Cashing-in on credit card 0% transfers

Wsj.com also had an article on how to cash-in on the 0% offers from credit cards.

The strategy involves applying for one or more credit cards that charge 0% interest on balance transfers, then put these borrowed funds in high-yield online savings accounts, which often pay 5% or more.

However, card companies are taking steps to make it tougher.

Some card issuers have reduced their offers of interest-free balance transfers to six months from 12 months or have tacked on bigger fees to transfer balances.

Previously, such fees were often waived or limited to 3% of balances, with a cap of $50 to $75. But recently, Bank of America and Chase eliminated their transfer-fee caps on more of their offers, while Citibank raised its maximum fee on some offers to $250.


Liz Pulliam Weston had an article on people make money on low-rate credit cards balance transfers.

However, she warned that chasing these 'free' cash may dent your good credit score.

Credit card transfer arbitrage

1) A good place to invest the money
2) Offer of 0% or very low interest rate on the borrowed money
3) Borrowed money not treated as "cash advance"
4) No or very low fees on balance transfers
5) After transfer, don't use the cards for any other purpose

My experience

Since last year, I have done a few of these 0% balance transfers. I put the money from transfers into T-bill to earn 4% to 5% of interests.

So far, I made over $1,000 on the interests.

Universal default clause - However, if I miss one payment to any credit card and all these 0% rate offers would end.

The hard parts for me are:

- To remember and make all those minimum payments before they are due.
- To remember when all the 0% rates offers would expire - call to confirm with credit card companies.
- To manage the process from T-bill to bank, and then to credit cards.