Maximum annual income I ever earned from CC BT interest rate arbitrage and CC/bank rewards

Please post the maximum annual income you have managed to earn on a sustained basis (at least 2 years, please mention how long) purely from CC BT interest rate arbitrage (borrowing money at low interest rates from CCs and investing at higher rates) and CC/bank rewards (including sign-up bonuses).

I am hoping that this will give us some data points about how much income one can earn from these methods, with what kind of credit, and with how much effort.

I will go first:

I have been making about $3K per year from CC BT interest rate arbitrage over the last 2 years or so. My credit score is around 750 at healthy times, and around 100 points lower at the least heathy times (right after an App-o-Rama with 6+ recent inquiries and a large BT debt).

I have earned only small amounts from CC rewards. I have never gotten any sign-up bonuses so far (out of my own laziness; never managed to applied for accounts when bonuses were being given).

Anakin

Maybe it's me, but I don't see the point since you can kind of guess at the theoretical limits? I think $100k in BT per person without 100% utilization, is a fairly achievable conservative estimate.
so you got $100k X .04 = $4000 for BT
maybe $1000 for cc rewards and bonuses
so $5000 a year roughly?

maybe you hijacked your wife into the BT game or taken
over her credit card accounts so $10,000 per couple?
maybe you have very high limits and are at 90% utilization so $20,000 at most per couple?

maybe a more interesting discussion would be what's the ratio of how much money you have in CC BTs vs how much you make per year?
So say you have $100k in 0% BTs and make $50k per year at your job...$100/$50 = 2
who has 4? or 6? or 8? or infinity (if you're a student and don't make anything)

or maybe what have you done with your $100k 0% BT other than conservatively put it in a savings account (boring)?
maybe you decided to go to Vegas or put it in some stocks.
I think it would be interesting to hear some riskier stories

xerty said: The game theorist in me suggests that reporting unattractively low earnings in this thread will discourage others from interfering with my good deal.

You've just given yourself away.

xpguy does a good job of going through some plausible scenarios. Like xerty implies, however, there will always be those at the top of the curve who may do better.

How would others interfere with your good deal? How is this strategic interaction?

xerty said: The game theorist in me suggests that reporting unattractively low earnings in this thread will discourage others from interfering with my good deal.

If one were to post the limited exemplarity deal then everyone would do it more times than not nixing the deal.
Countless examples of this “FW effect”.

While it can be argued that this is counter productive to a message board about sharing strategies the reality is simply it is what it is.

The good news is if you take what you learn in strategy you can then identify opportunities that you may be able to take advantage of.

tooshy - Your time is obviously worth a lot more than mine, I feel very well compensated for the small amount of time I spend using OPM. Nor do I feel that potential larger returns in equities or whatever have much to do with sure things like other people's money.

i think i am taking a lot of risk on my 0% apr CC...i am investing it in mutual funds and getting about 14% annual returns..

that covers up a lot of school expenses...


any other good investing suggestions other than HBSC or ED are welcomed...

Got in on the Discover 0% for life deal (I buy a 1 cent stamp twice a month from my local post office). Converted the funds to euros at 1.1850 and holding for 1.4's within 2 years (only getting 2.50% at the moment in euros but hoping to get around 20% capital gains....ECB should keep hiking very slowly to sweeten the deal while the Fed holds).

Yodlee is the great equalizer. No need to clutter one's brain, just allow yourself the opportunity to get a high-level view of all your accounts from a single page.

Made $5K or so last year will clear $9K or so this year (pre-tax). Maybe an additional $1200-1500 in bonuses.

(As a caveat, no, this sort of income isn't reasonable to expect. I push things a lot farther than I really should. Current utilization is roughly twice my income. And although I don't feel I spend a ton of time on it, I do check my finances daily and enjoy doing so. The only way to make this sort of behavior pay well is to have large credit lines in the first place, and typically the only way to do that is to have a sizeable personal/household income. Doing the same sort of thing with smaller credit lines just ends up resulting in significantly less profits for the same amount of time invested.)

No wife, but I was able to pull in ~$1500 last year.

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.

revheck said: I would be interested in hearing both income and an accurate accounting of how much time you spend maintaining
so many credit lines, without EVER missing a payment--and thus computing an hourly wage.

This thread originated from a guy who just did an APP-O-RAMA with 20 credit lines. I know others here do this, but
for me it would drive me crazy keeping track of all these lines without screwing up just once and bringing the whole
scheme to a halt.

rev,

Unfortunately I opened 0% BT without any homework about 9 months ago. Curiosity brought me to wonder if it was legal or not and I found FW through searching. This year I will only make about 800. This is what I did to minimize my effort. Set up automatic payments from my savings on the first of every month equal to my min monthly payment. I have 3 lines and about 20k in 0%. I have probably spent about 1 hour in applying for the cards, about 30 minutes filling out 3 automatic deduction forms, about 5 minutes writing with a black magic marker the day the 0% runs out so that I don't forget about it and put the cards on my dresser. I will probably spend another 30 minutes making the final 3 online payments to wipe them clean. Finally 5 minutes writing this post, I shouldn't even be doing this because it's dropping my $/hr.

In all probably 2:10 rounding to 2 so about $400/hr. for me. I'm happy.