Tough Times Ahead For Credit Arbitrage?
Filed Under (Credit Cards Blog) by creditblogger on 25-10-2008
Credit card arbitrage is something that many folks know about and most don’t dare to actually do it. The truth is you can make about $2000 or more a year simply by borrowing from your credit cards and reinvest them in high yield saving accounts, money market, or even stock market.
But credit card companies have never actually liked the approach as it decreases the possibility of them making money from you. The truth is, credit card issuers are there to make a profit. They complicate things for you so you slip up and they can raise your rates and charge you all kinds of fees. But if you are responsible enough to take good care of your credit, then you shouldn’t have trouble with credit companies.
Credit card arbitrage masters have sophisticated software packages and tools to help them stay on track with their monthly payments and everything else. But you can’t create arbitrage if you do not have the funds. That’s what has been happening lately. Some companies are limiting the credit line they are offering to folks, and a few have started raising interest rates out of nowhere.
It also doesn’t help that credit companies are out to stop credit arbitrage. These guys are using sophisticated analysis tools to figure out who may be using cards for arbitrage. I have actually heard folks having their cards canceled for the crime of credit arbitrage (that could hurt your credit too if the creditor closes your account).
Is credit arbitrage dead? Far from it. In fact, the best time to do it is now but not everyone gets to do it these days. You’ve got to have excellent credit and also a great tracking method to stay on the top of your debt. It’s going to be harder, but not impossible.
