How I Made an $1,800 Profit with My Credit Cards

by Scott Bilker
Scott Bilker is the author of the best-selling books, Talk Your Way Out of Credit Card Debt, Credit Card and Debt Management, and How to be more Credit Card and Debt Smart. He's also the editor and publisher of DebtSmartŪ.

Hi Scott,

I recently heard you on NPR radio 90.9 FM WBUR from Boston.

I was interested in how you borrowed from your credit card at a low interest rate and then invested it in a CD and earned about $1,800.

Which of your books covers that interesting topic I'd like to know more!
Thanks,
Leo

Leo,

Thanks for listening!

Actually, I didn't put the money into a CD, it was a Money Market Account. Also, I don't cover that in any of my books, but I will cover it here.

First off, I want to be clear that I'm not recommending that you do this. I present it here for your pure entertainment. "Kids, don't try this at home." I don't want to hear that someone cash advanced money and got into more debt, because you do get into more debt.

Okay, so now that I'm disclaimed and all (I hope), here goes. I wanted to do an experiment and see what would happen to my credit score if I suddenly added $62,000 to my debt load. Also, I wanted to test these 0 percent transfer offers to see if there are any catches and/or extra charges.

I took advantage of four 0 percent offers totaling $62,000 and put that money in an ING Direct Money Market. These offers were good for one year and the rate ING was paying at that time was around 3 percent. I held the money there for one year and paid it back to all cards when the offers expired.

The total interest earned from that experiment was $1,800! For the first time in my life, I was actually profiting from using my credit cards. It was like a refund for all past interest charges sucked out of my personal economy for the last 15+ years!

I also learned a few things that I will discuss briefly:

1. There are a few tricks in credit offers. One of these cash advance offers tried to charge me an overlimit fee which they quickly removed. You can read the details about this in my article, Chase Bank Tries to Pull a Fast One.
2. My credit score dropped from 736 to 728. Again, I must stress that this is what happened to me, and you may not get the same results. Right now my credit score is 819, and I'm trying to get to the absolute top of 850. Not bad for a guy with 50+ credit cards.
3. I was able to make money with this strategy. Of course, there is work involved, e.g., tracking the credit card deals, paying on time, writing checks, etc.
4. The minimum payment on one of those offers was $15 on a $9,000 balance. That's the lowest minimum payment I've ever seen. The reason is because they want my balance to be as big as possible when the rate changes.
5. When I paid these banks off at the end of the year, I received a call, the next day, with more offers to extend the 0 percent rate--I took them and made even more money!

I could expand on this article, but I'll leave that to my next book.

Regards,
Scott