Hi,
I was thinking there is reasonable potential to earn a little easy money, given all the credit card promotions about.
Say, for example, one signs up (& gets approved) for a number of the credit cards offering promotional rates of between 0% & 1.9%. Then draws down all funds available & lodges them to the best paying deposit account, for a period of just under 6 months (the time period normally on offer, for promotional rates from credit card providers).
In theory, one could earn a little between the rate they are borrowing at & the rate they are earning on their deposit account.
However, things to consider:
- Government Duty on each credit card. If it is still charged to a credit card account each April, then in theory you could open the account, use the cash for 6-months, then return the funds & close the account withouth having to pay the Government Levy.
- Management of funds. Obviously, good self control would be vital here, otherwise one might give into the temptation to spend some of the cash drawn from the credit cards, landing themselves in a lot of debt !
- Monthly Servicing. All credit card companies expect a minimum level of payment to be made each & every month. As such, you must be in a position to meet monthly repayments of between 3% & 5% depending on the credit card providers requirements.
- Effort Required. It would take some effort to structure the above correctly. Be prepared to spend a day or three doing your research, completing application forms etc.
- Credit Limits. Each credit card provider would need to give you a decent credit limit, in order to make the above exercise worthwhile.
Just some food for thought
Regards
G>