Best way to maximize return on 0% intro APR credit card

[skives]

My wife just got a Citi custom cash credit card with a 0% intro APR FOR 15 months. The limit is $6.8k and we plan on buying a new washer and dryer with it but also use it for either gas or groceries each month since we get 5% cash back up to $500 spent in the top spend category. I want to use the intro APR to make some extra cash in T Bills. What is the best way to do this? Spend as much as we can as fast as we can or another way?

[Jluke]

Maybe I’m looking at the math differently but to max your return you need to get $6800 cash moved to t-bills right away.

I would just use HYSA.

just don’t get burned by the promo period

[Fishindude77]

Not a fan of using credit cards as a source of funds for investing.
Feels like you're looking for "easy money" playing games.

[disneysteve]

Not a fan of using credit cards as a source of funds for investing.
Feels like you're looking for "easy money" playing games.

I'm sure I've told this story again, but coincidentally we were just telling our daughter the story last night.

Years ago, Discover had an easily exploited loophole with their card. If you took a cash advance, they did not charge interest right away. They did charge a transaction fee of 3% but it maxed out at $25 so if you took an advance of more than $833, the percentage of the fee got smaller and smaller. On the first day of the billing cycle, I would take out a $10,000 cash advance and pay the $25 fee. I'd put the money in our tax-free money market account and leave it there until the bill was due 7 weeks later. I earned a lot more than $25 interest during that time. I paid the bill and then repeated the process. Eventually, Discover closed the loophole and removed the cap on the transaction fee but I made hundreds of dollars doing that.

[kork13]

I'm more along the lines of Fishindude .... Using borrowed money to invest (even merely in T-Bills) just doesn't sit well with me, and I'd recommend against it. Too easy to miss payments, get retroactive charges applied, invested assets could drop in value, and so on. If you were simply using a promo offer to make a high-dollar purchase you're already planning ("Spend $X,XXX in 3 months & get a $XXX bonus!"), that'd be fine. I'd probably even be okay with using the 0% intro rate to spread out payments on a big purchase across a few months to help your cashflow (assuming you can pay it off well before interest charges get applied). But I wouldn't borrow money from a credit card solely to turn around & put it in savings, buy T-Bills, or invest in the market. It's a slippery slope, bad precedent to set for yourself, and too easy to make costly mistakes. I know money is fungible, and doing the credit card thing can enable you to use other money in other ways ... but my debt allergy is pretty severe.

[james.hendrickson]

I'm sure I've told this story again, but coincidentally we were just telling our daughter the story last night.

Years ago, Discover had an easily exploited loophole with their card. If you took a cash advance, they did not charge interest right away. They did charge a transaction fee of 3% but it maxed out at $25 so if you took an advance of more than $833, the percentage of the fee got smaller and smaller. On the first day of the billing cycle, I would take out a $10,000 cash advance and pay the $25 fee. I'd put the money in our tax-free money market account and leave it there until the bill was due 7 weeks later. I earned a lot more than $25 interest during that time. I paid the bill and then repeated the process. Eventually, Discover closed the loophole and removed the cap on the transaction fee but I made hundreds of dollars doing that.

I love this story.

[bjl584]

I'm sure I've told this story again, but coincidentally we were just telling our daughter the story last night.

Years ago, Discover had an easily exploited loophole with their card. If you took a cash advance, they did not charge interest right away. They did charge a transaction fee of 3% but it maxed out at $25 so if you took an advance of more than $833, the percentage of the fee got smaller and smaller. On the first day of the billing cycle, I would take out a $10,000 cash advance and pay the $25 fee. I'd put the money in our tax-free money market account and leave it there until the bill was due 7 weeks later. I earned a lot more than $25 interest during that time. I paid the bill and then repeated the process. Eventually, Discover closed the loophole and removed the cap on the transaction fee but I made hundreds of dollars doing that.

This was a fairly common practice the last time interest rates on savings accounts was high (circa 2006 - 2007)
Lots of taking advantage of the cash advance policies back then.
The credit card companies caught on eventually and closed the loop holes.

[LivingAlmostLarge]

I did it back when we were trying to make payments for DH's MBA. I would write us checks to cover his tuition which part was reimbursed by his company if he got an A or B. He got a and we could pay off the CC. It was only for the balance not covered by his student loans which were $8500/year for 3 years. All in his MBA was in 9/2006-12/2009 I believe aI calculated 60 credits or about $80k. We had $25, 500 covered by student loans we paid off in 6 months after graduation. Although we may have used a balance transfer from a CC to give ourselves an extra 18 months at 3%, I can't recall. But not student loan interest or CC interest except the transfer fee.

We then had about $50k to cover and his company was covering I think 75% of total cost so $60k. So we OOP only $20k for his MBA at BU but covered with student loans and CC. It was so much work at that time keeping everything straight and slowly paying everything down. Money was super tight and we got through by the skin of our teeth.

Honestly I rarely do it now. The 3% transaction fee makes it hard to pay unless it's a 0% CC for a purchase or something. I think I did it most recently for our HVAC $15k but I had the money and was just making monthly payments.

[srblanco7]

Not a fan of using credit cards as a source of funds for investing.
Feels like you're looking for "easy money" playing games.

I agree with this sentiment. You note a $6.8k limit and plans to use a portion of that limit for various purchases. So if you dedicated $4k of the limit to advancing funds that you invest in a one year t-bill for a year, you'd make about $200. Just doesn't seem worthwhile and as others have noted, there are risks.