Can you use a credit card to invest or buy CD ?

[robbase]

I have been getting zero interest credit card offers, but no checks like I used too (wayyy back). Is there a way to "purchase" a CD or invest in a mutual fund with a straight credit card transaction? (of course I will cash out and pay off the balance when the 0% rate expires- I probably won't do the investing thing since it would be short term, but just curious)

[schildi]

Apr 2, 2011 10:26:50 GMT -5 @toughtimes said:

Stay away. You will wind up paying 40% to get 1%. Banks are not morons. They have all the money for good reason.

That's not necessarily true, I have done this for years, and it has worked fine. I made thousands in interest.
But I agree: with today's rates (1%?) it may not be worth it. Also, all 0% offers I have seen lately came with a 3% or bigger transaction fee, killing the deal right away.
It was good in the good old days when ING paid 5%, and I got 18 months 0% and no fee. We used to have > $60K in CC debt, lol.

[dancinmama]

I played this game too when there were no transfer fees. There was a time when I had over $100K in credit card debt at 0%.

I have gotten 0% offers, but they all have come with transfer fees of about 3% so it's no longer profitable.

[Savoir Faire-Demogague in NJ]

Yeah, the 0% CC offers have come back with vengeance, but they carry 4/5% trans fees.
I like the other poster made a lot of money on the 0%, 0 trans fee offers a few years ago. Interest rates on CDs were higher than they are now though.

[schildi]

Apr 2, 2011 10:33:26 GMT -5 dancinmama said:

I played this game too when there were no transfer fees. There was a time when I had over $100K in credit card debt at 0%.

I have gotten 0% offers, but they all have come with transfer fees of about 3% so it's no longer profitable.

Wow, you were even worse than us. And I thought we were bad, lol.

[The J]

Apr 2, 2011 10:26:50 GMT -5 @toughtimes said:

Stay away. You will wind up paying 40% to get 1%. Banks are not morons. They have all the money for good reason.

Banks have the money because most people are stupid. That doesn't mean that everyone is.

[Deleted]

banks have money because people are stupid? Where am I, market talk?

[Tiny]

Yeah, you need to watch the Fee (3 to 5%) on the balance transfer AND the fact that it doesn't have a cap.... So, 10K with a 3% fee would cost you $300.00. Not sure where you could put 10K and get a gaurenteed return of more than $300 within the terms of the current offers (6mo, 12mo, 18mo).
I used 0%, no fee offers to finance many of the big ticket fix ups my house needed... I think over the course of several years I borrowed 26K or so... 18K of that was used and repaid interest free...
I did use a 0%, 3% fee with a cap of $50.00 at the very end of the "balance transfer hey day" - I transfered some higher interest debt (a HELOC) to the offer - I figured for $50 - letting 8K sit at 0% for 12 months wasn't such a bad deal -- while I worked on the higher interest amount remaining on the HELOC.
That said... if you have a high interest debt the current offers might be worthwhile... to make money on them, not so much.

[Tiny]

To answer the question about using a credit card to buy a CD or transfer money to a brokerage account... don't think there's anyway to do that outright. The transaction is probably handled by teh CC as a cash advance or a balance transfer.
You might be able to do something creative if your Credit Card has terms where NEW purchases are at 0% for X amount of time or until some deadline. If you have 1K worth of expense you normally charge, I guess you could stop paying your balance in full (make a minimum payment) and put the remaining 950 into something that's earning interest. You'd do that every month for a while. Eventually you'd have to pull out all your saved money and pay off the card though. With interest rates so low and CC charging higher 'regular interest' after the deal ends - it seems like alot of work and alot of risk for very little income.

[dancinmama]

Apr 2, 2011 10:37:47 GMT -5 schildi said:

Apr 2, 2011 10:33:26 GMT -5 dancinmama said:

I played this game too when there were no transfer fees. There was a time when I had over $100K in credit card debt at 0%.

I have gotten 0% offers, but they all have come with transfer fees of about 3% so it's no longer profitable.

Wow, you were even worse than us. And I thought we were bad, lol.

What can I say? Everyone was begging me to take their money.....so I did. ;D

[phil5185]

I did this in 2003 & 04 before the BT fees. Borrowed $15k, put it in Spyders, grew it to about $22k. The 'zero' cc companies kept their side of the bargain, I paid absolutely no interest or fees.

[resolution]

I haven't done this since the 0% with no transaction fees stopped, but I used to use my home equity line of credit to get the money. I would tell the credit card company that I wanted to balance transfer my home equity line, so they would send the money to my credit union home equity line of credit. Then the credit union would get the money and call me (since i had no balance on the line of credit) and I would tell them to just stick the money into savings. At that point the credit card was happy to take the "balance transfer" and the cash was sitting in my account ready to send to an investment.

[commentator]

Apr 2, 2011 15:21:48 GMT -5 resolution said:

I haven't done this since the 0% with no transaction fees stopped, but I used to use my home equity line of credit to get the money. I would tell the credit card company that I wanted to balance transfer my home equity line, so they would send the money to my credit union home equity line of credit. Then the credit union would get the money and call me (since i had no balance on the line of credit) and I would tell them to just stick the money into savings. At that point the credit card was happy to take the "balance transfer" and the cash was sitting in my account ready to send to an investment.

So you committed fraud.

[schildi]

Apr 2, 2011 15:48:23 GMT -5 @commentator said:

Apr 2, 2011 15:21:48 GMT -5 resolution said:

I haven't done this since the 0% with no transaction fees stopped, but I used to use my home equity line of credit to get the money. I would tell the credit card company that I wanted to balance transfer my home equity line, so they would send the money to my credit union home equity line of credit. Then the credit union would get the money and call me (since i had no balance on the line of credit) and I would tell them to just stick the money into savings. At that point the credit card was happy to take the "balance transfer" and the cash was sitting in my account ready to send to an investment.

So you committed fraud.

Not that I have done this (I always just cashed a check they gave me), but how is this fraud?

[commentator]

Generally, lying to get someone to enter into a business transaction with you is fraud. Now maybe the other party in your hypothetical example isn't damaged by your fraudulent behavior but if they are (say you go bankrupt and can't pay them off) then maybe you're butt is in a sling. (I'm fairly confident that bankruptcy doesn't get one out from under a debt obtained fraudulently.)

[schildi]

Apr 2, 2011 22:10:58 GMT -5 @commentator said:

Generally, lying to get someone to enter into a business transaction with you is fraud. Now maybe the other party in your hypothetical example isn't damaged by your fraudulent behavior but if they are (say you go bankrupt and can't pay them off) then maybe you're butt is in a sling. (I'm fairly confident that bankruptcy doesn't get one out from under a debt obtained fraudulently.)

I don't think kari lied. At least not if she said what she said she said in her post. She said "balance transfer her home equity line", and that's exactly what she did. The balance transfer resulted in a negative balance, so what?

[commentator]

Apr 3, 2011 0:49:40 GMT -5 schildi said:

I don't think kari lied. At least not if she said what she said she said in her post. She said "balance transfer her home equity line", and that's exactly what she did. The balance transfer resulted in a negative balance, so what?

A balance transfer of a specific requested amount is clearly a claim that a balance owed of at least that amount exists in the HELOC. If you want to quibble over whether her dishonesty was technically a lie or not, find someone else to argue with.

[schildi]

Apr 3, 2011 22:44:42 GMT -5 @commentator said:

Apr 3, 2011 0:49:40 GMT -5 schildi said:

I don't think kari lied. At least not if she said what she said she said in her post. She said "balance transfer her home equity line", and that's exactly what she did. The balance transfer resulted in a negative balance, so what?

A balance transfer of a specific requested amount is clearly a claim that a balance owed of at least that amount exists in the HELOC. If you want to quibble over whether her dishonesty was technically a lie or not, find someone else to argue with.

LOL, I disagree. I just don't think she lied, and she definitely did not commit fraud imo, as you called it. she just used the banks offer to her advantage, good for her!

[commentator]

It depends, of course, on the specific terms of her contract with the new credit card company. Using only the facts she provided, however, she was dishonest with that credit card company.

[resolution]

I simply told the company to transfer to the credit union line of credit, which they did. The fact that it resulted in a positive balance was not relevant to the credit card company.

[Clever Username]

Due dilligence on the part of the lender would be that if they were concerned if there was a balance on this account or not, they would have checked. Or asked.

[commentator]

Very good, Clever. You're position seems to be, if a party to a contract lies and the other party doesn't catch them, then the telling of that lie is ok.

[resolution]

There was no lies involved in the transaction. I was planning to withdraw the money from my line of credit before they sent the money so it would transact ok. I called up the credit card before I applied to get an idea of how long it would take to send the money so I wouldn't pay avoidable interest on the line of credit. They told me it didn't matter and as long as the credit union would accept the money, they just needed a vaild account number to send the money to. The balance was irrelevant, it was just a way to send the credit. They ended up approving me over the phone while we talked so there was no need to send in any forms.

There is no difference between me not owing money on my line of credit from the other people not owing money and failing to use their balance transfer checks to pay off debt. The only difference is that I got the payment electronically instead of waiting for a paper check and driving to the bank. I am not sure why you are making an issue of this when the credit card company was eager to loan me money and has reported it paid as agreed for all these years. If I had withdrawn the cash from the line of credit the day before so there was a debt to repay would that have been better for you?