Only the people who have tried it are the ones that are truly able to give useful advice. Most seem to be successful – I have rarely ever heard of someone failing with credit card arbitrage, I only hear success stories. Yet, usually people tell us bad news, not good news!

On the other hand, as more and more people publicly brag about their credit card arbitrage, the more the companies will catch on. At one time, this credit card arbitrage was a secret schemed up in homes by geniuses.. now it is public information. Not so intelligent to publicly admit and brag about it!

I agree with your comment re: unsecured credit card debt is not the worst debt.

Dude,

Really enjoyed your yard sale comment. I acknowledge there is some degree of risk, but it’s very minimal. I’ve done this is in the past and have never had an issue.

“Why not invest 10-20% of it in a mutual fund, another 10-20% to your retirement fund and whatever is left to your savings fund?”
Yes, and you could also take it to Las Vegas in hope of tripling the money…
Dude covered it in the post. It is kind of obvious. You need the money within a year to repay everything. Who knows where the market will be in a year?

“and credit card is the worst debt anyway!”
I wouldn’t go that far. Maybe in terms of interest rate and also in terms of stupidity involved in buying more than one can afford. But if you look from the point of view of what can happen in case of default, other things would be more unpleasant. Personally, I’d put IRS at the top. Credit cards carry high rates, but it is an unsecured debt that can be discharged in bankrupcy. Not so with government. Also while mortgage may be considered “good debt”, if one takes more than what one can afford, one can lose a home.
Disclaimer: no personal experience with debt other than boring 30 year fixed mortgage that is paid off and a car loan on my very first new car paid off ages ago. But this is pretty much what I’ve heard.

I get an eBill through Bank of America from Citibank, so I’ll definitely pay on time. I also have notifications via Quicken, which I check daily, so I won’t miss those either.

This is the first arbitration where I’m sticking it in the bank. The last one (linked to in this article) was used to avoid paying interest on our car loan by paying it off early (then paying off the credit card before the special rate ended).

Why not invest 10-20% of it in a mutual fund, another 10-20% to your retirement fund and whatever is left to your savings fund?

I don’t know that it is bashing…it just doesn’t seem like the best use of the money in my opinion. One misstep and the risks outweigh the rewards.

Angie,

That makes complete sense. If you can swing the payments for 7 months and have the vehicle paid of at 0% interest you are far better off than “investing” the money. Talk about a calculated risk. I’d say the pros outweigh the cons on that one.