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Personal Finances / Credit Cards and Consumer Debt


Subject:  Re: An Interesting Plan Date:  8/12/2002  12:20 AM
Author:  xraymd Number:  136317 of 312189

Greetings, sighnomore, the problem with doing this as a CASH ADVANCE is that this tends to be the most expensive rate charged. Sometimes you can do this with a BALANCE TRANSFER at a low promotional rate and no transfer fee (which cuts into your interest profits) - see any post by joelcorley (do a search for his posts on this board).

You have to be VERY diligent about making sure you make minimum payments on time (usually made from your holdings, thereby reducing the amount of interest earned) plus you have to be darn sure to get the balance paid off long before the expiration date of the offer. Some offers are for fairly short periods of time, say 4 months, while others are stretching to 12-15 months. So you'd have to put the funds somewhere reliably liquid.

Finally, this is a dangerous game to play if you have any reason for your credit report to be scrutinized while your balances on the cards are up there - or even if you apply for a lot of new cards. If you are in the market for a house or car, this could hurt your chances for preferred rates on a mortgage or a car loan. Opening accounts definitely impacts your credit score and must be considered carefully with respect to all of your goals.

Do you have other, less risky ways of bringing home an extra $100 a month? A part-time job, maybe? I'm not saying that what you are thinking of does not work, just that you have to be very attendant to the risks involved with doing so. One late payment and the house of cards comes down - you will run the huge risk of losing your favored promotional interest rate and suddenly have to PAY interest instead of EARN it. Caveat emptor!

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