My Personal Finance Journey

Personal finance observation, musing and decisions in a journey toward financial independence by 2020 with at least $3 million.


By Topics

Overall:
0. About (10)
1. My Progress (139)
2. Car & Home (107)
3. Credit (138)
4. Banking (33)
5. Saving (49)
6. Investing (308)
7. Taxes (89)
8. Spending (74)
9. Misc (97)
A. Archive (49)



MONTHLY ARCHIVE

Feb 2014 (3)
Jan 2014 (6)
Jan 2012 (1)
Apr 2011 (1)
Mar 2011 (1)
Feb 2011 (1)
Jan 2011 (1)
Dec 2010 (1)
Oct 2010 (1)
Sep 2010 (1)
Aug 2010 (1)
Jul 2010 (1)
Jun 2010 (1)
May 2010 (1)
Apr 2010 (1)
Mar 2010 (6)
Feb 2010 (2)
Jan 2010 (7)
Dec 2009 (3)
Feb 2009 (4)
Jan 2009 (8)
Dec 2008 (1)
Jun 2008 (2)
May 2008 (2)
Apr 2008 (5)
Feb 2008 (3)
Jan 2008 (15)
Dec 2007 (32)
Nov 2007 (6)
Oct 2007 (8)
Sep 2007 (9)
Aug 2007 (24)
Jul 2007 (2)
Jun 2007 (1)
May 2007 (3)
Apr 2007 (4)
Mar 2007 (4)
Feb 2007 (13)
Jan 2007 (6)
Dec 2006 (3)
Nov 2006 (7)
Oct 2006 (7)
Sep 2006 (6)
Aug 2006 (4)
Jul 2006 (10)
Jun 2006 (1)
May 2006 (3)
Apr 2006 (2)
Mar 2006 (6)
Feb 2006 (6)
Jan 2006 (3)
Dec 2005 (1)
Nov 2005 (9)
Oct 2005 (8)
Sep 2005 (13)
Aug 2005 (25)
Jul 2005 (16)
Jun 2005 (17)
May 2005 (19)
Apr 2005 (20)
Mar 2005 (24)
Feb 2005 (23)
Jan 2005 (36)
Dec 2004 (40)
Nov 2004 (34)
Oct 2004 (17)
Sep 2004 (21)
Aug 2004 (59)
Jul 2004 (37)
Jun 2004 (31)
May 2004 (29)
Apr 2004 (52)
Mar 2004 (49)
Feb 2004 (49)
Jan 2004 (31)
Dec 2003 (48)
Nov 2003 (52)
Oct 2003 (29)
Sep 2003 (8)
Aug 2003 (5)
Jul 2003 (2)
Jun 2003 (2)
May 2003 (5)
Apr 2003 (2)
Mar 2003 (2)
Feb 2003 (3)
Jan 2003 (29)



 

0% APR Introductory Credit Card Offers Still Exist

Contributed by mm | August 8, 2007 1:05 AM PST

WSJ columnist Jane J. Kim reviewed the trick of profiting from introductory credit card offers and declared that there are still enough opportunities for those we are willing to take a temporary hit on credit score for a couple of extra grands a year:

"The increasingly popular strategy involves applying for a slew of credit cards that charge 0% interest on balance transfers, then parking those borrowed funds in high-yield online savings accounts, which often pay 5% or more.

Then, just before the cards' introductory period expires, typically in 12 months, you pay off the loans and pocket the interest earned.

...

Competition among card issuers for new customers is so intense that companies can't afford to do away with the generous offers altogether. American Express Co., Citibank, J.P. Morgan Chase & Co. and Bank of America, for example, say they still offer no-fee, 0% balance transfers to selected customers."

I myself am a loyal practioner of the practice, and in the past 12 months alone, I maintained an average credit card balance of over $40,000 in 0% APR or low-APR balance transfer offers. That's probably the easiest $2,000 I pocketed last year.

In case you don't know where to find these offers, below are some cards you can look at. They all include introductory 0% APR balance transfer offers for 12 months or longer with credit card annual fee. I included those with capped balance transfer transaction fees since with a larger balance transfer, arbitrage profit can still be obtained under capped fee arrangements.

Chase

Chase Platinum Visa®
0% APR for 12 months for purchase and balance transfer; 3% transaction fee capped at $75 (PFBlog Review)

Chase Platinum MasterCard®
0% APR for 12 months for purchase and balance transfer; 3% transaction fee capped at $75 (PFBlog Review)

Disney Rewards® Visa® Card
0% APR for 12 months for purchase and balance transfer; 3% transaction fee capped at $50; various Disney benefits and rewards (PFBlog Review)

Citibank

Citi® Driver's Edge® Platinum Select® Card
0% APR for 12 months for purchase and balance transfer; no transaction fee; additional rebates up to 6% (PFBlog Review)

Citi® Platinum Select® Card
0% APR for up to 12 months for purchase and balance transfer; no transaction fee (PFBlog Review)

Discover

Discover® Open Road Card
0% APR for 12 months for purchase and balance transfer; 3% transaction fee capped at $75; 5% rebate on gas and auto maintenance purchases. (PFBlog Review)

Miles by Discover® Card
% APR for 12 months for purchase and balance transfer; 3% transaction fee capped at $75; reward in miles plus 12,000 bonus miles with monthly purchase. (PFBlog Review)


I couldn't find any American Express offers that match the above criteria. Did I miss out any other similarly attractive offers?

More PFBlog Articles You Might Find Interesting ...


This Post Has Received 10 Comments. Share Your Opinions Too.


Tyler Commented on August 8, 2007

I've done this for some time and have benefited greatly. I take the interest I earn each month (almost $500) and put it towards my mortgage principle.


Mike Commented on August 8, 2007

How do you get the cash though? For instance, all of these cards have 0% balance transfers, but charge interest (I assume) + a transaction fee on cash withdrawals.


Nabloid.com Commented on August 8, 2007

Are there a lot of 0% opportunities like this for Canadians?


JohnDiddler Commented on August 8, 2007

USBank made me one last week. 15 months but yearly fee if no use. trickier and trickier.


MM Commented on August 8, 2007

Mike, usually I balance transfer to my credit union's credit card, and my credit union allows me to transfer any credit balance to my checking account without charge.


igotmumps Commented on August 10, 2007

Nabloid

I don't think there are any 0% APR offers for Canadians. The best I've seen is 1.9% from MBNA Canada. There is a 1% balance transfer fee, so on a $10,000 transfer you are having to pay a $100 fee. Investing in a high yield savings account makes it too hard to make any money, but if you can accept a little more risk, using the money to invest in something like a unit trust (which generates a > 10% yield) will allow a greater return. The interest paid can also generate a tax credit as the money is used for investment purposes. I am not an expert, so be sure to check with a financial adviser or accountant on the specifics.


EB Commented on August 11, 2007

Tyler - Can you (or someone else) please elaborate on how you do this?


Anon Commented on August 16, 2007

Yes, with $40,000 you can come out making decent money. But it is probably not going to be the whole $2,000 though. A couple things:
1.) You need to pay tax.
2.) You might have to pay that balance transfer fee (unless you are really lucky!).
3.) You probably didn't have the $40,000 earning interest for the entire 12 months. =)

Assume that you are with the 28% tax bracket, no balance transfer fee, have money earning for 11 months, and interest APY of 5.05% (Emigrant Direct), your total earning will probably be a little over $1300. Nothing to be taken lightly nonetheless!

For the calculation, I used the calculator found in
http://www.moneyeconomics.com/articleInterestArbitrageCalculator.php


ASAP Credit Card Commented on October 11, 2007

Luckily, the number of 0% APR credit cards doesn't seem to be decreasing-- even with credit worries and problems in the subprime lending market. But take advantage now... because if problems continue to persist, you might see these offers slowly start disappearing...


Smart Balance Transfers Commented on October 30, 2007

Amex hasn't gotten into the 0% balance transfer game. They offer a lot of long term fixed APR deals. One thing that has happened recently with 0% APR balance transfer deals is that a lot of banks have upped the maximum balance transfer fee from $75 to $250 or even no limit. The list you put above is pretty good, though. None of those offers charge more than $75 on balance transfers.



Read More ... 140 Posts In The Same Category










This page was last rebuilt at January 27, 2014 07:35 AM PST.
 

RSS FEED





PERSONAL FINANCE BLOGS I READ

Consumerism Commentary
Get Rich Slowly
My Money Blog
All Financial Matters
The Simple Dollar






.

Error 500 - Internal server error

Error 500 - Internal server error

An internal server error has occured!
Please try again later.



Copyright 2003-2014, PFBlog.com. All Rights Reserved. (Privacy Policy)