Special Interest Rate of 2.9% on Personal Cheques and gain 4.0% from PCF

[dealers]

I got these special interest Rate 2.9% of personal cheques of charing them into the credit cards. I am just thinking. If I write these cheques and pay them 2.9% interests and since credit cards don't have to pay until next month.

I can then use these funds and deposit to PCF for 4% and then when it is due, I repay them in full. Then I can gain 1.1% of free money.

Am I getting this right here? Please advice.

[trusoulja2g]

Partly true.
Since the rate on the CC is 2.9% and PCF is 4%, yes, you are making 1.1%.

Couple things to keep in mind:
- the interest on the CC cheque starts accumulating from the day you use it, not from the end of the month.
- when you make payments on the CC, your payment gets applied FIRST to the balance transfer (i.e. the amount at 2.9%), and THEN to any purchases. So basically, you have to pay off the 2.9% portion before you can start paying off the regular ~19% portion. Which means you should not use that card for any more purchases until you pay off the 2.9% portion.

[dealers]

Partly true.
Since the rate on the CC is 2.9% and PCF is 4%, yes, you are making 1.1%.

Couple things to keep in mind:
- the interest on the CC cheque starts accumulating from the day you use it, not from the end of the month.
- when you make payments on the CC, your payment gets applied FIRST to the balance transfer (i.e. the amount at 2.9%), and THEN to any purchases. So basically, you have to pay off the 2.9% portion before you can start paying off the regular ~19% portion. Which means you should not use that card for any more purchases until you pay off the 2.9% portion.

(1) Yes, I understand that interest will charge 2.2% at the time I used these cheque, but I also gain 4.0% at the same time I deposit into PCF instead of not being there at all (by writing other cheques)

(2) Of course, at the balance due, I will pay them in full (including interests and all the portion)

Any more advices? Is that making any sense to anybody? Anybody tired them and it worked?

[kashirin]

what about taxes?
if you must pay at your marginal rate 35% that means you will have to pay 1.4% from those 4% and because you earned just 1% your ending balance will be negative

[napoleonz]

what about taxes?
if you must pay at your marginal rate 35% that means you will have to pay 1.4% from those 4% and because you earned just 1% your ending balance will be negative

good one.....correct? anyone?

[eliteblaze]

yes.. through yo ucan deduct interest from your profit if you can show you took a loan to make hte investment.

now the legalities of balance transfers being loans I duno

[dealers]

yes.. through yo ucan deduct interest from your profit if you can show you took a loan to make hte investment.

now the legalities of balance transfers being loans I duno


Okay, for all these work, I gain less than 1.1%, well, forget it, I ripped all the credit card personal cheques already. My money stays at PCF 4.0% for now....

[trusoulja2g]

You can deduct the interest on the CC, since you incurred it in order to invest.

So you should be paying tax on the 1.1% gain.

[dealers]

Today, I got 1.9%, that even better.....now I can store for 4% and gain 2.1% for free $$. I can gain about $13 in 4 months...for free!!

[Wylliecoyote]

Remember these cheques also charge a service fee of 1% (Min $7.50) when you use them.

[bluedcfive]

Remember these cheques also charge a service fee of 1% (Min $7.50) when you use them.

not in every case (eg Citibank)

[Bullseye]

Today, I got 1.9%, that even better.....now I can store for 4% and gain 2.1% for free $$. I can gain about $13 in 4 months...for free!!

Don't forget it's taxable income, though.

I got 0% for a year (sort of)o ffered by NBC last week.

[teebu]

you still have to make minimum payments every month. Make sure you actually have money to do that. Also, you're probably gonna end up paying some kind of balance transfer fee. So on the whole, it might not actually be worth it.

[dealers]

Remember these cheques also charge a service fee of 1% (Min $7.50) when you use them.

There is no transaction fee stated on the cheque.