Message Font: Serif | Sans-Serif
No. of Recommendations: 0
I have read IRS Publication 550 and believe I have deductible investment interest even though it is on credit cards, but I wanted to run it by the tax mavens here. I have incredibly high credit card limits and was always getting the 0% offers and putting the money in the bank to get the interest and paying it back before any interest was charged by the credit card companies.

Now, given the interest rate environment, I have been getting offers only for 1.99% for the life of the loan or for six months to a year. I have an account through Ford I consider relatively safe (I can move money out on a moment's notice in case of imminent bankruptcy) that works like a money market account and pays interest at 5.54% currently. Technically the investment is buying notes from Ford Credit. Right now I have $80,000 borrowed on credit cards at 1.99% and parked in the Ford account paying 5.54%. I assume that the 1.99% I am paying on the credit cards is investment interest as I read Pub 550. Am I correct?

(particularly with the IRS)
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.