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#1
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A coworker had this idea today at work. It seems like it's feasible, but the time and effort to go into it probably vastly outweigh the pros. Feel free to refine the plan, or talk about the pros and cons. Also, flame me unrelentlessly if this is completely ridiculous or talked about all the time.
So the idea is to take out a few credit cards that have 0% interest for the first x months or maybe a year. You then purchase a bunch of merchandise on the cards that you can easily sell for the same value (+ shipping) on EBAY. For example, you buy a bunch of XBOX games for $60 a piece and then sell them for approximately $60 or $65 on EBAY. You basically break even, but raise a whole bunch of cash in the process. You then invest all of this money the best that you can, all while making the minimum payments on the cards. When the 0% interest runs out, you pay everything back, and profit from whatever the investments made you. Is this idea feasible at all? Should I go back to OOT? |
#2
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You will pay taxes on all your stock earnings and you can't write off your credit card payments. Plus, stocks are variable and you could get burned for life. They recently changed the bankruptcy laws u know.
Indy |
#3
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I think it's feasible. I also think there are easier ways to make money.
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#4
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yes, very feasable, before I knew about high interest savings I did this with a money market checking, just wrote the balance transfer checks to my money market and just paid the minumum until interest was up.
Keep in mind the negatives, there are fees associated with the balance transfer, I think that was like 50 bucks cap per card. Your credit rating will go down due to numerous high balances. It does take time to get everything set up and if you forget to make payment you are screwed on all the interest. All in all I made money, I would say it was worth it back then considering I had little money to my name. Right now i don't think it would be worth it to do it again. |
#5
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You use the cash advance checks that come with the cards to stick the money in Emigrant Direct/ING/HSBC until a few weeks before the 0% grace period runs out and pay off the credit cards. You can check the forums over at fatwallet. A bunch of people have done this. The problem is if you don't pay off the balance on the cards before the grace period ends you're screwed.
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#6
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As recliner pointed out, the Ebay piece is totally unnecessary!
Borrowing to invest in the market is unwise (unless you really know/understand what you are doing), but in a safe interest bearing account, it is +EV to do this! The only question is, can you borrow enough at 0% for lomg enough to make it worth the time... and you still have to make monthly min payments. |
#7
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[ QUOTE ]
The only question is, can you borrow enough at 0% for lomg enough to make it worth the time... and you still have to make monthly min payments. [/ QUOTE ] Yeah, I think this is the main problem too. It certainly doable, but I don't think you can borrow enough to make it worth the time and effort. I think I'm still looking for some sort of get rich scheme to stop working an 8-5 job. |
#8
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It certainly doable, but I don't think you can borrow enough to make it worth the time and effort. [/ QUOTE ] My buddy at work does this. He's currently got about $40-50k of 0% (through early 2007) cash stuck in HSBC/ING. Easy way to make an extra grand post-tax and then either put it in the IRA or take a cruise. |
#9
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The credit card companies are on to this, and most of the time now there is a clause in the fine print that says there's a 3% initial fee for cash advances. Most of the 0% financing offers are for 6 months, so 3% eats your entire profit. Ebay fees would probably be about the same. Maybe you could buy a lot of stuff that was free after rebates? [img]/images/graemlins/smile.gif[/img]
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#10
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[ QUOTE ]
The credit card companies are on to this, and most of the time now there is a clause in the fine print that says there's a 3% initial fee for cash advances. Most of the 0% financing offers are for 6 months, so 3% eats your entire profit. Ebay fees would probably be about the same. Maybe you could buy a lot of stuff that was free after rebates? [img]/images/graemlins/smile.gif[/img] [/ QUOTE ] I have 0% on most of my credit cards and cash advances have a whopping 19.98% interest or some [censored] like that. Purchases are zero but cash advances aren't smart |
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