i’m thinking of stopping arbitrage all together, simply because i’m getting to uncomfortable with the debt portion of the balance sheet which is all arbitrage.

I guess you’ll have to wait for a few months until your address is ’seasoned’.

(Editor’s note: My debt is incurred from an engagement ring purchase. Such purchase has made it possible for me and my fiancee to move in and save much more on costs of living. We’ve even moved together and both obtained high paying jobs and make extraordinary more money than we spend each month. I choose to keep this debt because I’m willing to spend 8% in order prefer to make a risk-adjusted 13% via Prosper. I will admit it made more sense when I could deduct the interest on my HELOC).

The truth is that credit card companies are particularly good at two things: marketing and statistics. The statistics say that they are going to make money from you, one way or the other. In Vegas, the casinos make far more money from people who think they can count cards than they lose from people who actually can. Don’t think that the actuaries haven’t figured out that some people are going to try and play this game. Credic card companies make a lot of profit, and they don’t make it by giving money away.

(Editor’s note: The difference between the two is that a person can ensure themselves a 95% chance of winning in the credit card game if they are willing to work and play by the rules. The best at the casino is somewhere around 50%. I was looking to take advantage of the 95% chance of winning because I’ve now played by the rules (paying on time etc.) for 14 years now. However, the “average” person doesn’t do this, which is where credit card companies make the money.)

Look and see how long the rates last and if the entire balance is covered. Also, look at the fees (can be as high as 3%) and calculate the real costs. Seem OK? Now, look at the fine print and see if their is a universal default provision, where they can raise your rates arbitrarily for any reason whatsoever (such as a change in FICO). Now, consider that it is entirely possible that you could lose your job, have a major healthcare event, or something worse while this debt is owed. Yuck!

(Editor’s note: Yes, I’ve looked at all these and applied for a card that other people have had success with. Also, I could always shift and use my HELOC to pay off the credit card in a major event. That would put me back where I was before… In the worst case, I would be no worse off, just wasted time.)

Think of it this way … even at 0% you are losing the 5% you could be getting on your monthly payments by putting them into a good savings account, or the 10-12% you could be getting in the stock market. With your existing income, you should be able to pay off your debt very quickly, then start folding the money into your 401K or a Roth IRA. Build long term wealth, don’t just shift your debt around.

(Editor’s note: I was trying to get their 0% rate so that I could pay off the 8% HELOC. That’s a guaranteed 8% savings to me, which is better than 5% in a good savings account. I wouldn’t put the money in the stock market, but even so, 10-12% is a high-end estimated percentage – I like to go with 8-9%. The stock market carries risk, so I wouldn’t put the free loaned money from the credit card company there. I’d take the sure 8% savings. I suggest reading How to Create a Money Farm to understand that I wasn’t just attempting to just shift debt around. I was building long term wealth. Arbitrage is a common way that people and many companies do that.)

Peace and Blessings!

However, the fact that they are requesting that information is not unreasonable. Since the Patriot Act, banks are required to obtain AND verify physical & mailing addresses, ssn, dob, name, ect. They are required to get information derectly from official sources (post office, cc companies, other banks) and thats why they were not able to take a statement printed from the computer. They would no longer be complying with the Patriot Act if they accepted that as a source.

How they handled it was ridiculous though. All they had to do was call your bank WITH you on the phone, have you give security info to your bank and then have your bank verify your address & other info. One call would have handled it all for you. Unfortunately, the reps you talked to weren’t willing to go the extra mile.