Credit card offers no interest for 1 year, can I depost the money, gain interest then pay off the card before?

Hi,
I get credit card offers where they offer 1 year no payment, no interest on balance transfer and purchases. If there is a way to convert a purchase into cash, can’t I just take the cash, put it in a saving account, gain some interest, then pay it back after 11 months and 29 day? Resulting in a net gain of the interest?

By | 2013-08-26T15:19:19+00:00 August 26th, 2013|Mortgages Home Loans Interest Rate|9 Comments

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9 Comments

  1. dooddie August 26, 2013 at 9:17 PM - Reply

    you can definitely find a way to get around this. But you can’t do it with cash advances or balance transfers. The Blue from American Express is actually offering 0% interest on purchases for 15 months! So if you can find a way to turn a purchase into cash and put that money in a high yield savings acct, you can earn interest for up to 15 months.

  2. Smilinez August 26, 2013 at 8:29 PM - Reply

    Yes you can but check with your credit card company for any fees (almost always) and for the end date of the promotion. Keep in mind that this can wind up costing you dearly for a mistake though. Missing the min payment for 1 hr on the due date can wipe out any gain you would have had and more. The amount of money you make is really not worth the risk.

  3. Terry S August 26, 2013 at 8:21 PM - Reply

    You can but here’s the catch.

    If you spend the money, then after the 11 months 29 days the rate goes to “CASH ADVANCE RATE”

    This rate is usually around 15-25%

    You must also make the “Minimum Payment” every month and if you miss a month then your rate goes to the “Default Rate” 25-30%

    The credit card company is betting you won’t have the entire balance paid once your 11 months and 29 days are up.

    P.S. It’s a basket of snakes! Some poisonous to your financial success. I would stay away.

  4. efflandt August 26, 2013 at 7:27 PM - Reply

    I have had multiple 0% offers, and some that limit the balance transfer fee to $75 max. But I have never had an offer that did not require payments.

    You likely would have to at least make required minimum payments, and might need to pay it back a month earlier than you think if you read and understand the fine print (“until the billing cycle that includes month X”, which actually starts at closing date soon after previous payment is due).

  5. jonny j August 26, 2013 at 6:46 PM - Reply

    This can be dangerous. Consider the transfer fee’s. Calculate whether you will actually make any money, savings accounts are offering very low rates (usually the fee’s are such that it won’t pay). Your credit card agreement states that your rate can be changed “for any reason”, one month’s interest could wipe out any savings account “gain”. Also, don’t pay it on the 29th day of the 12th month…If anything delays the payment (your fault, or theirs) you owe all the interest. I do this with home depot and Lowe’s when making major purchases and pay it off 30 days before the offer “expires”. This way if something goes wrong with the payment “posting” I have time to figure it out or make another payment.

  6. Z August 26, 2013 at 5:52 PM - Reply

    I believe the easiest way to do it is to find a friend who wants to buy something (expensive), charge it for them, collect cash and deposit it that way… i would make sure to find the best no-lose account though ex high yield savings , cd, etc….

  7. raysor August 26, 2013 at 5:16 PM - Reply

    It is possible because I know someone who has done it. Unfortunately there are not many credit card providers who will let you put your money in a bank account. Also you have to watch the arrangement fee.
    One way of doing it is to find a friendly retailer who gives cash back on credit cards. You might be able to get £100-200 a day (or over a period) from your 0% card and pay the minimum.You coild then deposit the cash. Would that work?

  8. effervescentevanescence August 26, 2013 at 4:19 PM - Reply

    No- Cash advances are subject to a different interest rate than purchases.

  9. c.arsenault August 26, 2013 at 3:23 PM - Reply

    Most cards have a clause that negates the interest free terms when taking a cash advance.

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