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Jan 9, 2009 
12/18/08
You can turn your good credit into cold, hard cash using low-introductory credit card offers with a method called Balance Transfer Arbitrage! Sound simple? It is, and I’m going to explain how to do it!
Balance Transfer Arbitrage is a method where one can use 0% or very low introductory rate periods given by credit card companies and actually make money on the money they borrow by cashing in their credit line (in the form of a balance transfer check written to one’s self) and placing it into an INTEREST-GENERATING bank account for the term of the “teaser rate.”
In other words, you would sign up for a credit card offering, let’s say 0% for one year, but instead of writing the balance transfer check to another creditor, you instead write it to yourself and place it in the bank where it will earn interest. The discipline comes in pulling this money out of the interest-generating account in time to pay back the credit card company before the introductory rate expires (usually best to pay the money back about a month or two before the introductory rate expires so as to avoid any chance of there being any sort of holdup or snag in processing the funds which may result in your paying penalties.)
Usually the best interest rates for bank accounts are found online. I personally have been very happy with the ING Orange Savings Account which also offers CDs (certificates of deposit) of varying lengths which usually pay a percent or so better than their savings account. Placing a credit card’s one-year introductory rate cash into a 9-month CD is what I suggest the most so that you have ample time to withdraw your money, transfer it back into a normal bank account and then pay off the credit card company.
Of course you need to still be making your minimum monthly payments to the credit card company during this time, but you’re paying down pure principal so whatever you pay during this time goes back in your pocket when you cash in the CD.
As with any business venture, if you can compound a small success many times over, you can turn something like this into a very nice income for yourself. Start small and be organized and don’t worry, you’re not doing anything wrong at all! Banks take YOUR money and invest it elsewhere for a profit (that’s their business!) so why shouldn’t you benefit from them in the same manner?
Thanks for reading! Please visit my website at http://www.letsgetahead.com for more great articles like this one!
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