062703 said:MBNA billpay and paying out of your own funds are ways to maximize profit here. I will agree that in order to be considered gross profit the 2% payment made from BT funds must be considered but I always pay out of my own funds so it never really affects me.

Point taken(though now for an accurate gross profit calc, one would have to compute the opportunity cost of deploying personal funds and deduct that from the gross profit of the free money BUT this argument is moot if say for example one is constantly deploying personal funds from a 0% checking account)

By my approximate calculations the approximate gross profit to be realized by using 105k of free money in a 5.25% HYS a/c is 5,063 which quite obviously is not chump change by any means for spending the time it takes to research/implement/be diligent about making pmts. Here's the numbers from my spreadsheet

Prin Int PI Paid New Bal
105000 459 105459 2100 103359
103359 452 103812 2067 101744
101744 445 102190 2035 100155
100155 438 100593 2003 98590
98590 431 99021 1972 97049
97049 425 97474 1941 95533
95533 418 95951 1911 94040
94040 411 94452 1881 92571
92571 405 92976 1851 91124
91124 399 91523 1822 89701
89701 392 90093 1794 88299
88299 386 88685 1766 86919

UPDATE: Making the assumption that the personal funds being deployed to cover the gap between the int on the high yield account and the 2% min pmt imposed by the lender could have earned the same rate as the free money(5.25%), I arrive at a gross profit number of approximately 4613. Again no chump change but balance transfer fees, other miscellaneous fees like maintaining some kind of credit monitor svc, stamps(if applicable), bill pay charges(if applicable) will obviously push down that number some more.

Here's my revised numbers

Prin Int PI Paid New Bal Own Funds Loss
105000 459 105459 2100 103359 -1641 -79
103359 452 103812 2067 101744 -1615 -71
101744 445 102190 2035 100155 -1590 -63
100155 438 100593 2003 98590 -1565 -55
98590 431 99021 1972 97049 -1540 -47
97049 425 97474 1941 95533 -1516 -40
95533 418 95951 1911 94040 -1493 -33
94040 411 94452 1881 92571 -1469 -26
92571 405 92976 1851 91124 -1446 -19
91124 399 91523 1822 89701 -1424 -12
89701 392 90093 1794 88299 -1402 -6
88299 386 88685 1766 86919 -1380 0

nmithani said:062703 said:MBNA billpay and paying out of your own funds are ways to maximize profit here. I will agree that in order to be considered gross profit the 2% payment made from BT funds must be considered but I always pay out of my own funds so it never really affects me.

Point taken(though now for an accurate gross profit calc, one would have to compute the opportunity cost of deploying personal funds and deduct that from the gross profit of the free money BUT this argument is moot if say for example one is constantly deploying personal funds from a 0% checking account)

By my approximate calculations the approximate gross profit to be realized by using 105k of free money in a 5.25% HYS a/c is 5,063 which quite obviously is not chump change by any means for spending the time it takes to research/implement/be diligent about making pmts. Here's the numbers from my spreadsheet

Prin Int PI Paid New Bal
105000 459 105459 2100 103359
103359 452 103812 2067 101744
101744 445 102190 2035 100155
100155 438 100593 2003 98590
98590 431 99021 1972 97049
97049 425 97474 1941 95533
95533 418 95951 1911 94040
94040 411 94452 1881 92571
92571 405 92976 1851 91124
91124 399 91523 1822 89701
89701 392 90093 1794 88299
88299 386 88685 1766 86919

UPDATE: Making the assumption that the personal funds being deployed to cover the gap between the int on the high yield account and the 2% min pmt imposed by the lender could have earned the same rate as the free money(5.25%), I arrive at a gross profit number of approximately 4613. Again no chump change but balance transfer fees, other miscellaneous fees like maintaining some kind of credit monitor svc, stamps(if applicable), bill pay charges(if applicable) will obviously push down that number some more.

Here's my revised numbers

Prin Int PI Paid New Bal Own Funds Loss
105000 459 105459 2100 103359 -1641 -79
103359 452 103812 2067 101744 -1615 -71
101744 445 102190 2035 100155 -1590 -63
100155 438 100593 2003 98590 -1565 -55
98590 431 99021 1972 97049 -1540 -47
97049 425 97474 1941 95533 -1516 -40
95533 418 95951 1911 94040 -1493 -33
94040 411 94452 1881 92571 -1469 -26
92571 405 92976 1851 91124 -1446 -19
91124 399 91523 1822 89701 -1424 -12
89701 392 90093 1794 88299 -1402 -6
88299 386 88685 1766 86919 -1380 0

The numbers above add up to lot more than $1883 you mentioned in an earlier post. Thanks for taking the pain in calculating the above.

nmithani said:

UPDATE: Making the assumption that the personal funds being deployed to cover the gap between the int on the high yield account and the 2% min pmt imposed by the lender could have earned the same rate as the free money(5.25%), I arrive at a gross profit number of approximately 4613. Again no chump change but balance transfer fees, other miscellaneous fees like maintaining some kind of credit monitor svc, stamps(if applicable), bill pay charges(if applicable) will obviously push down that number some more.


Then throw in taxes and you get your big hit. While I do understand you will always have a net gain that you would not have had without AoR. After everything you listed I will be giving back almost 40% of it for taxes. Also I was already using Truecredit to monitor my file and Myfico for my real updated Equifax score. I did a bunch of extra experian pulls at a cost of $16 each to get a true gage of the affects of my AoR since most pulls were done with them. Wonder if I can deduct these as an investment expense? My thoughts about a future AoR include maybe waiting to I eventual stop working to reduce taxes, Or possibly invest the money in something safe so I would only pay 15% capitol gains

xCarsonx said:Bank Account____ 2% Monthly____ HY Savings____ Interest Monthly
1____ $105,000.00____ $2,100.00____ 0.0525____ $459.38
2____ $102,900.00____ $2,058.00____ 0.0525____ $450.19
3____ $100,842.00____ $2,016.84____ 0.0525____ $441.18
4____ $98,825.16____ $1,976.50____ 0.0525____ $432.36
5____ $96,848.66____ $1,936.97____ 0.0525____ $423.71
6____ $94,911.68____ $1,898.23____ 0.0525____ $415.24
7____ $93,013.45____ $1,860.27____ 0.0525____ $406.93
8____ $91,153.18____ $1,823.06____ 0.0525____ $398.80
9____ $89,330.12____ $1,786.60____ 0.0525____ $390.82
10____ $87,543.52____ $1,750.87____ 0.0525____ $383.00
11____ $85,792.64____ $1,715.85____ 0.0525____ $375.34
12____ $84,076.79____ $1,681.54____ 0.0525____ $367.84

Gross
Total Money $4,944.79

Tax Bracket 25% $1,236.20
Misc Expenses $300.00
BT Fees $525.00

Total Net $3,408.59

That's how I would calculate it. I have really enjoyed this thread. It helps me plan my AOR.

Updated for clarity

That's wrong. Your interest monthly column should at least be added back into the next months bank balance. What you claim to be the "Bank Account" is actually the "Credit card Balance."

All you really need to do is figure out the Ending Bank Account Balance and the Ending Credit Card Balance. The difference is the gross profit.

rogue409 said:xCarsonx said:Bank Account____ 2% Monthly____ HY Savings____ Interest Monthly
1____ $105,000.00____ $2,100.00____ 0.0525____ $459.38
2____ $102,900.00____ $2,058.00____ 0.0525____ $450.19
3____ $100,842.00____ $2,016.84____ 0.0525____ $441.18
4____ $98,825.16____ $1,976.50____ 0.0525____ $432.36
5____ $96,848.66____ $1,936.97____ 0.0525____ $423.71
6____ $94,911.68____ $1,898.23____ 0.0525____ $415.24
7____ $93,013.45____ $1,860.27____ 0.0525____ $406.93
8____ $91,153.18____ $1,823.06____ 0.0525____ $398.80
9____ $89,330.12____ $1,786.60____ 0.0525____ $390.82
10____ $87,543.52____ $1,750.87____ 0.0525____ $383.00
11____ $85,792.64____ $1,715.85____ 0.0525____ $375.34
12____ $84,076.79____ $1,681.54____ 0.0525____ $367.84

Gross
Total Money $4,944.79

Tax Bracket 25% $1,236.20
Misc Expenses $300.00
BT Fees $525.00

Total Net $3,408.59

That's how I would calculate it. I have really enjoyed this thread. It helps me plan my AOR.

Updated for clarity

That's wrong. Your interest monthly column should at least be added back into the next months bank balance. What you claim to be the "Bank Account" is actually the "Credit card Balance."

All you really need to do is figure out the Ending Bank Account Balance and the Ending Credit Card Balance. The difference is the gross profit.

For your gross profit calc, did u factor in the lost interest(opportunity cost) for putting in personal funds(non-BT funds) to cover the minimum pmt each month?

Hindustani said:I summarize the above discussion of gross profit for doing BTs here:

You have $150,000 available for BT on your cards. You utilize 70% of it and move it to a savings account with 5.25% APY. Assume the BT offer to be 0% for 12 months with $75 BT fee. Also assume that overall you are using 8 cards for the BT (for BT fees calculation) and that you have to pay back 2% as minimum payment. Finally, assume 1 month of interest loss for getting the cards, consolidating the lines, planning your BTs, moving the money to savings account etc.

Bank Balance(P)----- Interest(I)----- P+I-------- 2% Minimum Payment ------ Card Balance
105000------------------ 459--------- 105459--------------- 2100------------------ 102900
103359------------------ 452--------- 103812--------------- 2058------------------ 100842
101754------------------ 445--------- 102199--------------- 2016------------------ 98825
100183------------------ 438--------- 100621--------------- 1976------------------ 96848
98645------------------- 431--------- 99076---------------- 1936------------------ 94872
97140------------------- 424--------- 97564---------------- 1898------------------ 92974
95666------------------- 418--------- 96084---------------- 1860------------------ 91114
94224------------------- 412--------- 94636---------------- 1822------------------ 89291
92814------------------- 406--------- 93220---------------- 1786------------------ 87505
91434------------------- 400--------- 91834---------------- 1750------------------ 85754
90084------------------- 394--------- 90478---------------- 1715------------------ 84039

Gross profit: $6,045.00
Tax Bracket 25%: $1,511.00
BT Fees $600.00

Net profit: $3,934.00

Can u pls provide the info on ur present updated credit scores, if u have

thanksop

Got approved for BofA money returns and BofA Worldpoints cards today. Both gave me a CL on $5000. Total 9 approvals so far out of 19 accounts I applied for. Still 0 rejections.

bongoking said:hum I applied for 2 boa card the day before you (dec 4), and still haven't heard from them

I haven't received the cards yet. Both the cards showed up in my online account with BofA.

bongoking said:Actually I just logged in, and there they are, 10k and 5k.
I don't know yet which one is which.
nothing in the mail/email

When you click on the account it will tell you the name of the card on the top of the page.