StockFetcher Forums · General Discussion · milking the credit card cows...<< 1 2 >>Post Follow-up
TheRumpledOne
6,358 posts
msg #47214
Ignore TheRumpledOne
9/28/2006 5:13:53 PM

Author: WhitemiataXP Number: of 237948
Subject: milking the credit card cows and loving it Date: 9/25/06 12:03 PM
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I was watching the Godfather last night and I snickered at the "I made him an offer he couldn't refuse" line as it reminded me of something that happened the day before, as I had gotten "an offer I couldn't refuse"

MBNA called me ... "you are a great customer of ours... bla bla bla ... you haven't used your card ... we want to extend a 0% on balance transfers for 8 months on your account ... we'll pay off any debt or deposit it into your checking account ... up to your credit limit"

I said thank you, politely declined then hung up.

Then I ran the numbers... and I called them back. I remembered that they kept increasing my credit limit to insane amounts that make no sense so I asked what my limit was, and how much I could transfer. The answer was $34,000 and "up to the limit"

Hum...

What's the cost? 3% of the balance transfer, or $75.00 whichever is smaller.

Hum...

So let me get this right, I can borrow $34,000 at ZERO percent for 8 months and pay $75.00 for it (plus interest at 13.99% on that 75 accruing monthly of course - that's about $87.00 total considering a minimum finance charge of $1.50 which I think is what they charge).

So I went for it.

I figure I'll have this $34,000 show up in my checking account by late this week. I'll then turn around and put the money in a 6 month AmTrustDirect CD at 5.36 APR (5.50 APY), send AmTrust a letter telling them not to renew it and after the 6 months move the money to their eMoney Market account (currently about 5.26APY) for another month and a half, then pay the credit card off directly from the MM account.

When all is said and done and I've paid Uncle Sam his share of my profits and subtracted the finance charges i'll be paying monthly, I'm looking at somewhere around $750.00 added to the coffers.

(yes, for the more astute readers out there... I will have to come up with the minimum monthly payment from a different account, but if I coudlnt' manage that [I can] I would have simply determined what amount those minimum payments would add up to, and put that portion of the loot into a MM rather than the CD)

And that's for 15 minutes of phone conversation, 5 minutes of setting up the automatic payment from my bank account (you don't want to forget to pay the CC... otherwise with these offers you're dead meat)... 10 minutes setting up the CD ... 5 minutes writing the letter to not renew the CD... 10 minutes to call and confirm they got the letter and the CD will not renew (an accidental CD renewment would spell DISASTER... where am I gonna get $34K to pay the card back?), 5 minutes to transfer the money to the MM account and 5 minutes to set up the payment of the full balance in May.

Add it all up and i'm looking at a rough 45 minutes of work. Round it up to an hour, and i'm still making $750/hr. Boy a dream come true :-)

Alessandro

P.S. any tips on other ways to milk the CC cows would be greatly appreciated.




traderblues
195 posts
msg #47229
Ignore traderblues
9/29/2006 6:48:35 AM

TRO,

Thanks for posting that. I've done similar things in the past. Credit cards can be a wonderful tool if used properly. The CC companies still make their money from the people that don't keep up their minumum payments or keep the high balance after the honeymoon period is over. The people who use the cards properly and take advantage of these offers can create some easy cash.


sboren
9 posts
msg #47273
Ignore sboren
10/2/2006 1:38:13 PM

Does that not count as a cash transaction? Credit cards use different rates for cash. I hope they didn't sucker you into a high rate! If not, then that's a good deal. I was looking into the same thing but the fine print showed that the zero percent did not apply to cash advances.


TheRumpledOne
6,358 posts
msg #47279
Ignore TheRumpledOne
10/2/2006 7:45:53 PM

Simply "pay off" a credit card "debt" on a card where you have a zero balance.

Then get them to send you a check for your balance!

THERE IS MORE THAN ONE WAY TO SKIN A CAT!!


as214
184 posts
msg #47283
Ignore as214
10/2/2006 9:39:52 PM

Not advised for improving your credit score. If you plan to buy a house, car, boat, whatever, this credit card maxing will destroy your credit rating.

One of the most detrimental things to a credit score is having a high balance in relation to credit maximum on a revolving account such as this. Example: Credit card maximum is 34k and balance owed is 34k.

On a similar note. If you plan to apply for a mortgage it is wise to completely stop using your credit cards and pay off all balances at least two months before the mortgage company runs your credit score (34k max with balance of 0). The percentage to max balance is figured into your FICO score at a rather hefty ratio.



as214
184 posts
msg #47284
Ignore as214
10/2/2006 10:16:31 PM

Here's one for ya. My friend got an offer from Discover in the mail. 0% interest on balance transfers for 6 months. Max $50 transfer fee. Continue the 0% interest until paid off, as long as you make 2 purchases per month starting in the 6th month. So he calls and asks if there's a minimum purchase amount, and verify that there is not. So he moves $18,000 from his HELOC at 10% interest, and starting in December he will make two 50-cent purchases at the gas pump every month on the Discover card. So far he hasn't been charged any interest on the transfer fee, but even if they start doing so it'll $51 dollars, increasing by one dollar per month.

They're counting on him missing a payment or forgetting to make a purchase, but they have no idea how much of tightwad he is.


nikoschopen
2,824 posts
msg #47300
Ignore nikoschopen
10/3/2006 4:29:12 PM

In the heyday of the Internet bubble era, I once knew a guy who took out $5,000 from his CC and made a killing trading in and out of tech stocks. When everything was said and done, he got out with much more than he initially bargained for. I also knew another guy who took out a home equity loan towards the end of that ga-ga days of the Internet freakfest gone haywire. Needless to say, he became a living mad cow disease. I say it's all about timing. ;-)


markcrisp
187 posts
msg #47410
Ignore markcrisp
10/11/2006 7:08:31 AM

is it really worth your effort Avery for $750?

I mean oyu can make a profit selling hot dogs at a football game...but would you do it? It's all about time and effort. I mean if you could scale this upto make $25,000+ I'd say go for it..otherwise spend your time on other ventures that will make you more money than $750..(which isn't hard)


traderblues
195 posts
msg #47412
Ignore traderblues
modified
10/11/2006 8:26:04 AM

But why not do both? How much time does it take to accept a credit card deal like that? When you start to look at ways to make money in all facets of your life, that's when the cash really starts to grow.



TheRumpledOne
6,358 posts
msg #47416
Ignore TheRumpledOne
10/11/2006 3:50:41 PM

markcrisp
10/11/2006 7:08:31 AM

is it really worth your effort Avery for $750?

I mean oyu can make a profit selling hot dogs at a football game...but would you do it? It's all about time and effort. I mean if you could scale this upto make $25,000+ I'd say go for it..otherwise spend your time on other ventures that will make you more money than $750..(which isn't hard)
...........................................................

Sometimes I just do things because I can...LOL!

I love free stuff.

The time is minimal. With auto bill pay for free from my bank, payments are not missed.

$750 is free airfare to CABO, Vallarta, Cancun, etc... so why not take the free money?





StockFetcher Forums · General Discussion · milking the credit card cows...<< 1 2 >>Post Follow-up

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