And you learned all about merging and consolodating credit cards to get CLIs.
Credit Limit Increases (CLI): Post Your strategies <a target="_new" href="http://www.fatwallet.com/forums/messageview.php?catid=52&threadid=238073&highlight_key=y&keyword1=large">The large credit lines thread: where and how did FWers get their unsecured credit lines > $25,000? Updated 12/05 </a> Credit Card Issuer FAQ
And I'm throwing this one in just because I like the idea.
Because of the worry about missing a payment and getting rate jacked, your AOR money needs to say liquid and FDIC insured. And to maximize your return you know about Rate Chasing and how to miniumize your interest loss when moving money.
Okay then, so geeze, what is the point of this thread? Oh yeah, where to put your AOR money to maximize return. See quick summary.
Users like you can add images, links and other relevant information about this topic.
posted: Feb. 28, 2006 @ 1:16p
turp81
New Member
posted: Feb. 28, 2006 @ 1:27p
Anyone put their AOR money into a ROTH IRA and buy CDs? The interest would be tax deferred and you can pull out your contributions at anytime without penalty. I'm looking at 1 year 4.8% CDs through my ROTH. Thoughts?
mbaker4096
Senior Member - 1K
posted: Feb. 28, 2006 @ 1:35p
Good collections of initial links. Almost an AOR FAQ, if we were to consolidate the best info from each thread.
Also, might want to include the Adverse Actions thread in the negative consequences section. That's really the best collection of bad stuff (tm) that happens that we've amassed to date.
Re: where I put my AOR funds, I've had $100K in Everbank checking enjoying the 5.01% APY promo rate for the first 3-months and was planning on moving it over the AmboyDirect (to get their 5.00% APR for the first three months) when the World Savings Liquid CD came along. I wrote a check for all but $1500 (min. balance at Everbank) to World Savings and will close the Everbank account after the initial 3 months is over on March 7th.
Another $70K of funds are sitting in my HSBC OnlineSavings account earning 4.8%. I chose them over ING because of the better promo rate for longer period and ease of ACH/EFT linkage.
And another $25K of funds are sitting in Superior Savings earning 4.5% in the Superior Money Market account. I kept this around in order to have a place to bring funds back to after the various promos ended, but at some point I'm going to cut bait and run...doesn't look like rates will be falling back to 4.5% anytime soon.
Other accounts I use regularly are my Presidential Checking -- at 4.25% for checking, it can't be beat -- and my CapitalOne Savings -- I've had it for ages and have linked it to every account in my portfolio...used to use it to transfer funds back and forth, but it's not getting the same traffic since my HSBC account linked up easily to everything else out there as well (and doesn't have the same 7 day hold on transferred funds).
turp81 said: Anyone put their AOR money into a ROTH IRA and buy CDs? The interest would be tax deferred and you can pull out your contributions at anytime without penalty. I'm looking at 1 year 4.8% CDs through my ROTH. Thoughts?
The only problems I see are the $4K limit, but more importantly, the opportunity cost of not using your tax advantaged contribution for long term growth. You lose the opportunity to invest $4K with tax free gains for the long term in order to get about $185 tax free earnings for the year.
mbaker4096
Senior Member - 1K
posted: Feb. 28, 2006 @ 1:41p
turp81 said: Anyone put their AOR money into a ROTH IRA and buy CDs? The interest would be tax deferred and you can pull out your contributions at anytime without penalty. I'm looking at 1 year 4.8% CDs through my ROTH. Thoughts?I do fund my Roth and other I-Bonds purchases from AOR funds, but always with the intent of paying back the "borrowed" funds with new earnings prior to expiration of the promotional rate on the BTs.
This is a poor choice of the use of a Roth if you intend on withdrawing it at the end of the 12 month promo period. $4K limitation means it's of limited value for the serious AOR investor. Put funds in there you don't intend to withdraw.
hokie94
Member
posted: Feb. 28, 2006 @ 1:44p
I would say open an Everbank account on 4/15 so that the account will be setup by 4/30 and mover you money there (it takes about 2-3 weeks to set up the account). Currently 5.01% checking for new customers for 3 months. On or about July 30, tell them you're not satisfied and get paid $50 to leave.
As with all of these deals, do your own due diligence.
xpguy
Senior Member - 3K
posted: Feb. 28, 2006 @ 1:50p
mhesidence said: And thought cool, I need to try that. And you know about the negative consequences that go with an AOR.
I put my AOR money into various gambling sites and the rest i spend on lottery tickets. Its BULLETPROOF
mbaker4096
Senior Member - 1K
posted: Feb. 28, 2006 @ 3:48p
EugeneV said: From what I understand, APR, not APY is 5.0% at AmboyDirect for the first three months, making it the best AOR target.But you receive a $50 cancellation bonus at Everbank...what's that worth?
SweetCash
Senior Member
posted: Feb. 28, 2006 @ 4:18p
The negative consequences section should also tell if any of the institutions with suggested accounts to put your money into initiate a hard inquiry when you open an account with them.
mbaker4096 said: Also, might want to include the Adverse Actions thread in the negative consequences section. That's really the best collection of bad stuff (tm) that happens that we've amassed to date.
Thanks, I knew there was more just couldn't find the thread. Added it.
Also added CLI threads and several of the banks offering 5% for 3 months.
mbaker4096
Senior Member - 1K
posted: Mar. 1, 2006 @ 12:56a
Maybe a comment regarding one of the account aggregators to keep track of everything might be in order?
My preference is HSBC EasyView (better display of important info), but Yodlee.com is always available without needing a checking account at HSBC.
CoffeeEater said: I'm doing the GMAC 5.05% 1 year CD. 7yr CD with PenFed at 6% APY for me. Penfed only takes out 2 months' interest in case you pull out early.
xerty
Senior Member - 2K
posted: Mar. 1, 2006 @ 3:03a
alpinewhite said: 7yr CD with PenFed at 6% APY for me. Penfed only takes out 2 months' interest in case you pull out early. Are you sure about that? The application form states you lose the most recent 365 days of interest on a 7 year CD, barring exceptions like death, retirement, etc. See the 2nd page under "early withdrawal penalties." For 1-5 year CDs it's 1/2 year of interest.
mhesidence
Dismembered Member
posted: Mar. 1, 2006 @ 8:28a
alpinewhite said: CoffeeEater said: I'm doing the GMAC 5.05% 1 year CD. 7yr CD with PenFed at 6% APY for me. Penfed only takes out 2 months' interest in case you pull out early.
Assuming this is true, most BT only last 12 months. So you'll only get 10 months intrest at 6% or 6 * 10/12 = 5. No real benifit unless you can go longer than 12 months. Given the rising rates you might be able to beat 5% in a few months.
So the effective yield is only 5% for most BT deals, plus you can't use the money to pay back the (typical) %2% monthly minimum payments.
notlarry
Member
posted: Mar. 1, 2006 @ 8:35a
turp81 said: Anyone put their AOR money into a ROTH IRA and buy CDs? The interest would be tax deferred and you can pull out your contributions at anytime without penalty. I'm looking at 1 year 4.8% CDs through my ROTH. Thoughts?In a Roth, the interest would be tax free, not tax deferred.
SweetCash
Senior Member
posted: Mar. 1, 2006 @ 11:47a
Amboy Direct is 4.33% after the first 3 months, as opposed to 4% in the quick summary.
mhesidence
Dismembered Member
posted: Mar. 1, 2006 @ 12:21p
SweetCash said: Amboy Direct is 4.33% after the first 3 months, as opposed to 4% in the quick summary.
Just copied the title of the thread linked. Fixed it in quick summary.
EugeneV
Ancient Member
posted: Mar. 1, 2006 @ 1:41p
mbaker4096 said: EugeneV said: From what I understand, APR, not APY is 5.0% at AmboyDirect for the first three months, making it the best AOR target.But you receive a $50 cancellation bonus at Everbank...what's that worth?
Amboy's into APR is on the first 100K only. So, 0.12% difference is $120. And then you can get another $50 for each savings account referral.
xerty said: alpinewhite said: 7yr CD with PenFed at 6% APY for me. Penfed only takes out 2 months' interest in case you pull out early. Are you sure about that? The application form states you lose the most recent 365 days of interest on a 7 year CD, barring exceptions like death, retirement, etc. See the 2nd page under "early withdrawal penalties." For 1-5 year CDs it's 1/2 year of interest. My bad. For 7-yr CDs, it's last 365 days if more than 365 days into the CD. I must've been thinking about the 6-month CD where prior 90 days' of interest is what's forfeited if you've been it >90 days.
mbaker4096
Senior Member - 1K
posted: Mar. 1, 2006 @ 11:12p
EugeneV said: mbaker4096 said: EugeneV said: From what I understand, APR, not APY is 5.0% at AmboyDirect for the first three months, making it the best AOR target.But you receive a $50 cancellation bonus at Everbank...what's that worth? Amboy's into APR is on the first 100K only. So, 0.12% difference is $120. And then you can get another $50 for each savings account referral.Didn't know about the Amboy referral bonus...thanks for that.
Your calculation's a little off on the other figure. 0.12% of $100K for 3 months is only $30.
It's six of one, half dozen of the other. I wasn't aware of the AmboyDirect account when I signed up for the Everbank bonus. I'm sure I'll open an account there at some point in time.
Maybe after the World Savings 5-month 5.01% Liquid CD promotion is over.
I personally think gmac is a great deal at 4.6%.It is especally good since you can write checks and it has a atm card which gives 5 atm rebates per month!
allamerathlete
Greedy Member
posted: Mar. 3, 2006 @ 12:01a
I find this BT theory to be very interesting in how it works but it appears to me that there is no easy way to get the checks into a bank account that works for every person. Am I wrong?
manuel
Greedy Member
posted: Mar. 3, 2006 @ 12:24a
Ah but I am not every person and I have never had any trouble getting other peoples money into position to make some myself.
mbaker4096
Senior Member - 1K
posted: Mar. 3, 2006 @ 2:48a
manuel said: Ah but I am not every person and I have never had any trouble getting other peoples money into position to make some myself.Ditto.
Read. Learn. Adapt. There's always a way.
allamerathlete
Greedy Member
posted: Mar. 3, 2006 @ 11:38a
At what amount of money do you actually see this to be profitable? Seeing how some have minimum payments and BT costs associated? Any opinions? Or anyone have any specific stories they have used succesfully and the type of return they see?
nakor28
Serene Member
posted: Mar. 3, 2006 @ 12:11p
Consider Treasury bills, especially if you have reasonably high state tax rates.
Using my tax brackets of 25% federal, 8% state (MD):
ING at 4.75% equates to 3.18% after tax
3-month T-Bill at 4.625% equates to 3.47% after tax
You won't know what the rate will be for each bill until the auction date a few days beforehand, but they don't fluctuate wildly from month to month. You can also set up automatic rollovers very easily on the Treasury Direct website.
Kjeldorian
Member
posted: Mar. 3, 2006 @ 2:47p
allamerathlete said: At what amount of money do you actually see this to be profitable? Seeing how some have minimum payments and BT costs associated? Any opinions? Or anyone have any specific stories they have used succesfully and the type of return they see?
I would be interested in reading some answers from you that do this as well, please. I think this is a very good question, I look for responses to weigh a decision to partake in this venture. It's a time investment situation...how much money would I make per my time involved vs. time used to do other hobbies, family time, free time etc.
Feedback is definitely appreciated.
mbaker4096
Senior Member - 1K
posted: Mar. 3, 2006 @ 3:28p
I'm making between $9K and $10K per year (pre-tax) from interest and sign-up bonuses. I'm also avoiding paying any interest on my $35K or so HELOC balance as well because of the AOR funds.
Doesn't take much effort after the initial sign-up and setup, but then again, I like looking at my finances.
Kjeldorian
Member
posted: Mar. 4, 2006 @ 7:22a
Thanks for the info! Apparently, with that amount of money, it seems a timeworthy project.
How much BT money are we talking about? I wonder where that point lies to start it? Meaning, would one undertake this project at $50k, $80k, nothing under $100k?
sorry if this may have been answered before. I started reading link after link yesterday, but there are many! I didn't even come close to reading all the posts.
Kjeldorian said: Thanks for the info! Apparently, with that amount of money, it seems a timeworthy project.
How much BT money are we talking about? I wonder where that point lies to start it? Meaning, would one undertake this project at $50k, $80k, nothing under $100k?
sorry if this may have been answered before. I started reading link after link yesterday, but there are many! I didn't even come close to reading all the posts.
thanks!
I think it depends on the person. We started the AOR process last year, maxing out around $30,000 in BTs. We would have liked to do more, but it took time to get our CLs up. No we have about $60,000 out and are ready for round two. Hopefully, we can keep it at $60,000 or higher. From what I've read, it can take years to get above $100,000, so most people start much smaller.
It's a project and a hobby. I think it is easy money, but some people think it is a lot of work and not worth it.
EricGo
Senior Member - 2K
posted: Mar. 6, 2006 @ 7:34p
I have BT money all over the place (ED, Bonds, money market fund at Schwab)
Does anybody know if the Scwab money market fund is considered an investment, that after 12 months would be taxed at 15% captial gains, rather than my usual tax rate of 25%. If so, it would make the rate very competetive.
workingonit
Senior Member
posted: Mar. 19, 2006 @ 1:44a
EricGo said: Does anybody know if the Scwab money market fund is considered an investment, that after 12 months would be taxed at 15% captial gains, rather than my usual tax rate of 25%. If so, it would make the rate very competetive.
EricGo, not sure why you would think any MM fund would qualify for favorable tax treatment? Is there something special about this one?
manuel
Greedy Member
posted: Mar. 19, 2006 @ 10:58p
More directly to the point you can't have capital gains in a MM fund - whole idea is a constant share price. Now if you put the money in a short term+ bond fund than you can have capital gains (or losses) and those would be eligible for possible better treatment. Course the dividends in those funds would(by and large) not be.
tooshy
Frivolous Member
posted: Mar. 20, 2006 @ 10:20a
I'm less interested in where to put AOR money, but curious how does everyone sleep at night. On a visceral level, I feel I've lost control and I've never done a real AOR, at best I've applied for two or three credit pull apps on the same day. Mainly because I do not trust cyberworld, Yodlee, TD, internet banks (names I've never heard before), assume there is an upper limit to the number of cc accounts one should have.
I think those who are fully able to max AOR opportunities, 1) have a basic trust of cyberworld, 2) have a wild west mentality, 3) have a sharp, organized mind and can instantly frame everything into neat little pockets.
While I don't measure up to the requirement, I think coming here has opened my acceptance of cyber finance. If I didn't find FWF, I'd still be keeping money in my local credit union or other banks in town as most people I know still do.
Personally I've used cc floats as another layer of liquidity (am I using this word wrong?) that affords me to more aggressively tie up our money in other investments ahead of the "paycheck".
Skipping 12 Messages...
charleslanger
Member
posted: Oct. 27, 2006 @ 7:33p
You know, I've been wondering for long why NO ONE's ever posted re rolling over / compounding 28-30 day CD's @ almost 2% for an extended period...
Impossible that i've re-invented the wheel w/ all the brilliant geniuses here...so i must be missing something real obvious????
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