Comments on: Death of the Balance Transfer Arbitrager http://www.lazymanandmoney.com/death-of-the-balance-transfer-arbitrager/ Saving, Earning, and Investing Money Sat, 21 Nov 2009 00:22:17 -0800 http://wordpress.org/?v=2.8.5 hourly 1 By: Finance Entry http://www.lazymanandmoney.com/death-of-the-balance-transfer-arbitrager/comment-page-1/#comment-129508 Finance Entry Fri, 20 Mar 2009 05:16:35 +0000 http://www.lazymanandmoney.com/?p=1046#comment-129508 Weakness of Balance Transfer Credit Cards Balance transfer credit cards allow you to transfer the balances from your other cards onto your new card. The 0% introductory APR is great because it allows you some time to pay off these debts without being charged interest, but if you’re not careful, you may find yourself paying more than you thought. Offers often charge 0% on transfers but may charge a very high interest rate on any new purchases. In addition, they may not be able to be paid off until your transferred balances are paid in full. This can equate to you paying a lot in interest charges on these new purchases. Weakness of Balance Transfer Credit Cards

Balance transfer credit cards allow you to transfer the balances from your other cards onto your new card. The 0% introductory APR is great because it allows you some time to pay off these debts without being charged interest, but if you’re not careful, you may find yourself paying more than you thought. Offers often charge 0% on transfers but may charge a very high interest rate on any new purchases. In addition, they may not be able to be paid off until your transferred balances are paid in full. This can equate to you paying a lot in interest charges on these new purchases.

]]> By: Andy J http://www.lazymanandmoney.com/death-of-the-balance-transfer-arbitrager/comment-page-1/#comment-108664 Andy J Tue, 14 Oct 2008 16:51:11 +0000 http://www.lazymanandmoney.com/?p=1046#comment-108664 This arbitrage play was a bad idea for most people as they didn't see the impact to their credit scores. Every time they open a new card, their credit score declined. Plus, many people I knew doing this were just playing a shell game. They had no strategy to paying down their balances. Suddenly, they found themselves in the throws of 5 figure balances and needing to constantly play this game. This is why most credit counselors do not recommend credit card transfers as a debt reduction strategy This arbitrage play was a bad idea for most people as they didn’t see the impact to their credit scores. Every time they open a new card, their credit score declined. Plus, many people I knew doing this were just playing a shell game. They had no strategy to paying down their balances. Suddenly, they found themselves in the throws of 5 figure balances and needing to constantly play this game.

This is why most credit counselors do not recommend credit card transfers as a debt reduction strategy

]]> By: Mrs. Micah http://www.lazymanandmoney.com/death-of-the-balance-transfer-arbitrager/comment-page-1/#comment-104420 Mrs. Micah Tue, 09 Sep 2008 21:10:17 +0000 http://www.lazymanandmoney.com/?p=1046#comment-104420 When I looked at it, I decided that it would take a lot of money for it to be worth the stress I'd feel doing it. And that if it were that much money, I wouldn't want to risk it...plus the whole not have any credit whatsoever until earlier this year thing. ;) When I looked at it, I decided that it would take a lot of money for it to be worth the stress I’d feel doing it. And that if it were that much money, I wouldn’t want to risk it…plus the whole not have any credit whatsoever until earlier this year thing. ;)

]]> By: jim of Blueprint for Financial Prosperity http://www.lazymanandmoney.com/death-of-the-balance-transfer-arbitrager/comment-page-1/#comment-103462 jim of Blueprint for Financial Prosperity Thu, 04 Sep 2008 03:50:57 +0000 http://www.lazymanandmoney.com/?p=1046#comment-103462 I did a little bit of it, maybe like $12k on three cards, and it really wasn't worth the hassle. Now it's definitely not worth the hassle. I did a little bit of it, maybe like $12k on three cards, and it really wasn’t worth the hassle. Now it’s definitely not worth the hassle.

]]> By: Writer's Coin http://www.lazymanandmoney.com/death-of-the-balance-transfer-arbitrager/comment-page-1/#comment-103251 Writer's Coin Wed, 03 Sep 2008 10:56:14 +0000 http://www.lazymanandmoney.com/?p=1046#comment-103251 I remember the first time I read about this. I was very impressed but there was no way I was going to get into it. I remember the first time I read about this. I was very impressed but there was no way I was going to get into it.

]]> By: Jared http://www.lazymanandmoney.com/death-of-the-balance-transfer-arbitrager/comment-page-1/#comment-103214 Jared Wed, 03 Sep 2008 03:08:45 +0000 http://www.lazymanandmoney.com/?p=1046#comment-103214 I played the game to rid myself of debt, but I did it in a much safer way. I transferred all my credit debt to one card, called the empty one and requested a better rate (got 10.99% down from 32%) and transferred back to that card. I then proceeded to do the same until all of my cards had low rates and all of my debts were on one card. Then I payed off that card as fast and hard as I could. Overall it saved me a whole lot of time and money. A lot of work and phone calls, but well worth it. I played the game to rid myself of debt, but I did it in a much safer way. I transferred all my credit debt to one card, called the empty one and requested a better rate (got 10.99% down from 32%) and transferred back to that card. I then proceeded to do the same until all of my cards had low rates and all of my debts were on one card. Then I payed off that card as fast and hard as I could. Overall it saved me a whole lot of time and money. A lot of work and phone calls, but well worth it.

]]> By: Lazy Man http://www.lazymanandmoney.com/death-of-the-balance-transfer-arbitrager/comment-page-1/#comment-103184 Lazy Man Tue, 02 Sep 2008 23:24:23 +0000 http://www.lazymanandmoney.com/?p=1046#comment-103184 Using Prosper would be very bad. You have to pay back the balance at some point and it's usually much earlier than the 3 years that it takes to complete the loan term. And as you said, it's far from riskless - you could get yourself into quite a bit of trouble with such a plan. Using Prosper would be very bad. You have to pay back the balance at some point and it’s usually much earlier than the 3 years that it takes to complete the loan term.

And as you said, it’s far from riskless – you could get yourself into quite a bit of trouble with such a plan.

]]> By: Eric http://www.lazymanandmoney.com/death-of-the-balance-transfer-arbitrager/comment-page-1/#comment-103182 Eric Tue, 02 Sep 2008 23:18:38 +0000 http://www.lazymanandmoney.com/?p=1046#comment-103182 What about using Prosper as the other side of the arb? Not riskless, but great potential. What about using Prosper as the other side of the arb? Not riskless, but great potential.

]]> By: ericabiz http://www.lazymanandmoney.com/death-of-the-balance-transfer-arbitrager/comment-page-1/#comment-103134 ericabiz Tue, 02 Sep 2008 18:33:41 +0000 http://www.lazymanandmoney.com/?p=1046#comment-103134 Too bad! I have about $22,000 arbitraged right now -- backed up by a 3.75% savings account at WaMu. Looks like the gravy train is about to end, though, as both expire in November and I (unusually) have not received any offers to replace them at less than 3%...which isn't worth it. Well, I had fun while it lasted, and was able to get some good $ off the money in my savings account (about $80/month.) -Erica Too bad! I have about $22,000 arbitraged right now — backed up by a 3.75% savings account at WaMu. Looks like the gravy train is about to end, though, as both expire in November and I (unusually) have not received any offers to replace them at less than 3%…which isn’t worth it.

Well, I had fun while it lasted, and was able to get some good $ off the money in my savings account (about $80/month.)

-Erica

]]> By: WealthBoy http://www.lazymanandmoney.com/death-of-the-balance-transfer-arbitrager/comment-page-1/#comment-103119 WealthBoy Tue, 02 Sep 2008 16:44:09 +0000 http://www.lazymanandmoney.com/?p=1046#comment-103119 The ability to perform credit card arbitrage is certainly coming to an end. Until short-term interest rates go back up, it will be very difficult to recover a transfer fee, let alone make money after deducting that expense. Even then, there isn't anything that would prevent credit card companies from raising transfer fees when short-term rates go back up. The ability to perform credit card arbitrage is certainly coming to an end. Until short-term interest rates go back up, it will be very difficult to recover a transfer fee, let alone make money after deducting that expense. Even then, there isn’t anything that would prevent credit card companies from raising transfer fees when short-term rates go back up.

]]> By: Mr. ToughMoneyLove http://www.lazymanandmoney.com/death-of-the-balance-transfer-arbitrager/comment-page-1/#comment-103099 Mr. ToughMoneyLove Tue, 02 Sep 2008 15:17:49 +0000 http://www.lazymanandmoney.com/?p=1046#comment-103099 Good riddance to credit card arbitrage. There are so many better things to do with your time and money. Good riddance to credit card arbitrage. There are so many better things to do with your time and money.

]]> By: jim of Blueprint for Financial Prosperity http://www.lazymanandmoney.com/death-of-the-balance-transfer-arbitrager/comment-page-1/#comment-103094 jim of Blueprint for Financial Prosperity Tue, 02 Sep 2008 15:04:27 +0000 http://www.lazymanandmoney.com/?p=1046#comment-103094 The 0% offers aren't gone but many have fees, which eat into your return. If you get a 3.75% savings account and the balance transfer has a 3% fee, you're talking an arbitrage opportunity of 0.75% that is also taxable. The 0% offers aren’t gone but many have fees, which eat into your return. If you get a 3.75% savings account and the balance transfer has a 3% fee, you’re talking an arbitrage opportunity of 0.75% that is also taxable.

]]> By: Lazy Man http://www.lazymanandmoney.com/death-of-the-balance-transfer-arbitrager/comment-page-1/#comment-103073 Lazy Man Tue, 02 Sep 2008 14:06:55 +0000 http://www.lazymanandmoney.com/?p=1046#comment-103073 Yeah, I recently wrote about high-yield checking accounts - http://www.lazymanandmoney.com/5-interest-from-a-checking-account-yes/. Some of them pay 6% or more, and there are some strategies there to make it minimal work (potentially - didn't try it myself) Yeah, I recently wrote about high-yield checking accounts – http://www.lazymanandmoney.com/5-interest-from-a-checking-account-yes/. Some of them pay 6% or more, and there are some strategies there to make it minimal work (potentially – didn’t try it myself)

]]> By: Tight Fisted Miser http://www.lazymanandmoney.com/death-of-the-balance-transfer-arbitrager/comment-page-1/#comment-103063 Tight Fisted Miser Tue, 02 Sep 2008 13:33:41 +0000 http://www.lazymanandmoney.com/?p=1046#comment-103063 It doesn't look like all the 0% offers are gone. This post is causing all your Google ads to be about 0% cards. You could get better than 3.75% on your money by using a high-yield checking deal. That is probably too much work but it is possible. It doesn’t look like all the 0% offers are gone. This post is causing all your Google ads to be about 0% cards. You could get better than 3.75% on your money by using a high-yield checking deal. That is probably too much work but it is possible.

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