Retiring Early

Friday, June 08, 2007

Another way CC arbitrage hurts you

I always knew credit scores figured into how much you pay for insurance, but I never mentally put these two together. The fact is, 0% balance transfer and credit card arbitrage schemes wind up costing you money on your insurance premiums because premiums are more expensive when your credit score is lower. ...And clearly, having $100,000 on the books as a 0% loan is going to lower your credit score. So how much more will you pay for insurance? Looks like we'll never know.

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4 Comments:

  • At 6/09/2007 7:11 PM, Blogger Steve said…

    Can't be costing me more than the 20K I make a year from CC arbitrage.

     
  • At 6/09/2007 10:59 PM, Blogger StealthBucks said…

    That would assume a float of $400,00o on risk free arbitrage. In short, I think this comment is full of crap. Unless Steve truly floated $400k there is further risk than simple and stupid cc arbitrage going on.

    Comments like this simply reinforce my belief that Forest's mom was correct. "Stupid is as Stupid does." Good luck to you, Steve.... Don't mess up the risk you clearly do not comprehend.

     
  • At 6/10/2007 5:50 AM, Blogger fin_indie said…

    Well put Stealth. Couldn't have said it better myself.

     
  • At 6/14/2007 5:45 PM, Blogger Sheel said…

    Good point fin_idle and stealthbucks. I calculated that based on my credit limit around $100,000, I can make only $5000 a year excluding ot financial fees, which is not worth the by amount of time I will have to spend on flipping the debt around. Moreover, there is a potential of making an error which can cost you more than you make - CC company can charge you really hefty interest, if you fail to pay the debt within the 0% term.

     

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