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0% Balance Transfer Credit Card Offer Daredevils

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Hmmmm… according to an MSN Money article, Bruce of Virginia has $50k in credit card debt that has netted him thousands of dollars in interested because of 0% APR balance transfer credit card offers socked away into high yield savings accounts, taking advantage of something that personal finance bloggers have been writing about for years now. Now, it makes you kind of wonder about the whole 0% balance transfer arbitrage game now that it’s hit “mainstream” with articles in MSN Money, tipped off probably on Weston’s Your Money forums, but credit card companies still offer them, often times with no fees.

Only recently did Discover add a balance transfer fee to their transfers, likely because a lot of folks were targeting Discover before Citi, the other balance transfer target; and so you wonder if the free money will come to an end?

Personally, I think the balance transfer arbitrage game is too risky and not really worth the effort (do you really want to have $50k in credit card debt, even if you’re making money?) so I stopped after my first round of offers. However, if you really do want some extra spending money and I don’t mind the hassle, it’s definitely an easy way to make some extra scratch and the steps are pretty straightforward.

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4 Responses to “0% Balance Transfer Credit Card Offer Daredevils”

  1. plonkee says:

    I get the impression (possible unfounded) that this has been going on for longer in the UK than in the US. Over here its been much more difficult to do for a while, but the deals still exist. The ones without transfer fees just tend to have shorter 0% interest free periods.

  2. Chris says:

    I would never do this, simply because I’m married. The stress that it would put my wife through, seeing all that debt in a ‘scheme’ to net a small return in interest, would never make it worth while.

  3. Kira says:

    Is this like the phenomenon that any trend that makes it to USA Today is officially over? has arbitrage jumped the shark? :)

    I am currently doing this backwards – I have the money to pay off the 0% that I have saved up over time (it was a balance transferred from a real card) but I am keeping it in the bank until it is time to pay it off.

  4. Etta says:

    Bit off topic, but a 0% offer almost cost me $50 I wasn’t expecting.

    I just paid off a card that had 0 % on balance transfer and purchases. I used it for purchases (was a cash rewards card, $100 bonus for first use)and just paid the monthly minimum til the 12 months was over. I then paid the full amount due, on time (actually early) prior to the end of the promotion period. So there was a 0 balance and had paid no interest for the 12 months. I continued to use the card estimating I had put about $250 on it in the next month. Got the bill. New balance was 320. Ok, I estimated wrong. About to pay it in full. Looked closer, NO!, they charged me $50 interest.
    Called Chase and they did credit it back to me, but had I not looked closely I would have just paid it. I figure their 2 cycle finance charge calculations caused this since I had kept a balance month to month for the 0 % interest period. So if I do this again on another card with similar offer guess I should not use the card for the month after the promotion period or remember to check and call and complain.


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