Credit cards and short term intrest rates

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EQTRADER

I have received credit card offers for 0% balance transfers and cash advances with no transaction fee for months now . The average time span for these offers are approximately 10 months. I have taken advantage of this opportunity ( free money). Just for an example you can borrow $100,000.00 place it in a savings account (american express membership banking is paying 3.25%) and make $2,700.00 in interest and pay all the cards off in May of 2003. No risk, why is this so ?

I'm not an expert on economics but something is afoot! Any ideas ?
 
You might want to read the fine print in the offer. I bet the cash advance has an interest rate attached to it, but, not a front-end transaction fee (similar to points on Real Estate Loans).

If it does have 0% interest on cash advances and no transaction fees, then, it sounds like free money.......

Later,

Cracked
 
Originally posted by EQTRADER
I'm not an expert on economics but something is afoot! Any ideas ?
More...
The dumbest guy on the street set the price. This has been for a while for the credit card issuers.

More likely that they are not going to actually let you transfer 100K.
 
not sure about the US but in the UK these deals only apply to a transfered debit balance.

So you can transfer a debt to the card account and they will carry it for free for 6 months or whatever. It is a smart move because people who transfer a large balance are unlikely to clear it in 6 months and so they tie in another customer at nice juicy interest rates. The interest free period is just the cost of attracting a new customer.
I don't believe they will reverse this offer by giving a free cash advance. If they do, pls let me know so I can sign....pronto.
 
My parents financed the construction of a new garage with credit cards and balance transfers - no finance changes for about two years before paying it off interest free. It sure beats getting a home improvement loan at some stingy bank. Although the card companies won't let you take cash directly (without a motley assortment of transaction fees, service charges, and convenience fees) it is incredibly easy to do so because cash is fungible. By using the credit card to buy big-ticket items and doing the old balance transfer trick, you get to keep all the cash you would have spent. You just need to be ready to pay up in case the next credit card company says "no."

Its nice when the greater fool theory works on your behalf!

-Traden4Alpha
 
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