Asking for advice

[Ima saver]

One of my credit card companies has offered me a check to do anything I want to with. I can write the check up to $7500 and pay less than 1% interest for the next 6 months.
I can take that money, put it in my money market and earn 5.25% interest. This will net me about $120-130 dollars and then I will just pay it off before the interest rate goes up to 4.99%. I will only write the check for $7000. I realize this might lower my credit score, but my score is 817 now.
Should I do this??

[Broken Arrow]

I Would!

In fact, I wish they would give me a deal like that.

[poundwise]

Make sure there is not a fee for doing so. Some credit card issuers will offer low interest on such things but charge a substantial fee when you write that check.

[dossin1]

Ditto on the fee. I got a check w/0% interest I was going to use for dd's tuition, but then I read there would be a $75 fee. I would pay only $37 in interest at my regular rate, b/c I was going to use inc tax refund to pay off balance in Febuary.

[PRICEPLUS]

Read the small print! THe devil is always in the details!

[disneysteve]

I agree with the others. Check the fine print. If the fee is not bad and you would earn enough interest to make it worthwhile, do it.

Also, pay attention to your credit limit. If the $7,000 would be more than 30-40% of your limit, I wouldn't do it for that much.

I actually used to do this all the time with one card I had. They used to charge a very minimal fee for the convenience checks. On the first day of my billing cycle, I'd deposit a check for $10,000 into my money market. 55 days later, when the bill was due, I'd write a check to pay it. I made hundreds of dollars in interest over a couple of years, until they changed their policy.

[kimiko]

I always thought this method is extremely risky and that there're always some catch to prevent the consumer from making money off credit card company. Glad to know it does work.

[Hot dog]

I have thought about doing the same but I am not good at figuring out all the interest stuff. It usually costs like 65-75 for 0% for six months How do I figure out how much I would make in 6 months on $5,000 would it be worth the $65-75$????

[kimiko]

Assuming a 5% annual return for a CD for example. You multiply that $5,000 by 5% = total interest for the whole year. Then divide that by 2 to get the 6 months interest.

[Hot dog]

That is too easy Why haven't I figure that one out Thanks!!!!

[kimiko]

it's not for daily compounded interest, but a close enough approximation

[vsjhoc]

Originally Posted by Hot dog

I have thought about doing the same but I am not good at figuring out all the interest stuff. It usually costs like 65-75 for 0% for six months How do I figure out how much I would make in 6 months on $5,000 would it be worth the $65-75$????

Could you tell me where you got the amount of $65-$75? Usually it's a percentage of the amount of the cash advance. Often it's 3%, so the fee would be $150 unless it's capped at a certain amount.

[vishenda]

I wouldn't do it. What's the total upside to you? $150 max! (The interest you'd earn on $7,000 minus the interest you'd pay, for 6 months.)

The downside is -- something could come up and you could not repay all of the $7,000; you'd be tempted to keep that money; etc.

Plus you have to remember to pay it off in time.

Seems like a lot of work to me for what amounts to a mere $25 per month max profit.

If your credit score is that high, then surely you are not that hard up for an extra $25/month!

My recommendation: don't bother!
ayeeh!

[vsjhoc]

Originally Posted by vishenda

If your credit score is that high, then surely you are not that hard up for an extra $25/month!

Credit score is not based on income. You can have a high score and a low income. I've got a score even higher than Ima's, but $25/month sounds good to me.

[Ima saver]

I have decided not to do it. I did read that there was a fee, a max. of $75. I would still make some money, about 75 dollars, but using that much of the card's total, would lower my credit score. I am not worrying about not being able to pay it off on time, I have plenty of money. I was just trying to make some more for free. I know lots of people on here do this all the time, but they need to offer me a higher limit to make it worth the time.

[vishenda]

Seems like a lot of effort for $120 - $130 before taxes

[vishenda]

cool, even with the low interest rate they claim, they will likely hit you with all kinds of other service fees that will nullify the 130 net gain. If you really want to do something like this, get a regular bank loan

[Hot dog]

I think it is a chase visa but it had a cap of $65- $75

[greedy4chips]

I would do it in a heartbeat if there wasn't any fees or gotchas in the fine print. Free money for a few minutes of planning and effort is still free money.

This forum is built on how to cut expenses by any amount possible to help repay debt. Once you accomplish that the only other thing you can do is to raise your income by any means possible. I donate plasma for extra money. I float money on 0% CCs to make interest on CDs. We recycle aluminum cans. I tutor at school 5 hrs per week.

People cut their cable, water, electric, food, etc just to save $25 per month. Find 10 ways to make $25/month and now you have $250 or a one night stay at a super waterpark in Wisconsin Dells to splurge once per month or whatever trips your trigger.

I have a poker advertising website that pays me very well and that is based on earning penny or three per hand of poker. It seems insignificant until you see people playing 1000's of hands per month.

It all adds up!

[lrjohnson]

Originally Posted by greedy4chips

People cut their cable, water, electric, food, etc just to save $25 per month.

Man, I apologize for going off topic, but I sure wish more people did that!! It does add up, and it's real money, and not enough people do it!