Comments on: Pitfalls of Using 0% Credit Card Offers To Earn Interest

By: leticia

leticia — Sat, 20 Dec 2008 18:10:28 +0000

can anyone tell me if a credit card company can charge you interest on a deffered interest? example: you have 0% interest for 6mths, you send in the last payment for the full amount late, your charged the full interest amount on the loan. can they charge interest on the outstading interest?

By: mogando

mogando — Thu, 20 Sep 2007 15:20:32 +0000

here’s my setup :

Chase – 28K
BofA – 37K
Amex – 78K

Total – 143K

Total fee = 75 (BoA) + 99 (Chase) + 0 (Amex) = $174 (0.12%)

First month interest at 5.10% APY = $608

Net profit after 1 month = 434

By: jim

jim — Mon, 16 Jul 2007 17:15:25 +0000

The easiest way is to request a balance transfer from the card and here's a walkthrough for the Citi balance transfer request, which is pretty easy. DO NOT REQUEST A CASH ADVANCE. I used to just apply for new cards that I knew had 0% balance transfer offers, sometimes old cards offer 0% so I would take advantage of those if they appeared.

By: kathleen van sandt

kathleen van sandt — Mon, 16 Jul 2007 16:00:01 +0000

Thanks for your comments on the Pitfalls mentioned….I can’t do the 0% CCthing yet because I need to re-finance in December, however, my naive question is, how do you get the money off the piece of plasticd into an account with hi yield? Is it like a cash advance, which is quite expensive?

Kathleen

What are the actual mechanics you do? And do you repeat this with different cards every year?

By: Tina

Tina — Mon, 31 Jul 2006 22:25:24 +0000

Making money off )% offers is worth the effort. Here are my responses to the aforementioned “pitfalls”.

Pitfall #1: You don’t own a home yet but plan on one relatively soon (or another capital purchase).
As a homeowner with a fixed mortgage intact, and cars paid off, this is not applicable. True if you are in the market shortly.
Pitfall #2: Read the fine print for actual 0% eligibility.
Solution – Use the card only for the 0% loan, not for further purchases.
Pitfall #3: You might forget a payment.
LOL. Seriously, setup automatic payments.
Pitfall #4: Unless you’re absolutely serious, you’re not really making enough money to really be worth it.
Hmmm.. Free money is free money no matter what the amount.
Pitfall #5: You lack the discipline to keep the cash in ING.
Huh? Just open a CD – “Autodiscipline”.

You Betcha I use those 0% CHECKS I get in the mail. Here’s my setup:

40K – My own cash
19.3K – Chase Mastercard
20K – Discovercard
24.4K – MBNA Card
12K – AT&T Universal Card

Total: $115700

Most checks are like cash advances, and are good for a time period of 3 ~ 12 months. To keep it safe I run 3 month CD cycles. I simply write them out to ETRADE BANK From there its a snap to open up a CD (currently 5% for 3 months!!). The one I just completed netted over $1400, in only 3 months!! And I’ll just continue this over and over and over….

Warnings:
Minimum payments close to $600/mo – must have that in mind.
Credit Score maybe affected, but with my cars paid and mortgage doing fine, don’t see a problem.
Fees total $200 from using the checks.
Have a usable CC for real purchases – I use a Citicard Rewards for day to day purchases.

Bottom Line: Is it worth it? Pays my property taxes and vacations. I’d say yes.

By: Tim

Tim — Thu, 02 Mar 2006 00:46:11 +0000

You make some good points. When I first read about it I thought it was kind of crazy. There are definite drawbacks. I think the one about dropping your credit score is probably not a huge issue for most people. If they were worried about that they should apply for the card in the first place. Anyway, interesting read. And since you’re going to try it now…good luck!