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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 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.
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