Are the common credit card arbitrage schemes still viable? (investing during the grace period or during a zero percentage balance transfer period)

Haven't the credit card companies figured this out and changed their policies yet?

  • A recent way of taking advantage of credit cards' reward programs is churning. Using credit card to pay common expenses, paying it off at the end of the month and harvesting the cash back rewards. Short term investing usually can't beat the transfer fees.
    – Xalorous
    Commented Aug 19, 2016 at 19:05
  • @Xalarous : I think that Peter's answer is based on 0% spending deal and not on a 0% balance transfer, which requires shifting debts. Also, I recall that even while shifting debts the charge is some percentage of the transferred debt, but this is the new debt we are arbitraging-with.
    – Mike
    Commented Aug 19, 2016 at 19:15
  • 1
    Churning is spending the least amount of money to get the initial Rewards bonus, then applying for another rewards card, and then another and another and another.
    – RonJohn
    Commented May 22, 2017 at 21:00

4 Answers 4


Here in the UK it's certainly possible. We call it stoozing.

The basic steps are

  1. Get a credit card with a long 0% period for purchases and a savings account with as high a rate as possible.
  2. Do your regular shopping on the credit card, make minimum payments each month
  3. Put the money you would normally spend on your regular shopping into the high rate savings account instead.
  4. At the end of the 0% period either pay the card off in full or get a suitable card and do a balance transfer.
  5. Get a new spending card (may be the same one as the balance transfer card but you often get better deals with seperate cards).


I guess people get away with this because the number of people with the skills/diligance to do it right and who can be bothered with the hassle is fairly small.

  • I was wondering if you could move this a notch up. Like what if you get a 'shell' shop which accepts credit card payments and you kinda get the cash directly to invest. This, would let you invest much more money.
    – Mike
    Commented Aug 19, 2016 at 18:54
  • 6
    You would get hit with the merchant fees though doing that. Commented Aug 19, 2016 at 18:58
  • Yes, you're correct. Also, in another scenario what if the broker accepts credit card deposits. I could find one similar query : money.stackexchange.com/questions/6279/…
    – Mike
    Commented Aug 19, 2016 at 19:19
  • But the returns on CDs and "high rate" savings accounts is soooooo low that the effort isn't working.
    – RonJohn
    Commented May 22, 2017 at 21:03
  • Yeah, it's getting harder and harder to get a rate on the savings that justifies the effort, even if you can borrow at 0%. Commented May 24, 2017 at 0:27

It's still possible, but current money market and other guaranteed rates are so low that it's usually not worth the time and energy. However, even if interest rates were higher and it possibly would be worth it, it's not something that credit card companies worry about. They don't care if you're making money on the side. All they care about is that they make a profit. They make a profit on every purchase you make with that card, and on any future interest you might pay if you don't pay it off in full.

Not long ago my wife received a credit card offer that was 0% interest for 12 months with a 0% balance transfer fee. I did a double take but confirmed it to be true. But still, we tossed it in the trash with the rest of them because it wasn't worth our time...

Update: Just received another balance transfer offer for 0% for 14 months, with 0% fee. Here's a picture of it since it's kind of hard to believe:

enter image description here

  • no Annual Fee after the first year or such? Typically, there is a hook.
    – Aganju
    Commented Aug 19, 2016 at 13:53
  • I'm 90% sure there was no fee either. I think it was a Discover card. If we get another one I'll post a picture of it.
    – TTT
    Commented Aug 19, 2016 at 13:57
  • @Aganju - I just posted a picture of another zero-zero balance transfer offer with no annual fee.
    – TTT
    Commented May 22, 2017 at 16:31
  • For comparison, if you transfered a $10,000 balance and invested it for one year in a savings account offering 2% APR you would earn $200. maybe not worth your time but you could do this instead of going to a casino and call it "entertainment" and get a better return than the casino.
    – user12515
    Commented Apr 28, 2020 at 5:54

For many years, any balance transfers cost between 3 and 5 % one-time fee, in addition to the interest, which is often advertized in large letters to be 0%.

It is typically in the fine print, so you might miss it, but there are no offers without it.

So no, it is not possible.

  • So essentially you are saying Credit Card companies have figured this out long time back. But individuals haven't figured out the trick :)
    – Dheer
    Commented Aug 19, 2016 at 11:25
  • 3
    0% interest and 0% balance transfer fees do still exist.
    – TTT
    Commented Aug 19, 2016 at 13:47

The fact that it is and has been possible is not because the credit card companies hadn't figured out people were doing it, it was because most people were NOT doing it or made mistakes and ended up losing money as they did it.

I had a professor in college who did this as a hobby. He borrowed cash back from credit cards with 0% interest on cash advances and invested it, then shifted the debt around from credit card to credit card that allowed him to do this without charging. He spent a lot of time researching these cards and was constantly signing up for new ones. Ultimately he said he probably made about minimum waged on this. You do have to check the fine print carefully because there are frequently non-obvious fees that wipe out your profit.

Though credit cards with no fees for cash advances are not common, I would think the limiting factor for this to be an arbitrage would be the opportunity for a risk-free investment that earns enough money for it to be worth it. At current interest rates, risk-free investing is not a very attractive proposition.

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