Schadenfreude

As the saying goes a penny saved is a penny earned.

Lately I've been more interested in making money with safe investments without the use of my own cash. But how can this be done? Well with interest rates being at historic lows, giant credit companies are offering generous credit lines with zero percent introduction rates.

Since becoming a home owner I have been bombarded by credit card offers. Being of excellent credit history, minimal debt and medium household income MBNA, AmExpress, Capital One and Citibank love to offer credit lines of $20K to $25K.

Often there are no fees for the first 12 months on these credit cards and little or no transaction fees but these need to be thoroughly research ahead of time. Platinum cards will offer the best rates.

The best situation for reducing your time and effort includes safe and liquid investments at high interest rates (3% or more like Emigrant-Direct.com) and an automatic bill payer such as your credit card linked to your high interest saving/checking account or an online bank (Netbank.com has excellent bill paying capabilities). Preferrably the bill payer has "repeating payments" so you set it up once and check on it in 11-12 months, just make sure your funding mechanism has the appropriate funds.

Credit cards usually require 2% minimum payment per month, so your payment for $25K starts at $500 and reduces each month. My MBNA account however only has a $15/month minimum payment. So you can keep your money in your high interest savings account longer!

If a small investment in time (say 2 hrs a year) results in $750 in investment income why shouldn't I invest the two hours? $25K * .0325 = $812/year. Now there will be mininum payments which will bring the total interest closer to $750 but still that's $350/hour.

Then in 10-11 months you can open a new account with one or two of the current credit card's companies competitors and request a new balance transfer (rinse and repeat as necessary). Note:If you request two balance transfers via the new credit card (one to pay off the balance and another to deposit into you checking account you may actually exceed your credit worthiness and you won't be able to take out more large credit lines credit cards until your credit balance returns to "acceptable levels". Capital One only gave me a credit line of $1000 once I exceeded my income credit worthiness. Still instead of $25K I had $50K at one time sitting in a savings bank earning over $140/month! All with other peoples money.

I wonder what the down side is to this operation? I've heard that opening credit cards, keeping them open and making regular payments helps your credit score. Cancelling your credit cards accounts and using the maximum credit limit will decrease your FICA score. Not sure if the one offsets the other but I'm sure that the extra thousands of dollars in my checking account will surely help me with my next major purchase.

Favorite online banks include: Netbank for their bill paying capabilities, E*Trade for their cash transfer capabilites and either ING Direct or Emigrant-Direct for their cash transferring capabilities with high interest all with no fees.

Favorite credit companies include American Express,MBNA and Cititbank.