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# Can you make money in the balance transfer game?

I did it. After talking to Scott Bilker, creator of Debtsmart.com, I just had to try a balance transfer to take advantage of a zero percent APR offer I had received recently.

You see, I had a \$3,000 balance on my credit card and an unforeseen cash-flow problem. And Travelocity came to the rescue with an offer I couldn't refuse: nine months interest free on that balance. Of course, I remembered Scott's advice: "You have to be cautious that you do the math, so that you actually save money when you do the balance transfer."

First, do the math
In my case, that meant taking into account the 3 percent balance transfer fee with a maximum fee of \$50. I did a rough calculation. I hoped to transfer the entire balance: \$3,000 x 3 percent = \$90, thus I'd pay the maximum fee of \$50 on the transfer. I figured it would take at least two or three months to recover from my cash-flow problem: \$3,000 x 18 percent (the rate on my current card) = \$540/12 = \$45 x 3 months = \$135, which was \$85 more than the cost of the transfer.

That seemed like a no-brainer, so I called Travelocity. As it turned out, they gave me a \$3,000 credit line -- on the spot-- but allowed a balance transfer of only \$2,400. Even though my savings was reduced from \$85 to \$58, the math still made sense. So now I have a new credit card. (By the way, the whole process took less than 10 minutes, and I only had to endure two sales pitches for various card services.)

And guess what? While doing the transfer, I noticed that my original card had a zero percent balance transfer offer as well. Nine months from now, I'll be taking advantage of that offer, assuming it's still there. If I keep that up, someday I'll be able to brag like Bilker. "I feel like I'm getting even with the banks for all the years when they got me," he says. "There was plenty of time when I was paying 19.8 percent back when I had my first credit card. Now I'm actually going to break even."

Convenience checks for investment
Actually, Bilker will have bragging rights for quite a while based on one of his balance transfer deals. Sometimes these transfer offers come with blank convenience checks so you can simply write a check to pay off one card, effectively transferring the balance to the card that issued the checks. Bilker claims he has about 80 cards, and one day four of them issued him convenience checks in conjunction with separate zero percent APR offers. Instead of transferring a balance with the checks, he deposited them in an ING money market account -- to the tune of \$62,000 -- for one year.

Do the math: He pays no interest on the card balances, he's paid interest on the money market account, little or no transfer fees, and some work to keep track of things, make the monthly payments, and ultimately pay back the loans. "I made \$1,800 in interest in a year by doing that," Bilker says. "Even if it took 10 hours to track all that stuff, that's still \$180 an hour. That's a great-paying job."

Next: "Banks are always trolling for new cardholders. ..."
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