| Its All About the DetailsIn Part II of this | | | | to transfer credit card balances to that |
| article, we looked at some of the things that | | | | bank, you authorize it to forward the balance |
| people to need to watch out for in | | | | transfer check to the credit card company the |
| implementing this balance transfer arbitrage | | | | balance is being transferred from. The card |
| strategy. It wasn't the complete list, but it | | | | also offers up to 5% cash back on purchases |
| was enough to make it crystal clear that | | | | and has a 0% APR on purchases for the first 6 |
| careful attention has to be paid to the | | | | months of membership, but after that the |
| details - the fine print - in order to profit | | | | purchase APR rises significantly. Depending |
| from balance transfers. As I mentioned in | | | | upon your credit history the purchase APR, |
| Part I, the details are in the terms & | | | | which is a variable one, could range from |
| conditions of the offer. Today, we're going | | | | 13.24%, 15.24% or 18.24%.The Verdict is InIf |
| to examine the terms & conditions from an | | | | you've read Parts I & II of this article, you |
| actual balance transfer offer I received in | | | | know that the objective of the balance |
| the mail to determine if it is good enough to | | | | transfer arbitrage strategy is to make a |
| make some free money with if we accept the | | | | profit on the spread between what it costs |
| issuer's credit card. I recently received an | | | | you to borrow the money and the net interest |
| offer from American Express for its Blue Cash | | | | you pocket on the borrowed money after you |
| card, so we are going to take a look at the | | | | pay off the card balance. The greater the |
| terms & conditions for Blue Cash.Here's What | | | | spread, the greater the opportunity to make a |
| We're Looking ForHere are 4 things to know | | | | profit and the narrower the spread, the |
| when screening balance transfer offers for | | | | smaller the opportunity to make a profit. |
| this arbitrage strategy:(1) The APR for the | | | | Based upon its terms & conditions, the |
| balance transfer; | | | | American Express Blue Cash card offer is an |
| | | | extremely poor candidate for the arbitrage |
| (2) The transaction fee to transfer the | | | | game. For starters, the balance transfer APR |
| balance and the caps; | | | | of 4.99% makes our cost of funds too high to |
| | | | overcome. 0% APR is best. Second, the 6 month |
| (3) The annual fees; and | | | | time frame is too short. Look for a 12 to 15 |
| | | | month time frame. Lastly, by accepting the |
| (4) The length of time for the promotional | | | | offer, a cardholder authorizes American |
| interest rate.In reviewing at the terms & | | | | Express' bank to issue and forward the |
| conditions for the American Express Blue Cash | | | | balance transfer check to his or her old |
| card, I noticed the following:(a) There's a | | | | credit card issuer. This completely knocks |
| 4.99% APR for the life of the balance on | | | | out any chance of making money with this |
| balance transfer requests submitted with the | | | | strategy! The offer must permit a cardholder |
| credit card application - any subsequent | | | | to write a check to himself/herself, and must |
| | | | be able to do so without the check being |
| balance transfers will be subject to the | | | | treated as a cash advance. Oh well, its time |
| substantially higher, standard purchase APR; | | | | to google "balance transfer offers" because, |
| | | | I really don't want to sort through stacks of |
| (b) There's no balance transfer fee with the | | | | junk mail |
| offer, but subsequent balance transfers may | | | | again.======================================= |
| be subject to an unknown balance transfer | | | | ============================== All rights |
| fee; | | | | reserved. This article may be reprinted |
| | | | provided it remains as is and all links |
| (c) No annual fee; and | | | | remains intact.Ray Harris writes articles on |
| | | | credit, investments and personal finance. He |
| (d) The 4.99% APR is good for only 6 | | | | is the webmaster of a website that provides |
| months.A few other details: American Express | | | | information on a variety of credit card |
| has its own bank and by accepting their offer | | | | offers, including balance transfer offers. |