Does anyone fund their savings account with 0% balance transfers?

[JoyJoy]

Just wondered if anyone takes out 0% balance transfers and put the money in their high yield savings accounts while paying the minimum due on the credit card(s) each month?

Seems like a good idea to me if you actually save the money and pay off your 0% offer a month before the balance is due. Interest rates on savings should go higher than 4.8% soon now that the Feds have raised interest rates again!!

[shelbylovesmelby]

that's an interesting idea.

I've only heard of people taking out a new card @ 0% and when the 0% is up they get another 0% card balance transfer the other over & close the first one out.

[twins0203]

I am currently doing this. It works great once you work out getting the money in the account. Some CC issuers will deposit directly into your account, while others wont. It is a great way to make a few extra bucks if you can keep from touching the borrowed money.

[mbhunter]

JoyJoy if you do this:

1) Make sure you know the CC terms and conditions like the back of your hand.
2) Make sure that you are good with details.

You end up giving back all of the interest you earn, and then some, if you trigger the default rate on your card by any number of methods, or by forgetting to pay back the balance before the 0% period ends.

[goodtosave]

It's a good way to make some money. I am doing some of it.

But I agree that you have to stay on top of it. If at all possible, use bill pay to automatically pay them the 1.5% to 2% minimum every month for the term. And then also pre-program your bill pay or other accounts to send them the remaining balance before the term ends.

I have read this a while ago that some credit card companies actually tracks your credit very closely. And anytime there's a substantial change that affects your credit, they could modify the term and bump you off the 0% into their standard rate. Basically, if they deem you to be much more risky than when you got the 0%, they could change the terms. Now, I am not sure if your credit card company has this policy but it's better to check.

So you almost have to check your balance every month to be safe.

[JoyJoy]

I really appreciate your responses to this question. I know some people who are doing this with no problem at all. They tell me it's free money to use any way you want to use it as long as you PIF your 0% offer a few weeks before the due date. I would agree that one has to be disciplined not to spend the money in that high yield saving account or they will defeat the purpose!

I would have to get used to just paying the minimum on my credit card accounts and faithfully depositing the difference that I should be paying on the credit cards to my account at HSBC or Emigrant each month! I can do it as I am a very disciplined person. My main concern was if the credit card companies (Citibank, Cap1 or HSBC) would give me any problems. GoodtoSave, I like that idea of having the minimum automatically taken out. Thanks!

[JoyJoy]

Originally Posted by mbhunter

JoyJoy if you do this:

1) Make sure you know the CC terms and conditions like the back of your hand.
2) Make sure that you are good with details.

You end up giving back all of the interest you earn, and then some, if you trigger the default rate on your card by any number of methods, or by forgetting to pay back the balance before the 0% period ends.

I just started receiving 0% BT offers after bringing my credit scores up to the 700's. I sure don't need any problems and if this method could be risky, I wouldn't do it. Yep....I am a scaredy cat when it comes to trying new things; especially if it means I can lose by trying to "get over"!. Thanks mbhunter, sounds as if you've had experience with this or know someone who has.

[JoyJoy]

Originally Posted by twins0203

I am currently doing this. It works great once you work out getting the money in the account. Some CC issuers will deposit directly into your account, while others wont. It is a great way to make a few extra bucks if you can keep from touching the borrowed money.

twins0203, I just read a thread called "Easy Money" which was featured here in December, 2005 talking about this 0% balance transfer and investing it. I see you had valuable input then too. Interesting. Thanks!

[twins0203]

No problem at all

If you have any questions, I'll try my best to help.

I can also refer you to some of the cards I signed up w/ when I did this if that would help you any.

Also, as a way to help knock back some of the BT Fee that some CC issuers may have, or to make some additional money, sign up for you an account on cardoffers.com before you apply for any cards. Then find the card you want to apply for on their site while you are logged in and if you are approved, you will earn anywheres between $10-50 for each one.

I've already gotten one check from them and should get my next one soon. Then I'll be waiting til the first of next year to pay all these cards off and go at it again

[CJsoccerchic]

I tried looking for the "easy money" post that you said in a post - can any get a link to it?

[Bluezy]

I've considered this move to top up my 2005 IRA funding. With my new full-time work position organized and a good start on my emergent fund (now over $12K), fronting $3k into an IRA won't be a bad risk. 3K divided by 6 months @ 0% APR is $500 per month towards the balance.

If emergency funds were not available for cover, or if applying for a mortgage, I would not be considering this.

[JoyJoy]

Originally Posted by CJsoccerchic

I tried looking for the "easy money" post that you said in a post - can any get a link to it?

On the Personal Finance forum here go to the far right and where it says "Search this forum", click on it and type in "Easy Money". It should take you to BillyBob's post "Easy Money" under date of 3/15/06..

[JoyJoy]

Originally Posted by twins0203

No problem at all

If you have any questions, I'll try my best to help.

I can also refer you to some of the cards I signed up w/ when I did this if that would help you any.

Also, as a way to help knock back some of the BT Fee that some CC issuers may have, or to make some additional money, sign up for you an account on cardoffers.com before you apply for any cards. Then find the card you want to apply for on their site while you are logged in and if you are approved, you will earn anywheres between $10-50 for each one.

I've already gotten one check from them and should get my next one soon. Then I'll be waiting til the first of next year to pay all these cards off and go at it again

Thank you again Twin0203! I found an excellent website explaining all of this to me and more.....mymoneyblog.com! Wow talk about taking one step by step!

[CJsoccerchic]

Ok - I'll give it a try - thank you!!

[Tree0164]

I personally don't think that is a good idea. You are taking too much of a risk.
Most people are not disciplined enough to do that.

Credit card companies can change their terms at anytime and then you would be out of money. Getting the few extra bucks unless you are doing tens of thousands is worth it in my opinion.

[CJsoccerchic]

I was thinking about trying to build DH credit by doing this 0% transfer. Figure he has little or bad credit - get him a credit limitof whatever the bank will give - INVEST, NOT TOUCH the money (they will transfer it to a bank account, right?) then invest in CD's or high interest bank (ING, ED. HSBC) and pay off in full 2 weeks before teh 1 year is up/ That should help his credit and give us a couple hundred dollars for essentially doing nothing. Right?

[jmjj215]

Originally Posted by Tree0164

I personally don't think that is a good idea. You are taking too much of a risk.
Most people are not disciplined enough to do that.

Credit card companies can change their terms at anytime and then you would be out of money. Getting the few extra bucks unless you are doing tens of thousands is worth it in my opinion.

Interesting sentence at the end. If there's more of a reward, then it starts to look more attractive. I'd have to agree with that. If you're doing it to make an extra $100 over a year, it wouldn't be worth it to me. But $500? I might consider.. The "too much risk" idea really only comes into play when you don't have much to fall back on. I guess I'd like to see your whole financial picture (at least a general picture) before I'd feel comfortable saying "yeah, go ahead"

[dealsaver]

Originally Posted by CJsoccerchic

I was thinking about trying to build DH credit by doing this 0% transfer. Figure he has little or bad credit - get him a credit limitof whatever the bank will give - INVEST, NOT TOUCH the money (they will transfer it to a bank account, right?) then invest in CD's or high interest bank (ING, ED. HSBC) and pay off in full 2 weeks before teh 1 year is up/ That should help his credit and give us a couple hundred dollars for essentially doing nothing. Right?

I would do a little research on DH's credit before you start. Balance transfer investing has to be done while looking at the big picture. If you only have one credit card and you withdraw the maximum amount, your credit score should take a hit because your utilization is high. I try to keep my utilization on any one card below 90% and I only do that with one or two cards at a time. I've also developed my credit lines over time so that I can use $200,000 easily without going above 50% overall utilization. With rates rising, $10,000+/year in income is a modest expectation from my credit lines.

[dealsaver]

Originally Posted by Tree0164

I personally don't think that is a good idea. You are taking too much of a risk.
Most people are not disciplined enough to do that.

Credit card companies can change their terms at anytime and then you would be out of money. Getting the few extra bucks unless you are doing tens of thousands is worth it in my opinion.

Tree0164, please detail what risk you think is involved here. Certainly there is risk to your credit score if you don't proceed properly. Outside of that, what risks do you see? If a card company revoked a 0% offer for whatever reason, you would just pay the card off with the money you had deposited in a federally insured bank account.