Have you ever "Worked the system"?
By reinydawn
@reinydawn (11643)
United States
January 11, 2007 10:59pm CST
I get a slew of the credit card applications in the mail all the time saying 0% interest on purchases. Last year I decided to take advantage of a few offers. What I did was make my normal purchases, but I used the 0% interest credit card. Instead of paying the bill at the end of the month, I only paid the minimum due and I put the rest into a CD that matures when the 0% rate is up. I've made over $500 in interest doing this. I feel so good to be making money off of using my credit cards instead of paying interest!
You do need to be careful with this though. If you are 2 seconds late with a payment, the 0% rate goes over 20%. You also have to make sure that you are actually putting the money aside because the credit card compaines are counting on you having a big balance when the 0% goes away and they will make a fortune off of you with the interest.
2 people like this
5 responses
@brimia (6581)
• United States
24 Jan 07
I did do this once years ago. It's not a bad idea if you can keep on top of it, like you said. I don't like having a lot of credit card accounts open though either. It makes me a little nervous and can lower your credit rating if you have too many.
1 person likes this
@reinydawn (11643)
• United States
24 Jan 07
It drives my husband crazy, but he likes it when the CD's mature and we have a few hundred dollars left over after we pay the credit card.
@beckyjgb (67)
• United States
23 Jan 07
These are all great tactics to save money...and in your case even make money with the interest you are earning. However, be careful not to get caught up in this practice and do it with too many cards. Remember that the more open lines of credit you have, the lower your credit score will be. So once you pay those cards off, if you never intend to use them again, make sure to cancel them. You DON'T want to have a bunch of credit cards with huge credit lines. This will hurt you later if you want to make a major purchase, such as a car or a home.
1 person likes this
@reinydawn (11643)
• United States
23 Jan 07
Cancelling a credit card with a good standing is not good for your credit. Although having open lines of credit can hurt you, if it's managed properly it can help you. I'm also probably not going to need any more major purchases... We have no plans to move out of the home we have now, we've finally got it how we want it! I also wont have to worry about buying a car, I'll be getting one "free" every 4 years so credit wont really be much of an issue for me.
I still need to watch my credit score though because it will affect my insurance rates and such also. So far I'm in pretty good shape.
But yes, that is a concern we have to have now-a-days. Even good credit can hurt you sometimes!
@finlander60 (1804)
• United States
12 Jan 07
Sounds to me as if you have figured out a way to make the credit card companies pay you instead of the other way around.
Congratulations. I really hope it works out the way it seems to be. I do have a sneaking suspicion that if the credit card companies figure out what you are doing, this plan of yours will dry up.
1 person likes this
@reinydawn (11643)
• United States
12 Jan 07
As long as they are offering 0% interest I can keep my money in the bank. Once the 0% period is over - a year usually, I pay it off and I wont have the money in the bank any longer. There's usually a card that will have an offer to transfer a balance at 0% so I can use that for another year to get more interest.
But yes, once the 0% offer is up I will not have the money in savings to earn interest off of. I don't know that most people do this. The credit card companies are pretty confident that most people will not pay the full balance off when the 0% is over and they will then have a huge amount of interest to pay. I'm fortunate enough to not have to worry about that though. It is nice to "get one over" on them even if it's for a short time.
@sunshinecup (7871)
•
12 Jan 07
That sounds like an interesting idea. Never thought of using CDs before.
I only go for credit cards right at the point where when the introduction deal ends, I should be getting our tax return. So, I just pay the minimum payments until tax time, then I pay off the balance and never use the card again. Not until they have another low interest deal anyway.
@reinydawn (11643)
• United States
12 Jan 07
I have cards that I get cash rebates on, I use those and pay them off at the end of the month. They only cards I carry a balance on are the 0% ones.
You should really try not to use your tax return to pay off credit card debt. You can easily adjust your pay withholdings so you have that money all year long and wont need to have credit card debt. Right now, you are letting Uncle Sam use your money (interest free) all year while you pay interest on credit card debt. It takes a while to get used to, but it works really well for some people. I try to help my tax clients reorganize their finances to maximize all the money they have.
@minijammers1 (61)
• Pakistan
14 Jan 07
Yeah u ryt.. on credit tht.. thts benefit u have 45 days for rollin da investment.. but spent as much.. you knoe tht i have save money in ma account or i have anywhere.. and u can use tht.. but if u cross da limit and u dunt have tht much money..so u loose more then 100 % so use as much you have..till da end of the date..
1 person likes this
