Credit Cards

Heard of people getting say a $20,000 credit card at 0% interest for maybe 6 months or a year and taking that $20,000 and putting it in a high yield interest savings account and pocketing the difference between the the two interest rates. I think the card companies may have wised up to that though and may now charge higher balance transfer fees.

 

You CAN play that game...but you can't keep adding to the debt. If you flip 2 cards to 2 NEW 0% cards and work on paying them down, in 12 months your OLD cards would most likely give you 0% (or damn close) to transfer back.

 

I was sort of doing it that way until my wife was out of work for an extended period and we had to run up the cards to make up for her lost income. Now I have too much debt to qualify for another card....

 

heard frank abagnale interview on diane rehm show last year:

http://wamu.org/programs/dr/07/05/21.php

for those who don't know him ... frank abagnale is the "catch me if you can" movie guy who now works as security consultant. his recommendation: use credit cards for everything! that way your personal information is not being shared and you are using the credit card company's money. he says writing checks is a very bad idea b/c all the information about your account is right there ... name, address, phone number and account number. using debit cards is a little better but you are using your own money there.

my personal experience in disputes and fraudulent use ... the credit card companies move very quickly on these and thus far i've never incurred any liability for those instances.

word of warning here ... only use your credit card in this manner IF you have the discipline (and the $) to keep your credit card paid off every month!

one other thing ... your credit card company can change your interest rate WHENEVER certain conditions are met. read the fine print on your card agreement ... and pay attention to any notices you receive in the mail. they are required to notify you of any changes in the agreement, but they will not call too much attention to a rate increase notice. it would be to their advantage if you just tossed this information and didn't notice that your old 12% rate just jumped to 27%. credit card companies LOVE revolvers (those who carry a balance) and they tolerate deadbeats (those who do not carry a balance).

frontline (PBS) ran a program about credit cards ... there was some good consumer information there too:
http://www.pbs.org/wgbh/pages/frontline/shows/credit/