UnThreaded | Threaded | Whole Thread (17) | Ignore Thread Prev | Next
Author: Azurik Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35365  
Subject: Make $580 free using I-Bonds and Credit Cards. Date: 6/29/2003 3:16 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
Here's how you can make $580 of free money using I-bonds and credit cards. Thanks LittleHulk:)

1. Apply for 2 cards - 1 offers rewards and the other offers 0% for 12 months. For example, I have an American Express Platinum Business Card with 1.5% cash back. You use the first rewards card to purchase $7600 of I-bonds. You then transfer the balance to a 12 month 0% credit card. For example, there's a promo for the Citi Platinum Select MasterCard. 0% APR on balance transfers until September 1, 2004! Go to www.lowrate.citicards.com to apply and enter the promo number 1358337. Then you transfer (not cash advance) an additional $2400 from the 0% credit card to yourself (or to your family member if they do not allow to transfer money to yourself and have your family member give you back the money).

2. You now owe your 0% credit card $10,000. You owe your first card with the rewards nothing. You have $2400 of cash, and you own $7600 of I-bonds from US treasury.

3. You place the $2400 in a money market account that earns 2.2% Netbank, or if you have ING that earns 2.0%. You must pay your 0% credit card the minimum balance of 2% each month, roughly $200 (2% x $10,000). You will use that $2400 to pay your 0% credit card. Set up auto-pay to avoid late fees.

4. Sit back and count your money. Redeem the bond after 12 months and pay off your 0% card account.

I-bond: 4.66% (as of 06/11/03)
Minimum wait time before redemption: 12 months
Penalty for early redemption prior to 5 years: 3 months interest
Interest earned after 12 months = 7600 * 4.66% * 0.75 (penalty) = $265
After tax income (assume 25%) = $265 * 0.75 = $200
Rewards Incentives: AMEX 1.5% cash back = $7600 *1.5% = $114
or GMCard* 5% = %7600 * 5% = $380
Total After Tax Free Money = $200 + 380 = $580

*GMcard 5% is for use toward purchase of a new GMC vehicle, not cashback.
*Netbank offers $50 to open an account. Interest from Netbank's $2400 is about $20.
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (17) | Ignore Thread Prev | Next

Announcements

Managing Your Wealth
Our own TMFHockeypop from Rule Your Retirement fame on the TV show Managing Your Wealth.
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.
Post of the Day:
Apple

Apple and Ninety Years Ago
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! 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.
Advertisement