Mmm, 0% APR balance transfer for 15 months...

[ibneko]

Citibank's offering me a 0% APR credit card for 15 months (12 if I don't actually use the card for at least $100 in the first three months). I'm tempted to do the Balance transfer trick - essentially requesting a large, $10,000 balance transfer, snagging the difference and storing that into my HSBC saving account, earning me 5.05% interest => A total of $591.61 in 14 months (presuming it takes some time to actually get the month).

Except there's an irritating 3% transaction fee for the balance transfer. Which means I only put in $9,700. At the end of 14 months, according to INGdirect's tool I'll have $10,273.87. A $273.87 after I pay off the $10,000. Potentially a tiny bit less since I have to pay the monthly minimum... About $250 earned total? Poop.

Mmm, chevy chase may be better. :) Same 15 months, but a $75 max Balance Transfer charge. Ooh, hm, it's 0% APR on both purchases and balance transfers... Hmmm. Yes, much better. It should net me around $512.18? A bit less, again, due to the minimum monthly payments.

Now to figure out which credit card I should transfer it to...

Oh, yeah. I did post about this previously. If you missed the post, here's a step-by-step post by someone else that shows what I'm planning on doing: http://www.mymoneyblog.com/how-to-make-money-from-0-apr-balance-transfers/

(In short, request a balance transfer from a new card - it's like a loan, but with 0% interest for a set amount of time. The balance transfer is applied to a card, or you get a check. Move the money to some high interest savings account* and let it accrue interest. When the 0% set amount of time ends, pay off the card and rejoice in the interest you have earned without spending a dollar. Supposedly.)

*we recommend INGDirect or HSBCDirect, both online banks. INGDirect has quite possibly the best banking/financial website I've had the pleasure of using... but I digress. If you want to open an account at the former, tell me, and I'll refer you. You'll earn a bonus as will I~

Comments

[ibneko.livejournal.com]

Personally, I think that's more risky, since if you mess up there and you can't pay it all off, you'd be quite screwed, whereas in the case of using it to earn more money, you're setting the borrowed money aside, so paying off the card in an emergancy should be as simple as paying off a normal credit card...? I dunno... not entirely sure. But yes, 40K is a bit much to randomly borrow with the risk of it all suddenly turning into a 20-30% APR loan...