increases. Then after about 10 months, make a small balance transfer (or a significant one if you have more credit). Then keep requesting more credit line increases until about 1 month before the 0% BT expires, pay off the old BT and then make your sizeable BT for the full credit limit.

Ok, thanks, sounds good.

Another snafu, I just applied online and got instant approval for a whopping $4000.
I guess it's 'cause I put "retired" and annual income of $30K. I called and they said
they really can't look at increasing credit limit 'til I get the card (and have an acc't #)
in two weeks, and that even then, I'd probably have to wait 6 months. I have a
credit score above 800 and good net worth, but at least the latter does not seem to
be taken into account.

So how do you guys manage to establish a credit line, right off the bat, which is high
enough to make this scan worth pursuing ?

 

[fluffy]

One other suggestion is to not max out the credit line when doing BTs. It's by no means an exact science, but maxing out cards can lead to negative consequences with some lenders (closing cards or lowering credit lines). It's something to avoid if you want to keep doing BTs year after year. I've had Chase close two of my cards after I BT'd two others to the max -- fortunately the two closed ones already had low credit lines and weren't important to me.

FWF common wisdom suggests keeping any one individual card under 90% utilization and keeping overall utilization across all cards as low as possible (under 50% being goal). This is where having high credit lines on many/all cards helps -- it keeps your overall utilization lower, even if you max out some of the cards.

Different people seem to have different luck with maxed out credit lines, but it's something to keep in mind...

 

[Peaceful_Warrior]

Good to know. Didn't really think/know about this before, but I guess once I make my first payment then I'll be below the max.

I only have 3 cards... two of which are with Citi, and I don't plan on doing more than one card BT offer right now since I will want my credit back in about a year.

However, when I start doing this more regularly (assuming the system still is viable) in a couple of years, I'll keep this in mind.

One other suggestion is to not max out the credit line when doing BTs. It's by no means an exact science, but maxing out cards can lead to negative consequences with some lenders (closing cards or lowering credit lines). It's something to avoid if you want to keep doing BTs year after year. I've had Chase close two of my cards after I BT'd two others to the max -- fortunately the two closed ones already had low credit lines and weren't important to me.

FWF common wisdom suggests keeping any one individual card under 90% utilization and keeping overall utilization across all cards as low as possible (under 50% being goal). This is where having high credit lines on many/all cards helps -- it keeps your overall utilization lower, even if you max out some of the cards.

Different people seem to have different luck with maxed out credit lines, but it's something to keep in mind...

 

[fluffy]

Sounds good, good luck with your stoozing

 

[Peaceful_Warrior]

Sounds good, good luck with your stoozing

Going well so far. I recently made a payment, and was able to immediately request another balance transfer for the amount of my payment.

Because my card has 0% BT and $0 fees on BT, this seems like a phenomenal deal. I just keep recycling the same payment so I don't actually have to make any minimum payments!

 

[justin]

I need to re-up my stash soon - anyone seen any good deals lately?

 

[SecondCor521]

I need to re-up my stash soon - anyone seen any good deals lately?

I found the best way is to look at cardoffers.com and the recent AOR thread at fatwallet.com. A third choice is to go to the major issuers' websites and poke around there.

2Cor521

 

[Peaceful_Warrior]

1) Anybody doing BT with Chase cards, and if so, what kind of max credit limits to they typically issue to customers with excellent credit?

2) To answer the question... Citi Diamond Preferred is solid - 12 months 0% at 3% transfer max of $250

However, if you can get the Citi Professional then that one cannot be beat by ANYBODY right now. I applied for the Diamond Preferred and Citi called me and coerced convinced me into getting the Professional.

0% for 12 months, $0 fees during the initial period.

It's insane, to say the least. I just plan to keep paying my $450 min payment and then doing another BT to get the money right back out of there... so I don't even have to ever make a minimum payment (in effect). It keeps my money working for me more and more.

I need to re-up my stash soon - anyone seen any good deals lately?