Comments on: Making Money With Credit Card Arbitrage

By: Moneymonk

Moneymonk — Thu, 24 Apr 2008 21:48:33 +0000

Citi underwites HD cards

By: Pinyo

Pinyo — Tue, 22 Apr 2008 00:42:33 +0000

@Jack – May be you’re right. In any case, the Home Depot card is a Citi credit card.

By: Jack Monty

Jack Monty — Tue, 22 Apr 2008 00:36:23 +0000

I would think the Home Depot offer is not the same as normal CC balance transfer deals. It’s an in house financing deal.

Never heard of back dating interest on a bt deal.

By: Pinyo

Pinyo — Mon, 21 Apr 2008 11:39:52 +0000

@Shanti – I am not comfortable doing it either. If you aren’t, I wouldn’t recommend it.

@utkt – Online savings is an example and it was very popular amoung arbitrager because it used to pay 5-6% and very easy to move money around.

1. That is what happing recently.
2. That’s one of the risk, but usually as a result of you messing up somewhere — i.e., late payment on one of your card.
3. Apparently,not that hard. CC industry is very competitive and lucrative. They are giving them away like candy here in the U.S.

@Jerry – These guys are clever, but they’re also hurting everyone else.

@Jack – I am looking at my statement now. I have a Home Depot 0% interest no payment offer for 12 months (to pay for my new carpet). There’s a field called “accrued finance charge” with a note saying “to avoid paying accrued finance charges you must pay off your promotion balance by the expiration date shown.” If I miss paying even 1 cent on the expiration date, I could be paying hundreds of dollars in accrued finance charges.

By: Jack Monty

Jack Monty — Mon, 21 Apr 2008 05:19:07 +0000

You mention something about paying ALL the back interest if you miss a payment.

I never miss payments, but I seriously doubt if that’s true.

You’d might lose the deal and owe 1 months interest assuming you pay it all off then and there.

By: Jerry

Jerry — Fri, 18 Apr 2008 05:02:47 +0000

I had some friends in medical school who did something similar with their loans. They were on full-ride scholarship, but still took out the maximum loans available for each year of the 4 year program. (That leads to a pretty hefty sum – well over $100,000.) They then placed the loan money into a higher interest account until they graduated from medical school, at which time they were able to pay off the loans with no interest. This was because they had the insurance that it was deferred during school, and they kept the accrued interest from the account. I am not sure about the legality or ethics of this, but the thread on credit card arbitrage reminded me of it.

By: Credit Card Arbitrage, Investing, Lending Club and More!

Credit Card Arbitrage, Investing, Lending Club and More! — Wed, 16 Apr 2008 13:34:00 +0000

[...] Lately, I’ve seen people debating the merits of credit card arbitrage. Frugal Dad decided that Credit Card Arbitrage is Not Worth the Risk and Moolanomy asks Credit Card Arbitrage, Is It Worth It? [...]

By: utkt

utkt — Tue, 15 Apr 2008 21:08:55 +0000

Interesting, I’ve never considered credit card arbitrage before, but granted, I’m a poor student so I doubt I’d be able to borrow anything about £2000.

Having said that, I believe that if you manage to get $100,000 out, perhaps your best strategy is to NOT stick it into an online savings account, surely there are other accounts that pay a higher return on average? Fixed deposits, ISAs, etc.

However, for the sake of argument, I think there are a few things that one has to consider when making this sort of investment.

1. Will the Feds lower the interest rate and effectively reducing the amount of money you earn as a result?
2. What if the credit card company inadvertently change their policy?
3. Given the current economy and credit crunch, even for consumers, how easy will it be to obtain finance?

By: Shanti @ Antishay Ventenne

Shanti @ Antishay Ventenne — Mon, 14 Apr 2008 15:51:32 +0000

This is really interesting. I’ve never even heard of it, but going into debt to invest just sounds… risky, to say the least. Maybe I’ll try it out with $50 and see how it goes LOL – it would make a very interesting addition to my blog challenges so far.

By: My Dollar Plan

My Dollar Plan — Mon, 14 Apr 2008 02:57:21 +0000

@ Dough Roller: Last year our balances averaged about $225,000. We were able to generate $12,000 since interest rates were much higher than they are now (especially with the 6% offer from FNBO).

We keep our utilization to about 20% so that our scores aren’t affected much. We dropped it to about $170,000 now so that we can refinance our house, but we’ll ramp it back up as soon as the documents are signed.

@ Pinyo: Hmmm… never thought of being an arbitrage coach… I like it!