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Free Monaey? Or just how stupid are credit card companies?

Discussion in 'BBS Hangout' started by No Worries, Jul 20, 2006.

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  1. No Worries

    No Worries Member

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    I am not recommending this but ...

    I average 3-4 new credit card offers in the mail each week. Most come with a no-interest-for-a-year xfer or check deals. I also get the same deal from the 3 credit cards I own, about every other month.

    Here is the scheme ;)

    Create a brokerage account. Write the special offer check to the brokerage company. Put money into a money market fund with check writing privileges. Pay the minimum monthly payment from the money market fund and pay off the debt when it comes due.

    The credit card company essentially lent you money free for a year, while you invest the money in a risk free fixed income instrument.

    For a $100K loan, you would earn $5K (or so) in a year. Not enough money to live on, but it is free. The only questions are

    how well would this scale?

    and

    what would this do to your credit?

    I suspect the credit card companies might get suspicious if you 50-100 cards that are maxed out most of the time. Might be impossible to get more than 10 cards before the offers dry up.

    I suspect that your credit report would be completely shot if you are carrying a debt which is a high multiple of of your yearly income.
     
    #1 No Worries, Jul 20, 2006
  2. Mr. Clutch

    Mr. Clutch Member

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    There is also a problem with fees associated with the opening the credit card and with writing the checks. Those fees may add up to more than you get back in the money market fund.
     
    #2 Mr. Clutch, Jul 20, 2006
  3. No Worries

    No Worries Member

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    Check Fees? I never actually written a credit card check, so that is news to me.

    I don't think I have ever paid a fee to get a credit card. I vaguely recall seeing opening account fees on cards that promised really low interest rates. Is that what you are talking about.
     
    #3 No Worries, Jul 20, 2006
  4. MadMax

    MadMax Member

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    don't waste your time with this. do you have any idea how much money you can make returning lots and lots of glass soda bottles for deposit in the back of a US Postal van?
     
    #4 MadMax, Jul 20, 2006
  5. No Worries

    No Worries Member

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    I am only in the business plan stages ;) thanks :)
     
    #5 No Worries, Jul 20, 2006
  6. MadMax

    MadMax Member

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    if you decide to take that trip to return the bottles, let me know.
     
    #6 MadMax, Jul 20, 2006
  7. Mr. Clutch

    Mr. Clutch Member

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    Yeah, that might be it- opening account fees. I think there might be some processing fees for using their checks. I actually got some zero percent checks yesterday so I'm going to check the fine print.
     
    #7 Mr. Clutch, Jul 20, 2006
  8. No Worries

    No Worries Member

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    Thinking about it, I would be surprised if the checks do not come with fees, except maybe at Xmas or tax time. That is the credit model: Get paid on purchases.
     
    #8 No Worries, Jul 20, 2006
  9. ima_drummer2k

    ima_drummer2k Member

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    No Worries, are you by chance an ex-Enron executive?

    ;)
     
    #9 ima_drummer2k, Jul 20, 2006
  10. No Worries

    No Worries Member

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    No, I am not an Exron employee.

    I am just kinda po-ed about all of the credit card junk mail I get. I thought I might have found a away to disencourage credit card junk mail and make money at it too. Maybe when my 3 year old son gets older I use him as slave labor :) telling him that it is easier than looking for glass bottle or aluminum cans ;)
     
    #10 No Worries, Jul 20, 2006
  11. Dr of Dunk

    Dr of Dunk Clutch Crew

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    Well if it makes you feel any better, I got it. :D
     
    #11 Dr of Dunk, Jul 20, 2006
  12. Mr. Clutch

    Mr. Clutch Member

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    I use this service. https://www.trustedid.com/

    It eliminates all pre-approved credit card offers (though I still get a few every once in awhile). Also, anytime credit is opened in your name, you have to personally verify that you are opening it. Costs like $7 a month but I feel it's worth the fraud protection.
     
    #12 Mr. Clutch, Jul 20, 2006
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