Finance Travels

In June of last year, I decided that I was going to experiment with earning interest off of a 0% credit card promotional rate. Ideally, I would have liked to have found an offer where I could write a credit check to myself, cash it, and then just let that balance sit in a high-yield savings account for the full year. Unfortunately, I couldn’t find an offer that didn’t tack 3+% off of fees for the total amount cashed, so this didn’t work out.

Rather, I opened a 0% for one year credit card with Chase.  I used that card solely for daily purchases until I came to within about $1,000 of the card’s credit limit.  It took me about 5 months to reach this level, all the while paying just the monthly minimums when I received statements.

The money that I traditionally would use to pay these purchases was deposited into EmigrantDirect.com’s high yielding savings account.  Unfortunately, high yielding wasn’t so high once the Fed starting cutting rates last fall, so I didn’t make out quite as well as I would have hoped.

I’m going to pay off the card in full this month (Yes, I know I have another month to work with, but I’m playing on the side of caution here).

During this time period, the interest paid on my EmigrantDirect account was about $325.  I’m estimating that about 66% of that is from this scheme.  Therefore, I figure I’ve made about  $214 (before taxes) on this plan

All in all, it was pretty easy money.  I was able to keep up on the status of the accounts via Quicken, and I was very careful about making sure the payments were made, etc…  Once simple screw up could end up costing me money.

That being said, I don’t think I’m going to do this plan again unless rates get back up to 4.25%+.  The 2.75% that Emigrant’s offering now isn’t enough to entice me back into the game.

April was an overall good month, although I have to admit that the 5.13% jump that I’m showing here is a bit misleading.  Close to half of the net worth increase came as a result of adding the cash value of my wife’s and mine term life insurance to the equation.  I’ve never reported it in the past, but since I received the yearly statement this month, and the fact that it does have a cash value made me change my mind.

In other news, our investments have had their first positive month in quite a while.  I’m not happy with holding close to $10,000 in credit card debt, but that number will be reduced greatly next month as the first of my 0% for one year offer expires.  I’m hopefully going to write an entry on that experience soon.

May will present us with our $2,100 tax rebate, along with some significant cash outflow from the large credit card payment due as well as some serious home improvement projects that we’ve been planning.