Using 12K credit card for a CD (Certificate of Deposit)

[FabulousDtheBruin]

ok so Discover gave me 12 months no interst on my 17K card acct.  I want to use the cash-over feature (since it is applied as purchase zero percent) APR to open a 12-month 1.20% CD for 12,000.  I want to buy a car a new car in 3 years.  Will this look bad that I carried a balance of 12K for 12 months?  The pay-out amount after 12 months maturity is $144.  I see it as easy free money.  But I'm worried this will look bad on my report.  I have 210K available credit. 

[14Fiesta]

I have some bad news, the cashover feature is limited to pulling out $120 per day, so it would take 100 days in your case to get the money for the CD saved up.

[FabulousDtheBruin]

Hi fiesta, I have two discover cards so I can get the 12k in 50 days. And I would have until May 20th 2016 until interest rate of 0 elapsed

So it can work out

[mitchblue]

Seems like there's an easier way to make $144 in a year..

[pipeguy]

I suspect that if you pull Max-cash out of both of your Discover cards for day after day after day, you are going to get some push back from Discover.

[Anonymous]

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@FabulousDtheBruin wrote:

ok so Discover gave me 12 months no interst on my 17K card acct.  I want to use the cash-over feature (since it is applied as purchase zero percent) APR to open a 12-month 1.20% CD for 12,000.  I want to buy a car a new car in 3 years.  Will this look bad that I carried a balance of 12K for 12 months?  The pay-out amount after 12 months maturity is $144.  I see it as easy free money.  But I'm worried this will look bad on my report.  I have 210K available credit. 

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Why would you go through all that trouble for $144 if you have that much in available credit?There are other cards that can get you that money in a few months by grocery shopping etc..

[psm]

It seems like going over 10% util on your Discover will look bad from a FICO score perspective. Also, I can't imagine Discover will be super happy with seeing you pulling extra cash every day. If I were your lender I would be worried you were in some trouble and in desperate need of cash. 

[takeshi74]

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@FabulousDtheBruin wrote:

ok so Discover gave me 12 months no interst on my 17K card acct.  I want to use the cash-over feature (since it is applied as purchase zero percent) APR to open a 12-month 1.20% CD for 12,000.  I want to buy a car a new car in 3 years.  Will this look bad that I carried a balance of 12K for 12 months?

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Do the math.  12K/17K is 71% which is very high.  Be careful leaving it that high for a year.  General advice is do not exceed 30%.  Short term high utilization generally isn't an issue but prolonged high utilization can lead to AA.

[TrulyyBlessed]

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@FabulousDtheBruin wrote:

ok so Discover gave me 12 months no interst on my 17K card acct.  I want to use the cash-over feature (since it is applied as purchase zero percent) APR to open a 12-month 1.20% CD for 12,000.  I want to buy a car a new car in 3 years.  Will this look bad that I carried a balance of 12K for 12 months?  The pay-out amount after 12 months maturity is $144.  I see it as easy free money.  But I'm worried this will look bad on my report.  I have 210K available credit. 

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$144 is definitely not worth having 71% Utilization on a card for 12 months.  I'm sure there are promos out there that offer "free easy money" that will be less damaging to your credit history and relationship with Discover. 

[TheGardner]

There are plenty of sign up bonuses higher than the prospective $144. Honestly I wouldn't concider it worth the effort. People do MS for much higher rewards (I don't do this either just seems like a lot of work).