Thursday, October 23, 2008

Rolling $$ across credit cards

Was thinking recently about how to earn some simple $$ or extend your credit terms for your payment. However this requires that you have a credit card, and preferably a high credit limit on all the cards.

The basic idea
  1. Get 2 credit cards ( lets label them as A,B)
  2. Using card A, you pay for something
  3. At the end of the month, use card B to promptly pay for card A.
  4. At the end of the following month, you will use card A to pay back for card B.
  5. Repeat 2 and 3 till you decide to pay off the debt by using the cash that you have.

See the potential in this system? ( I am not sure whether banks have a rule on this though)
Lets see how we can make use of this system...

Improving on the idea...

  • Say we have 12 credit cards, with $5000 limit on each.
  • Hence we are able to have 6 groups of 2 cards each.
  • Each group, we will draw out $5000.
  • Total we have 6groups X $5000 each = $30,000 at any one time
  • Putting this cash into a fixed deposit for a year ( or how ever long you want )
  • From the fixed deposit ( at an interest rate of 1.8% per year) you will get $30,000 x 1.8% = $540 per year
As you can see, we are getting free $!
Thus in order to maximize your returns, you will have to
  1. Get more credit cards
  2. Increase your limit
  3. Make sure you pay promptly every month!

Any people got any views on this? Please comment..thanks!

Apparently there are flaws in my ideas, as suggested by readers. I shall update on problems and possible improvements this link :


Anonymous said...

tried using credit card A to pay off for credit card B. not all cards allow the card bills to be paid by credit cards. please comment if otherwise.

ntuchartist said...

yup, not all cards allow you to do that, infact for most,using it as a advance cash withdrawal incurs very high interest.

However it looks like POSB cards can be use to pay for american express..

May I ask.. from your experience, what cards can be used to pay off for what cards?


Daniel said...

Dear NTU buddy,

This is Daniel, I happen to see your website URL somewhere in hardware zoon forum and found out your website indeed contains quite a lot of good info and ideas, some of them sounds quite innovative indeed. Though they might not be working as what you expect, but keep it up and you will find some working ideas somewhere in future.

Just to provide 2cent of my comments to this credit card roll-over idea, this one might not work to benefit you much but it will definetly harm your credit record if you going to try it as when banks review your home loan application, they will defintly judge you (based on all your credit cards payment record)in a position of lacking cash due to quite number of outstanding overdraft in various accounts, this then will become a serious problem for you to have any any bank loans approved in future, hence try not to practise this idea in your real life, man! :P

Wish to have a f2f meet-up with you in your coming 14 Dec gather, buddy!