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May 18, 2007


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Additionally, it can ding your credit rating if you over utilize your lines of credit.

I think it is important to focus on debt reduction at the same time focus on income generation. Just like the secret says, focus on the debt... it expands. Focus on income... it expands. In my experience, this is very true.

On top of the time and effort, there is also a certain amount of risks involved with this scheme. If things ever not go the way you thought it should, even with a screw up from the bank or credit card company, you have no one to blame but yourself. It's the risk you were taking when you sign up for this scheme.

Of course opening too many credit card accounts will also hurt your credit score. How much is *THAT* worth?

Why not spend this time and effort on educating yourself? It probably pays off more in the long run.

I don't think it's worth it.


1) Earning potential is limited, yes, but an extra $1500 per year is a nice bonus (I will earn ~$1500 pre tax this year on roughly $29,500 borrowed for 12 months, for free, sitting in my savings account at 5.3%). It brings me $1500 closer to meeting my "side-income" goal for the year of $5000.

2) You exaggerate the time and effort it takes to spot and set up these deals. I can easily digest the Terms and Conditions, a 1-2 page document, in less than 5 minutes, and know exactly what I am getting (or, in the case of a bad deal, *not* getting). You just have to read the thing and understand it. Most card companies have automatic billpay, so after it is set up online (maybe 1 hour), I don't need to worry about the account again until the 0% introductory period is over and I pay back the entire balance. The way I figure, I am earning roughly $1500 for at most 3 hours of actual work. Better than my day job.

3) The ding to my credit score is short-lived and small. I wouldn't advise somebody who is on the verge of buying a house to do this. In the same way, I wouldn't advise somebody careless with money or irresponsible to do this, either, as any debt is a liability and must be handled carefully.

In principle I agree with staying out of debt. But "free" debt like this, if handled carefully, can contribute to your bottom line net worth.

You can get free cash advances off credit cards?

Dy: most of the time, no. You can't get free cash advances off credit cards. But many cards offer free balance transfers. So the trick is to balance transfer to another card that has no balance, giving that card a negative balance (credit). You can then request a check from this card.

There are instructions all over the Internet to do this. But this isn't for everybody. You have to know what you're doing, and you can't mess up, or you'll owe the credit card company hundreds of dollars, rather than earning hundreds of dollars.

I have to disagree somewhat with points #1 & #2, but I definitely see this as a personal preference thing - some people aren't going to like it and others don't see the big deal.

I am actually venturing into balance transfer territory myself. Plan to make $1k in a year by applying for a card and transferring some balances. To me the time seems very minimal. $1k is a lot of money to me. I guess I Feel opposite of you on #1 & #2. #4 - I agree - I do that too - which means I will make a grand total of $1500 from my cards this year. I think I like the opportunity to triple my usual return. Oh but I'll set up automatic payments, don't expect it to take much time, certainly less time than a job that would pay me $1k.

It most certainly has its risks, but anything to make a quick buck does. I take offense though to the idea that you have to be uneducated or in debt to take such a risk. Quite the contrary. Turning a back on such an opportunity just because of an emotional adversion to debt is not the smartest financial decision. In this case I will give you all a little more leeway because it is a credit card and there are many risks. I wouldn't trust them farther than I could throw them - all your points are well taken. But someone came up to you with a 0% offer and no strings attached, it wouldn't be wise financially to say no. I personally would consider that more uneducated.

I am very careful with my credit score, not too worried about it. In the long-run it actually helps since we take on so little debt to base a score on otherwise. But no 2 people's credit score situation is the same. We have excellent scores and monitor closely. If the outstanding balances hurt our score we would just pay back the card immediately and our score would jump back up, it's not a biggie. I Wouldn't open 20 cards and keep doing this forever, but we decided for 1 years we'd give it a try, and go from there. When we're done we close the cards, with the score in the 800s after closing many cards I Am not too concerned. The assumption that anyone taking a BT has a bad credit score is absurd though. The second it hurt our FICO score it wouldn't be worth it though - that I Would agree with. But having a good score allows you a lot more wiggle room and room for error all the same and that I don't mind experimenting with.

I'd have to agree with some of the others here that if planned out properly it could be a great way to make a little extra cash. The best way is probably to make things as automatic as possible. Write down on your calendar or if you use Outlook set a reminder for when the 0% APR is about to expire. Sign up for automatic payments that way you don't have to worry about it and use an online bank with high interest like ING or HSBC with 5-6% on new accounts. I'd also think it's a good idea not to max out the line of credit, maybe $20k out of $25 or something so it doesn't affect your credit score as much? I'm guessing on this part but everything else seems to make sense and not be that hard to do if you're up for it.

Does anyone know where to find these kinds of offers? Maybe I'll do some searching online but if anyone has a particular site or card to look into let me know.

I for one have over $200K in balance transfers and cash advances (yes, many deals allow you to have the money deposited directly into your account, or to write a check). I'm netting over 4%. If you're going to do this, you must chase interest rates (I move the money every few months as on-line promotional bank rates expire), you must set autopayments (because if you miss a payment, it is very bad), and you should be careful that you don't accidentally take an advance from a card that has an uncapped fee--if they take 3% off the top, it is hard to make money.

I posted this on the original post, and then I found this one that would actually be a little more appropriate so here it is again.

As MJ said, I think balance transfers are the best way to make a profit with credit cards.

I ended up having about $150,000 in available credit that I was able to transfer interest free for a year. After that I just stuck it in a high interest bank and cleared about $7500 last year.

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