0% credit cards

[joeschmoe]

I would like to take advantage of 0% credit cards and put the money into investment vehicles, but how does one go about extracting this money?

[deadgoon]

What sort of investment vehicles are you thinking about? I know people do this, but it's a lot of work for not much return. How much is your time worth?

[safari]

I was able to transfer money from my Bank of America credit card directly into my Countrywide SavingsLink account and GMAC Money Market account. They didn't charge me any transfer fees, and the transfer qualified for the 0% rate. They did it over the phone and it only took a few days. Other cards don't let you transfer money into a checking or savings account, or even if they do, it would be considered a cash advance. So what I did was transfer money from those cards to my Bank of America card and then transfer to my savings account from there. I also heard that Citi Bank lets you request a check when you have a negative balance on your account. So for example, you can transfer money from a Discover Card to a Citi Card and then ask them to send you a check for that amount, which you can deposit anywhere.

[safari]

Originally Posted by deadgoon

What sort of investment vehicles are you thinking about? I know people do this, but it's a lot of work for not much return. How much is your time worth?

I earned over $4K by taking advantage of 0% balance transfer offers. At one point I had over $130K borrowed from different credit cards at 0%. And it wasn't much work at all. Easiest money I've ever made.

[deadgoon]

Originally Posted by safari

I earned over $4K by taking advantage of 0% balance transfer offers. At one point I had over $130K borrowed from different credit cards at 0%. And it wasn't much work at all. Easiest money I've ever made.

Details.. we want details! :-)

[safari]

Originally Posted by deadgoon

Details.. we want details! :-)

Look for credit cards that offer 0% on balance transfers for at least 6 months. Make sure there is no either transfer fee or the transfer is capped. Majority of cards have a 3% balance transfer fee with no maximum which makes it not worth it. I was able to find 3 cards that had 0%. You can use different search tools, like this one. I chose several credit cards and got approved (I have excellent credit history). The credit lines weren't that great. For example, I got approved for a $12K line with Bank of America. I had an old card with them with a $44K line, so I called them and asked them to move $43K credit line from the old card to the new card, which was easily done over the phone and the change was immediate. So now I had $55K line of credit on the new card and $1K left on the old card. During the same call I requested to transfer the entire $55K into my savings account. With American Express I didn't even have to call them to reallocate my credit lines from one card to another. They let you do it online, and you can do it as often as you like. I also requested a credit line increase for my old American Express card and got approved for a $20K increase, then reallocated that line to the new card with 0% on balance transfers, then did a transfer to my Bank of America card, and from there to my savings account. You just have to remember to pay the minimum payment every month and pay the remaining balance in full before the 0% period ends.

[joeschmoe]

If a credit card lets you transfer money directly into a savings account, then the money is extracted quite simply.

But what about cards that consider that a cash advance? How would you go about getting that money into your savings account to be used? I didn't quite understand. Do you take the money out of a credit card that lets you move money into a savings account, and then transfer the debt from that card to a 0% card?

[safari]

Originally Posted by joeschmoe

If a credit card lets you transfer money directly into a savings account, then the money is extracted quite simply.

But what about cards that consider that a cash advance? How would you go about getting that money into your savings account to be used? I didn't quite understand. Do you take the money out of a credit card that lets you move money into a savings account, and then transfer the debt from that card to a 0% card?

Pretty much, but first request to transfer a balance from the 0% card to the card that lets you transfer money to a savings account. You don't have to have a balance on that card. When you transfer money to it from the 0% card, you will end up with a negative balance. Then call them up and request a balance transfer to your savings account. This will only work if they don't charge you any fee for balance transfers. Most cards charge a 3% fee with no maximum, so be careful. An easier solution, which I haven't tried personally, is to request a balance transfer from a 0% card to any Citi Bank card that doesn't have any balance on it. Then you can request a credit balance refund through their website.

[maat55]

I would stick to a high yield savings account, that is federally insured.

[MonkeyMama]

I am with safari. I didn't take on near that much credit, but borrowed about $20k for a year.

Of course, I was able to lock in a 5.7% CD for 16 months. The CD expires when the amount is due (a few more months for me).

It was VERY little work for an easy $1k. So I wouldn't really agree it is "a lot of work for a little return." Though interest rates were much more favorable last year.

I think Safari answered your questions though - Citi makes it VERY easy.

Plus on top of that there were ThankYou rewards so I made an easy $100 in Target gift cards (opened 2 cards).

[amarowsky]

Originally Posted by safari

Look for credit cards that offer 0% on balance transfers for at least 6 months. Make sure there is no either transfer fee or the transfer is capped.
You just have to remember to pay the minimum payment every month and pay the remaining balance in full before the 0% period ends.

I don't know a whole lot about credit cards especially when you're talking about using multiple thousands of dollars on them. But i was wondering if it's 0% what kind of fee's were you being charged on those?

[safari]

Originally Posted by amarowsky

I don't know a whole lot about credit cards especially when you're talking about using multiple thousands of dollars on them. But i was wondering if it's 0% what kind of fee's were you being charged on those?

I was talking about balance transfer fees. The majority of cards have a transfer fee of 3% with no maximum, and some cards have the maximum amount capped at $75 or $99. You will get charged the transfer fee regardless of what the balance transfer APR is, even if it's 0%. It's still possible to find cards that don't charge anything for balance transfers.

[OverSaver]

Im starting my money making scheme right now...this sounds like a great idea!

[amarowsky]

My older brother is currently going to a university with some pretty hefty student loans. I kinda tossed the idea presented from this Thread to him and he was wondering if a student loan would work the same way as this. Im gonna put out a scenario, Say someone already had loans for their school taken care of, BUT they opened another Student loan for $50k, and you don't have to start paying until your "done with school" (3-6 yrs). Could u keep all of this money in a CD or bond for those years and then just snag the interest and pay back the loan in full as soon as your done with school so you wont pay any interest on the loan? My brother said the loan would be around 8% apr so i wanna konw what u folks think, and if that would work.

[amarowsky]

Originally Posted by MonkeyMama

I am with safari. I didn't take on near that much credit, but borrowed about $20k for a year.

Of course, I was able to lock in a 5.7% CD for 16 months. The CD expires when the amount is due (a few more months for me).

It was VERY little work for an easy $1k. So I wouldn't really agree it is "a lot of work for a little return." Though interest rates were much more favorable last year.

I think Safari answered your questions though - Citi makes it VERY easy.

Plus on top of that there were ThankYou rewards so I made an easy $100 in Target gift cards (opened 2 cards).

For 16 months!? how did u maintain a 0% interest for 16 months that seems like a long time for a card to have 0% interest. How did u personally deal with the monthly Minimum Payment on the card, if u have like 20-40k on a credit card wouldnt the monthly payment be pretty high?

[Tim_1983]

Originally Posted by amarowsky

I don't know a whole lot about credit cards especially when you're talking about using multiple thousands of dollars on them. But i was wondering if it's 0% what kind of fee's were you being charged on those?

There is often a balance transfer fee.

[tmvijai]

I see lot of discussion on 0% balance transfers. I get this offer all the time. I use them when I find a good deal which means 0% for 16 months with no balance transfer fee. I hate paying fee if I am just going earn interest from the money taken out. It doesn't make sense to pay a fee and then earn interest to just break even unless the interest return is more like 5% above the fee.

It is easy in many cases like CITI but Target makes it tough. They won't send your to savings account. CITI is simple and they even give your cheques especially for balance transfer offers and not cash advance cheques you can deposit to get the money put in savings. But these days no cards come with zero balance transfer. Also you should very careful in paying them back, if you miss one min. payment, your offer might be cancelled and your rates will be jacked up not just in that card. It can affect other cards too.

In the past 5years, I opened 2 Chase card and 1 CITI card with 0% balance and used them for putting down payment on my real estate. It works but should be real careful and payoff at the end of the offer. You need the planning. Without proper planning there is possibility to fail.

[tmvijai]

Originally Posted by amarowsky

My older brother is currently going to a university with some pretty hefty student loans. I kinda tossed the idea presented from this Thread to him and he was wondering if a student loan would work the same way as this. Im gonna put out a scenario, Say someone already had loans for their school taken care of, BUT they opened another Student loan for $50k, and you don't have to start paying until your "done with school" (3-6 yrs). Could u keep all of this money in a CD or bond for those years and then just snag the interest and pay back the loan in full as soon as your done with school so you wont pay any interest on the loan? My brother said the loan would be around 8% apr so i wanna konw what u folks think, and if that would work.

It is very good idea but it doesn't really worth for the 8% interst you are going to pay. If you can get more return like 10% you will still make around 2% difference which is not worth for risk you are taking. It also adds as loan in your credit report which owe for 3 years and need to be paid off as soon geting off school. WHat if things change and you couldn't payoff, it can put your credit in jeopardy. Just a word of caution.

[Alex_Adviser]

Following are some tips of using the 0% Credit Card:
1. Note the date your interest free time will come to an end. Some zero percent credit cards are being offered now for up to a full year! Be certain you can pay off any balance you have accrued before this period ends.

2. Transfer credit card balances from your cards which are not zero percent credit cards to the one which is. Even if you have to pay a small transfer fee, this could save you a lot of money. Before doing so, check that your new zero percent credit card covers balance transfers in addition to new purchases.

3. Make your payments on time. Most zero percent credit cards have a stipulation that allows them to cancel your zero interest rate if you are late on even one payment.

4. Pay off outstanding debt. Zero percent credit cards are a great way to help you save money while you attempt to become debt free while not paying high interest fees normally associated with loans you may otherwise be tempted to take out.