Latest responses to “Thinking of Getting Back Into Credit Card Arbitrage” Copyright 2012, MoneyBlueBook.com 462970 2010-02-11T15:31:37-08:00 Avi If you have over $100,000 available on your Credit Cards, contact me and I will explain the proper approach to using this so called "FREE MONEY". I also know of other liquid investments where one can place their funds without the lockup restrictions found by using CD"s. 462960 2009-09-28T13:09:25-07:00 Tom I utilized this balance transfer idea a little different. I applied $15,000 to my 5.25% mortgage using a credit card transfer offer with 0% transfer fee, 0% interest for 12 months. I continually roll the decreasing credit card balance every 12 months with a new balance transfer offer. I pay about $400 per month on the credit card balance (the required monthly payment is less but I choose to pay the $400 toward my debt free goals). I save 5.25% on the decreasing $15,000 credit card balance (first year = apx $800 savings) and in addition pay down my mortgage earlier. I refuse to do any balance transfer that requires a fee. I guess the budget would have to allow for the additional monthly payment. The problem I am seeing is that there are less and less balance transfer offers. 462930 2009-03-27T22:17:15-07:00 Doug I disagree with Bullstool, just claim your credit carding as a business and deduct the balance transfer fees. Who knows if you get audited by the I.R.S. they might disallow the deduction. Oh well you may have to pay it back. But nothing ventured nothing gained !!!!!!!!$$$$$$$$ 462920 2009-03-27T22:13:14-07:00 Doug I am the master of all balance transferring and making a ton of money at it. If you have any questions, just ask !!!!! 462950 2009-03-04T23:25:00-08:00 Bullstool Any fees are not tax deductable, and all interest earned is taxable. This is a low margin game. 462940 2008-11-12T05:41:14-08:00 and App-O-Rama is more commonly known as stoozing, pop that into google and you'll find a lot more info. 462910 2008-09-20T14:18:13-07:00 Mary Wow, this is really interesting. It took me awhile to understand the concept. I didn't think credit card companies would let you do that ! Thanks for the detailed explanation. So I am looking for a 0% balance transfer offer now to transfer from a Sears credit card a $1900 purchase I just made. So when I go to make the transfer, I can for example, tranfer $6900, which would leave me a $5000 credit on my Sears card. Then have Sears send me a check for $5000, that I then deposit into a high yield savings account. At the end of the 0% promotional period, I pay off (or balance transfer again) the $6900 (minus the required monthly payments), and I've earned x amount of dollars on the $5000. I got it, right? 462860 2008-07-09T14:57:50-07:00 dubbya Hi Raymond. This App-O-Rama game seems to have some serious pitfalls that haven't been mentioned. I'm not exactly a business expert but I don't think that the math has been well thought out. In your example above if someone has a %0 transfer balance on a $10000 account and can somehow miraculously invest it in a %5 APR savings account for 12 months, they would make $500 profit after paying back the credit card company after the promotional period is over right? But don't forget that credit card companies usually have balance transfer fees (up to 3%) and therefore your fees on a $10000 "%0 balance transfer" would be $300. So a $500 "profit" minus a $300 balance transfer fee means that someone would make only $200 on a very dangerous $10,000 gamble. I would really advise people to reconsider given the risk. In addition, I have not found any cards that have BOTH a 0% balance transfer for 12 months AND zero balance transfer fee (the only one close is ESPN card with no balance transfer fee and 6months 0% interest). Perhaps this game would work better with a high interest short term Certificate of Deposit (CD) account. Still, it would be a big gamble, kinda like Vegas odds. 462900 2008-06-19T00:20:48-07:00 Raymond Timothy, I think I see where the confusion is.... let me know if I'm not getting it right. Here's the thing about balance transfer cards...all they offer you is a temporary period to borrow interest free money for a certain period of time..usually 6-12 months. You can utilize the balance transfer funds to pay off your debts and not drown under the burden of high interest charges for the duration of your promotional period. Some people even try to make money for balance transfer by depositing the funds into a high interest savings account to earn free interest. Once your promo period ends, you may be able to apply for yet another balance transfer card and keep rolling over the balance onto yet another 0% credit card. But at the very end, while the balance transfer card has paid off all the other balances on your other cards for you, the balance transfer card itself still needs to be paid off after all the promotional periods end. If you temporarily shifted funds into a high interest account to earn some free interest, even that money must be withdrawn eventually to help pay off the balance transfer card. Of course the free interest you earned during the entire promotional rate period helps to reduce the final balance owed. In the above example, let's say you deposit the $5000 into a high interest account for 1 year for the length of the introductory rate. You've paid off your other card with funds from the balance transfer card. So now you have $5000 positive savings in your savings account and a $10000 owed liability in your $10000 credit limit 0% balance transfer card. The balance transfer card will give you breathing room to slowly pay the liability off over time, but eventually you still owe $5000 (the amount used to pay off that other old credit card you used to have. Of course, let's say your $5000 bank account earns a lot of interest and increases to $5500. Now, at the end of the promo period, you only owe $4,500 on the balance transfer card. 462890 2008-06-18T23:27:00-07:00 Timothy Raymond, thank you. I guess I am still a little confused because even if you take that extra $5,000 from the 0% APR balance transfer credit card and deposit it into a high APR savings account, you still won't have $10,000 to pay off the balance transfer card. Sorry for my ignorance. I guess it would be easier to visualize this in paper rather than in an e-mail.