What is the most profitable 25-day investment I can make that guarantees that I at least get the principal back? Notes:

  • Many brokers accept credit card deposits w/ no fees, and the credit card company counts it as a purchase, so I have a 25-day grace period with no interest.

  • So, I can invest using my credit card, pull back the money within 25 days, and show a profit. I can then repeat the process monthly. I have 100K total spending limit, so the profit might be nontrivial.

  • I know Treasury notes/bills/strips (whichever ones expire in ~25 days) and money market funds are two options, but are there any more profitable ones?

  • I'm OK w/ the profit being variable (even zero), but need to preserve the principal to pay back my credit card.

  • What I'd like to know is what the profit and amount of effort work out to be
    – Casebash
    Feb 27, 2011 at 10:05
  • Assuming a 1.5% annual interest rate and 100K total in available debt, about $125/month. Some cards pay 1% on all transactions, bringing this up to $1125/month. If you reinvest everything, maybe more.
    – user1731
    Feb 27, 2011 at 14:39
  • 1
    I really don't understand why any broker would accept a CC deposit without a fee - given that they get charged a percentage, they're taking an immediate cash hit by doing so. May 26, 2011 at 12:26
  • As a note, forex.com accepts credit cards (w/o fee) AND pays me 3% on unused margin (including cc deposits). I had to negotiate this, but FOREX brokers seem to be desperate for customers beyond all reason. I even get a decent pip spread (though I bet that's where they make their money) and institutional rollovers (which means they still make a little money there, but very little).
    – user1731
    May 26, 2011 at 12:38

3 Answers 3


For this scheme to work, you would require an investment with no chance of a loss. Money market accounts and short-term t-bills are about your only options.

The other thing is that you will need to be very careful to never miss the payment date. One month's late charges will probably wipe out a few months' profit.

The only other caveat, which I'm sure you've considered, is that having your credit maxed out will hurt your credit score.

  • 2
    Well said! Also, if you wait one day past the grace period (say 26 days) to pay, you pay interest for the entire 26 days. Having credit cards maxed out does hurt my credit score, but, when I need credit, I can just pay them all back. Also, each month I do this, I'm building a "pays on time" gain to my credit score.
    – user1731
    Feb 13, 2011 at 19:01

A lot of these schemes fail to take into account the time/effort you have to spend in order to extract the small amount of profit you would get. If there were easy money to be made, people would start making it and the company that was allowing themselves to be swindled would put an end to that deal. So these things usually don't last.

You used to be able to order dollar coins from the mint via credit card, with no shipping. This was risk free and allowed you to earn credit card points. But the mint has effectively plugged this hole.

  • Not that it matters but it was dollar coins not gold coins.
    – stoj
    Feb 13, 2011 at 23:26
  • Actually, it looks like you can still do this.
    – user1731
    Feb 14, 2011 at 0:49
  • Yes you can still do it but you are now limited to $500 of each president or something silly. There didn't used to be a limit and you could make a fair bit of money off of this scheme...
    – stoj
    Feb 16, 2011 at 22:31
  • Actually, I used to do this, and you could order as many as you wanted, but a day or two later they'd send you an email canceling portions of your order.
    – user1731
    Feb 27, 2011 at 14:40

Although this scheme is likely to get shut down rather quickly by either your broker or credit card company some points you seem to have missed out on.

Properly timed you should be able to get ~55 days of grace period (30 day billing cycle + 25 day grace period) assuming you pay everything off every month and charge immediately following the statement date.

You will need to avoid certain card issuers that code all transactions with financial institutions as cash advances (Citibank in paticular). If it is possible it would be in your best interest to lower cash advance limits to 0 to avoid any chance of cash advance fees. If your credit card attempts to process it as a cash advance the transaction will just be declined and you won't be out anything. Otherwise one cash advance fee will eat several months worth of profits.

As far as investments with guaranteed principal goes the only thing you can realistically do is money market accounts and maybe treasury notes. Anything else and the short term price fluctuation may leave you high and dry.

If this scheme were to work you would be much better off attempting to get rewards for the purchases than anything you could invest in. If you used a 2% card and churned it every month you would be looking at a 24% return on credit card rewards. Even 1% rewards gives you a 12% annual return which is going to beat anything you could invest the money in.

  • tell me more about "Properly timed you should be able to get ~55 days of grace period". I've heard other people say this is possible, too, but I can't figure out how to do it. Could you provide an example?
    – user1731
    Feb 16, 2011 at 14:27
  • 1
    Yeah if you don't carry a balance and you make a purchase the day after your statement closes you will get until the due date on your next statement without having to pay interest. The key being you have to pay the full statement balance the month before you do this otherwise interest accrues through out the month.
    – stoj
    Feb 16, 2011 at 22:30
  • Actually, I'm doing this (w/ a FOREX account, not risk-free), and Citibank treats those as purchases, not a cash advance.
    – user1731
    Feb 27, 2011 at 14:40

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy