A lot of credit cards these days give you an interest free period, say 24 months. They also allow you to transfer debt for a small fee, let's say 4%. This means if you keep the moving the debt around, you can consistently hover at around 2% p.a. as long as you're careful. This is weird, because assuming the share market grows, on average, by a lot more than 2% p.a., this basically means you can get free money.
For example, you could set up a business and organise it to accept CC payments. Then you borrow a largish sum of money with personal credit cards at 0% interest for 24 month. To get the money to your business, your purchase something overpriced from that business (maybe the business sells art, for example).
Now that your business has all that money, this money can be used to invest in the share-market. The business can diversify to limit risk, or perhaps invest in an index fund instead. Or, if you feel that's still too risky, maybe the business just keeps the money in a term deposit. In any event, you can do something to make money. And as you approach the end of the first 24 month-interval, you can move all your personal debt to some other cards for a mere 4% fee. Wash, rinse and repeat.
In the long run, you should end up with a personal debt that's considerably less than the total assets of the business. So basically, free money.
Question. Is this method of getting free money viable and consistent with law?
If so, why does the financial system have this silly loophole?
If not, what kinds of laws or catch-22's prevent this kind of thing?