Making money with VISA Secrets - Interest-free Loan
My buddy Roger needed a used car for work. He scanned Craigslist daily and finally found just what he needed; a used stick shift diesel Chrysler mini-van with 120000 miles for $2000. He went to his bank and tried to get a line of credit. Could they do an interest-free loan?
Banks don't give interest free loans in this universe. Bankers earn their Cadillacs by charging as much interest as competitively possible. 12%, 18% compounded over years means a juicy revenue stream to Mr. Banker.
Roger knew he could pay the $2000 off quickly because he had a lot of overtime coming up at the swing-bridge where he worked.
Here's what he did. Credit card companies are always trying to poach customers from other credit card companies - a common tactic is to offer a 6 month interest-free grace period on balance transfers.
Roger signed up and got approved for a new credit card with President's Choice Finance. PC Finance offers a 6 month interest-free grace period on balance transfers. He took a cash advance for $2000 on his first credit card and immediately transferred that amount to his new PC credit card.
He now had $2000 interest free for 6 months. Plus he could pay the amount off at any time without any penalties during the next 6 months..
Could you use a few thousand dollars interest-free for investment or work expenses then maybe you can use the same strategy. Just be sure that you can pay the full loan back in 6 months.
Pros and cons of this strategy:
On the plus side, you get an interest-free loan that you can pay back at anytime within the 6 month grace period. On the negative side, be absolutely sure that you will have the money to pay the loan back before the grace term expires and the high interest payments kick in. For example - are you scheduled to get a large income tax refund, overtime or have sales commissions coming due.