Psst, I'm gonna let you in on a little known secret. Promise not to tell anyone? And do you promise to be responsible with your credit? Promise?

Ok, I don't think many people know of this hack. You get a credit card with 0% interest on the balance for, say 15 months. You make your small and large purchase(s) and let the balance roll over each month. Meanwhile, you take the balance that you would have paid and purchase US short term Treasuries, now at about 5%.

At the end of the 15 months you must pay off the entire balance. You will also accrue interest from the short term Treasuries which can be used to help pay off the balance as they come due.
In short, you are investing the credit card balance and earning interest.

Note: Make sure you understand all the details before you try this. If you screw this up you have only yourself to blame. You must be disciplined. If you have a low credit score, don't try this.

[www.forbes.com]

But where does the money come from to pay off the balance in 14.5 months?

Edited 2 time(s). Last edit at 02/02/2024 03:59AM by Rho*.

The intent would be to buy Treasury bonds which mature just before the credit card bill is due. The Treasury bond matures, you get the money, you pay the bill. Do not buy a Treasury Bond fund since the value of the fund may decline. You need to buy bonds and hold them to maturity. If this explanation makes no sense to you, then I suggest that you stay clear of the suggestion that the OP made.

@Rho* wrote:

But where does the money come from to pay of the balance in 14.5 months?

How do let the entire balance roll over into the next month? Seems that you'd have to pay them something, a minimum monthly payment, otherwise they cancel the card and report your non pay to the credit bureaus.

@myst4au wrote:

The intent would be to buy Treasury bonds which mature just before the credit card bill is due. The Treasury bond matures, you get the money, you pay the bill. Do not buy a Treasury Bond fund since the value of the fund may decline. You need to buy bonds and hold them to maturity. If this explanation makes no sense to you, then I suggest that you stay clear of the suggestion that the OP made.

@Rho* wrote:

But where does the money come from to pay of the balance in 14.5 months?

Ah, myst4au appears financially astute here...I'm impressed. I'm gonna go out on a limb here and say you likely don't have any debt issues in your household. Well done!

@Rho* wrote:

But where does the money come from to pay off the balance in 14.5 months?

Come on! You weren't paying attention. Were you talking to your neighbor in the back of the class again? Instead of making a monthly credit card payment, the card promotion allows you to defer for 15 mos. During that time you were buying US Short Term Treasuries which are now paying 5 to 5 1/2 % interest if held to maturity. At the end of the promotion period you have to pay off ALL the balance to make it cash flow positive.

@Susan L. wrote:

How do let the entire balance roll over into the next month? Seems that you'd have to pay them something, a minimum monthly payment, otherwise they cancel the card and report your non pay to the credit bureaus.

I'm gonna guess you have a debit card because you have had difficulty paying off credit card balances every single month. Am I right? I'll bet I am...

The credit cards are banking on the fact that most individuals aren't going to be able to cover the balance that's due at the end of the period. Those people will have major financial penalties. I always pay off my credit card bills at the end of the month, and haven't tried this long term zero interest deferral. I would be paranoid about missing some fine print and be charged $$$$. Props to you for taking advantage of the deal though!

High yield savings accounts (such as CIT Bank) are also paying close to 5%, so that could be another option to park the money. Carrying a large balance would increase your credit utilization rate, which could temporarily lower your credit score. Something to keep in mind if you'll need a great score for an upcoming car or home purchase.

All, please take the time to educate yourselves on things like this. You must be organized to pull off "churning" bank and CC bonuses. I am sure many here that are armed with their mystery shopping excel sheets could do it.

You should also review what is best for your overall financial status. Some gov't bonds might be free of state taxes, for example, and there might be a maximum amount you can buy of certain bonds (such as I-bonds). In some cases, if you do not have add'l emergency money and need to cash out a bond before it matures, you may forfeit some interest.

That said, I have never seen an offer that allows you to defer the payments. The credit card companies will require a minimum payment per month. This was part of an overhaul during the Obama administration to show customers the minimum payments, how long it would take to pay by making only minimums, and total interest paid etc that must be disclosed to consumers.

The INTEREST is deferred, the PAYMENTS are not.

From the article that was linked, please double read the last sentence.

Credit card issuers offering 0% introductory APR promotions allow consumers an opportunity to use credit cards as interest-free, short-term loans for purchases, balance transfers or both. But these offers come with risks: if a balance is unpaid by the end of the period, interest can accrue rapidly. Credit cards come with notoriously high interest rates, so be extremely disciplined about paying enough each month to zero out your debt within the no-interest period. And know that if you miss a payment or pay late, you risk losing the intro rate entirely.

I have some:

PenFed Pathfinder card. It’s a no annual fee card as long as you become a member.
- $0 annual fee
- full reimbursement for Global Entry or Pre-TSA every 4 years
- $100 annual travel credit. I usually just buy a Walmart, or other retail gift card through Mileage Plus X through United Airlines once a year.
- Comes with Priority Pass Select.

Certain credit cards waive a very small balance.
- Wells Fargo waives off $2 if your balances doesn’t exceed that. I have 4 x WF cards, so that’s $8 a month I just reload my Amazon account.
- Capital One and Barclays waive off $1. I have 3 total cards between them. So an additional $3 a month.
In total, that’s a minimum $132 a year of free money with minutes of maintenance a month.

Great idea.....I am very careful when choosing new cards....I do my spend for free travel and so the banks limit new cards for this reason...Example: Chase only allows 5 new cards every 2 years. Business cards excepted.