Balance transfer checks....

[acemcmac]

I have a 5 digit credit limit available to me, 0% for 6 months. I'm wondering if I shoudln't write myself a check, invest 95% of it, use the rest to help with immediate term liquidity, pay the minimums and in month 5, pay it off in full.

I can't really figure out if there are any pitfalls to this. I called the CC company and they just kept repeating that it was 0% for 6 months with no other fees or charges that they were aware of. The whole 3% fee on cash advances thing just makes me leery...

Anyone ever monkied with this stuff before?

 

[T9D]

That's exactly how people get in huge finacial holes.

Sounds good on paper until something doesn't pan out. Or people get to greedy and push it even more until they lose it all and are ruined financially.

Then again it could work out if you choose and plan right.

 

[jagec]

0% BT, or 0% APR? BT charges you a crapload.

Not worth it. Let's say you invest $10k and manage to get a 6% return in 6 months. Well, it cost you at least 3%, so you make...$300. If you're lucky. In six months. You'd be better off just putting in a few more hours at work.

On the other hand, if your stock DOESN'T go so well, you're out a bunch of money. You're automatically out $300, even if it breaks even. Losses go up from there.

 

[RossMAN]

CTrain did something similiar almost 2 years ago.

 

[Mermaidman]

It would only work if you start with a zero balance, and not use the card for purchases until you pay off the transfer.

The bank applies your payments to the zero percent balance first, so you'll accrue interest on the non-zero percent balance (if any).

 

[chowderhead]

There is a whole thread on this over at Chubbywallet finance forum dealing with the BT game with the application of new cards, 0% teaser rates, etc. For your situation, you need to find out if the 3% fee for the BT is capped (i.e. $75 or $90) or not. If you don't plan on transferring the balance to a new card , then you need figure out if you will make enough in 5 months (i.e. savings account) to justify the BT fee and the associated interest charged on that BT fee. It is "free" money but you have to be on top of paying the minimum off each month.

Edit: Don't trust what the CRS say. Look over the fine print on the checks they sent you and see if they charge you a BT fee or not. It should say if there is a 3% fee (capped or not capped) or it should say no BT fee.

 

[DaWhim]

my rule is DO NOT utilize over 50% of credit line. you are putting yourself at a high risk in the eyes of your creditor if you want to cash 95% of your credit line.

if there is no fee, just go ahead and do it. cash in advanced is a different thing.

 

[ISAslot]

I've done this before and am doing so currently. Stay away from their checks. Just call them and have them deposit the money in your checking. This way there is no fee.