Does anyone actively do this? Getting a 0% balance transfer credit card with a decent limit, and then requesting the balance transfer as a 'cheque to self' to deposit into your offset account for the duration of the promotional period? Hopefully it's an easy as it's made out to be, but would like some first hand experiences Cheers
You need to be careful and understand the terms and conditions, if you miss a payment the interest rate may jump from 0% to the usual credit card rates for the remaining duration of the loan.
Presumably you're wanting to play the banker's game and get some cash at 0% to use for 12 or 18 months, pocketing the earnings. Is the game worth the candle, considering the pitfalls? I actually considered this as an option, maxing the card on ounces, then transferring the balance to zero percent for 18 months (not sure if that's available still). A bit too much of a gamble in a rigged market for me. Up or down would be a guess at best, but I'm still pondering it, but I'll need better indicators than at present.
Generally credit cards treat cash withdrawals differently from credit card purchases, in as much as, for credit card purchases you usually get a month before they charge you interest, for cash withdrawals you get interest applied immediately. Yours may be different, I read a cc agreement many years ago and haven't looked at one for awhile. Maybe if you took the cheque out on one credit card, and then transferred the balance over to the 0% account you might get away with it. Credit card companies are pretty quick to jump on these sorts of things, I got away without paying any interest for two years before they worked out how to stop people doing that.
I don't see many pitfalls personally, however open to things that might be a problem. Effectively you're taking a 0% interest loan (provided you make minimum repayments every month), and leaving it in cash in an account. It's not investing as such, more just offsetting the mortgage saving you $$$ in interest. Jis, Citibank offer a "cheque to self" option which is part of their balance transfer - meaning it can be deposited into any account you wish.
Why not play the banks off against each other? As long as you have the discipline to pay it off before the balance starts to incur interest. Be mindful of any hidden costs such as service fees etc.
you need a plan, get a guy who is very familiar to explain to you how a step by step. then plan all your documents, set up to a possible 10x facilities form 10 banks. once the things are confirm, then you can roll it 100k x 10 =1 millions of free facility for 5 yrs. and you are in the game. each bank usually offer for 6 mths, free etc. some only offer a one time offer. etc. get the plan. so if your income is 50k a year, then you can roll it to 2 years of 100k, with your 100k of limit facility, each bank may have the chance of twice in and out each year. the bank requires monthly repayments, so your monthly income must cover eg 3% of the loan amount for your plan to roll. etc. never over extend, since the umbrella would be taken away when the rain starts !!!
Its been possible to exploit this loop hole for years, but now recentley Citibank has now started selling this as a product. Essentially I have heard its possible to do this by Having credit cards with separate banks in an account linked to a current account and atm card. You then apply for a interest free balance tranafer from one bank to another, if it gets approved they transfer $X to that credit card leaving it with a positive balance. You then do an internal transfer of $X to your current account. This will not uncurr the high interest fees as you are not borrowing money you are transfering a positive balance. You payback the money before its due then, Wash rinse and repeat. Financial engineering for the masses?
