Economist said:How would others interfere with your good deal?
Like the year I found a small branch of USPS that let you buy money orders with your credit card (against USPS official policy)? You can bet they would have shut down this option a lot sooner if anyone else was buying them. That was a good year for credit card rewards, ~$10K .

xerty said:Economist said:How would others interfere with your good deal?
Like the year I found a small branch of USPS that let you buy money orders with your credit card (against USPS official policy)? You can bet they would have shut down this option a lot sooner if anyone else was buying them. That was a good year for credit card rewards, ~$10K .

yep, there was a branch about an hour away that did this, I liked to call it my dirty little secret

joeyjoejoe said:Ok so I admit that I'm a total noob at this, so rather than make fun of me or something, can anyone recommend a good site, forum, or possibly literature that outlines a specific strategy for this type of hobby? I have a desk job that affords me a lot of free time on-line during the day. Rather than spending it scouring the Hot Deals forum and spending my money, it would be nice to get something going along these lines. Thanks for help or advice in advance everyone. Cheers!

it's safe to say you've found it

grrarrgh said:one strategy that I never did, though I thought would be particularly ingenious, but requires lots of work, and still (I believe) is doable w/many Citi cards and BofA cards (until they stop you entirely):

1.Assume you have a 0 % BT card with citi, and the same w/bank X
2.Many citi cards have additional cash rewards for transferring, say, $1500, of $5 or so. BofA has a somewhat crappier deal -- $5 for $2500, I believe, though some cards maybe better than others. A .33% rebate on your citi -- not so great, no? Except...you can rinse and repeat as desired -- so the annualized return on this deal could be quite high.
3.Strictly speaking, you don't need 0 APR, you just need BT's treated as purchases w/grace period (capital one frequently does this, others may as well).
4.If one assumes .33% on both ends, and optimistic traversal time of between 3 to 5 biz days, and 252 biz days a year, one gets between 16.6 and 27.72% returns on the CL of the cards (Not quite accurate, insofar as you tie up ~2X the CL of the cars, assuming that they're identical.) Also, there are rewards caps on many cards (which may not be met -- I'd have to do the math).

In actual execution -- I assume you get shut down fairly quickly.

There are various ways to make it more doable, albeit more complex, like adding a 3rd bank, or paying very quickly by going straight from a citi bank acct to a CC acct, and playing w/float, but again -- just an amusing alternative. WAY too much work for me tho...

I believe someone did this with Citi and MBNA and they ended up getting their MBNA card closed before they had made as much as would have been made just by putting it in a bank for 12 months, not to mention that MBNA CL was now gone.

Quick question, I'm considering doing this with a Credit Card that's not quite at 0% inteerst, but still well below what I'll be getting on the other side. The question is, I know interest income is taxable, but would the interest I pay on the CC side be deductible against my other interest income? Thanks for your help.

I deduct mine and any advance fees as investment expense. Been discussed at length at FWF and I think it's clear that the rules are unclear.

Thanks guys, I guess I'm going to do it anyway, and sort it out come tax time.

xerty said:Economist said:How would others interfere with your good deal?
Like the year I found a small branch of USPS that let you buy money orders with your credit card (against USPS official policy)? You can bet they would have shut down this option a lot sooner if anyone else was buying them. That was a good year for credit card rewards, ~$10K .

$10,000 in credit card rewards? at 1%? So you bought one million dollars worth of money orders with cards?

Yeah that did seem like quite a lot of Money Orders.

As a follow up, I now have just a couple thousand dollars short of $100K borrowed at 0%, from a half-dozen Credit Cards, sitting at Everbank at 5.51% APY. But that's just a 3-month promotional rate, after that runs out I'll be at GE Interest Plus at 5.17% APY. So if I were to do this for a full year (won't quite be able to though because some of them go off 0% before then), it'd come to ~$5200.

All but one of the Credit Cards charged a $75 Balance Tranfer fee, totaling $375 in my case. But bonuses from various "open an account" offers that I've pursued will negate all but around $100 of that amount.

xerty said:cameron2003 said:$10,000 in credit card rewards? at 1%? So you bought one million dollars worth of money orders with cards?I think my AMEX at the time earned between 1.5-2%. Still a lot of trips to the post office.

haha that takes cahones! They must have been sick of seeing you.