How I Made an Easy $1,800 Profit with My Credit Cards
by
Scott Bilker |
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Hi
Scott,
I recently heard you on NPR radio
90.9 FM WBUR from Boston.
I was interested in how you
borrowed from your credit card at a low interest rate and then
invested it in a CD and earned about $1,800.
Which of your books covers that
interesting topic? I'd like to know more!
Thanks,
Leo
Leo,
Thanks for listening! This is always
a topic of interest by hosts and listeners. That is, making money
using credit cards.
People are always looking to make
something from nothing, and that may be possible in this case.
However, for most, the way to gain, bigtime, is to use similar techniques to save
money on existing debts.
Actually, I didn't put the money into
a CD; it was a money market account. Also, most of the details of
how to get these low-rate deals, and manage them successfully, are
contained in all of my best-selling books, Credit
Card and Debt Management,
How to be more Credit Card and DebtSmart, and Talk Your
Way Out of Credit Card Debt.
First off, I want to be clear that
I'm not recommending that you do this; game the system to
make a profit. I present it here for your
pure entertainment. "Kids, don't try this at home." I don't
want to hear that someone cash advanced money and got into more debt.
Because you do get into more debt. Okay, so now that I'm disclaimed and
all (I hope), here goes.
My original intent was to experiment
with what
would happen to my credit score if I suddenly added $62,000 to my
debt load. Also, I wanted to test a zero-percent transfer offer to
see if there were any catches and/or extra charges.
 I took advantage of four
zero-percent
offers totaling $62,000 and put that money in an ING Direct Money
Market. These offers were good for one year; the rate ING was
paying at that time was around 3 percent. I held the money there for
one year and paid it back to all cards when the offers expired.
The total interest earned from that
experiment was $1,800! For the first time in my life, I was actually
profiting from using my credit cards. It was like a refund for all
past interest charges sucked out of my personal economy for the last
15+ years!
I also learned a few things that I
will discuss briefly:
| 1) |
There
are a few tricks in credit offers. One of these cash advance
offers tried to charge me an overlimit fee, which they quickly
removed. You can read the details about this in my article, Chase
Bank Tries to Pull a Fast One. |
| 2) |
My
credit score dropped from 736 to 728. Again, I must stress
that this is what happened to me, and you may not get the same
results. Right now my credit score is 819. And, I'm trying to
get to the absolute top of 850. Not bad for a guy with 50+ credit cards. |
| 3) |
I was
able to make money with this strategy. Of course, there is
work involved, e.g., tracking the credit card deals, paying on
time, writing checks, etc. |
| 4) |
The
minimum payment on one of those offers was $15 on a $9,000
balance. That's the lowest minimum payment I've ever seen. The
reason is because they want my balance to be as big as
possible when the rate changes. |
| 5) |
When I
paid these banks off at the end of the year, I received a call
the next day with more offers to extend the 0 percent rate. I
took them and made even more money! |
Managing these low rate offers is the
key to making the strategy work. In my first book, Credit Card
and Debt Management, I go through the details of evaluating
every offer as well as the math needed to calculate the real cost of
the offer. In my latest book, Talk Your Way Out of Credit Card
Debt, I discuss the details of how to negotiate low-rate deals
with the bank, thereby giving you the cash you need at the rates that
save you money. And, in the case of this example, make you money as
well.
The best place to find low rates is
from your current cards. However, it may be necessary for you to get
new lines of credit to reduce your current debt and make money. You may be
able to find low rate deals from my recommended
list of credit cards.
Please remember to use caution if you
try to make money with the method I discussed here. You don't want
to end up paying the banks! Be sure to take a look at my books
before getting started.
Hope that helps!
Regards,
Scott
PS: I do have a special on all three of my books:
receive all three when you get my latest book. Check
it out here!
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