Prior to 2008, there were people that would go on massive app sprees, churn the
sign up bonuses and use this type of interest rate arbitrage during the 0% APR
introductory period. Someone with a thick report suitable for getting 30-40 new cards and
multiple $100k's total CL could get $20K or more in a year from the combination of bonuses
and interest. The issuers responded by putting lifetime caps on sign up bonuses and
the interest rates on "safe" short term investments don't pay any more.
You could do this if you can consider your credit card relationship with Chase disposable.
You may or may not end up with open accounts at the end of the period when you pay it off.
Be very certain they receive your required minimum payments before the due date. You probably
won't be able to get best terms on any new apps during the maxed utilization.
I personally would not do it, especially not for only ~$30K invested. Can I ask what kind of investment
you're contemplating with a 5% return? Back before 2008 when people did this they were depositing
the money into CD's. CD's don't pay squat since 2008. I really wouldn't do this with any investment
that wasn't 100% sure of return of principle.
+
850 FICO8 since 2015, Thanks MyFICO - 5+ years since last HP
@Chris679 wrote:
OP I think some of these posts are WAY too paranoid about utilization. It is really only an issue if is is high for extended periods and you're only making minimum payment. If you go ahead with your plan just pay at least 10% each month not just make one huge payment at the end. Of course you run the risk of balance chasing by Chase but big deal what will you use a Slate card for after 0% is up anyway. If you don't have balances on other cards you will not look like you are in trouble. Don't walk on egg shells with your cards use them how you want.
I got the distinct impression OP is planning on minimum payments, or what amounts to the same thing: Pay $1,000 today, charge $999 tomorrow.
+1 to use your card how you want. You asked for advice, the decision is yours.
I don't get worried about utilization in the short term, but the timeframe proposed and combining BT with new charges to push $30k seems like it will get noticed.
@transufchik wrote:I was just approved for a 0% intro APR card (Chase Slate), and I can consolidate into it the credit I have on other cards from Chase, for a total credit limit of around $30K.
I don't necessarily have any debts that I need to cover, but I do have solid investment options that I'm quite sure could get me, let's say, 5% interest over the next 12 months.
The plan I'm considering right now is to make some (free) balance transfers to the Slate plus concentrate all upcoming purchases on it, so that I quickly reach very close to the credit limit, and then leave it on almost 100% CU for the entirety of the 0% intro APR period, for a gain of about $1,800 from the "free" loan, and then repay it in full.
I would obviously get a temporary hit to my credit score due to the high CU on the specific card, but my total CL across all cards is over twice that so I don't think it will plunge too deeply.
My concern is mainly - are there other factors I'm not taking into account here? E.g. would Chase potentially be alarmed by such a maneuver and reevaluate its relationship with me? Would it have a long term effect on my score and/or perception by credit analysts reviewing my future applications?
Thanks for any insights on this.
This just seems like a really bad idea. Its ok to carry the balance on a 0% APR, but I wouldn't max out the card and just let it sit there like that for a year. If you do go forward with this make sure you pay well above the minimum each month. For example if the minimum is $35 I like to pay $200 a month. At the very least pay double the minimum each month. Maxing out the card and making minimum payments each month for a year is going to rile chase up I think. You may not see any AA until you pay the card off and then they balance chase you down.
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