Profiting off balance transfer offer

Lmunya on 28/05/2014 - 21:41

So I have 2 credit cards, but pay off the balances every month. I also have an online savings account I'm trying to build up a decent balance on. I received a friendly letter from one of my existing credit card companies. They are worried about me juggling multiple balances across credit cards, so are kindly offering me a 0% pa balance transfer for 12 months. Thanks Westpac.

So, as a true Ozbargainer, it occurred to me, why not put in a balance transfer request for $10000 from Card B to Card A. Card A (Westpac) will send a cheque to Card B (Citibank)which will put card B $10 000 into the positive. I can then do $10 000 worth of cash advances out of card B (not all at once) and transfer this straight into my online savings account, earning me interest on $10000 for the whole year. Because card B is in the green, cash advance fees shouldn't apply. With compound interest, this should earn me some nice pocket money over the year. And of course I will set a calendar entry to make sure I pay off Card A before the 12 months is up.

So, my question is, this all sounds too good to be true for half an hours work. Am I missing something here??

Financial

Comments

  • grog on 28/05/2014 - 21:45

    Read the very detailed fine print.

    I trust the tax office 1000% more than any bank.

    The tax office only want the tax payable.

    Banks want all your money/fees directed towards their profit

  • ozhunter on 28/05/2014 - 21:55

    Am I missing something here??

    Nope, read a few people doing that and putting the money towards their mortgages on here and whirlpool.

  • PissLUR on 28/05/2014 - 22:00
    +1

    Yes, you would have to calculate how much does citibank charge you to withdraw the money. There will be a cash advance fee, even though it is your own money.

    what you need to do is to ask the cheque to be directed to you and not citibank.

    • G5 on 28/05/2014 - 23:26

      Yes, there will generally be a cash advance fee even if your account is "in the green", as you say.

      Ways to avoid this:
      - Ask for a cheque to self for the balance transfer amount (not all banks will do this)
      - Attempt to do the balance transfer to a debit card
      - Do the balance transfer to a credit card, then call the bank, tell them you screwed up, and get them to reverse it for free

      • [Deactivated] on 29/05/2014 - 09:21

        Do we know of any banks who have issued cheques in the past?

        • G5 on 29/05/2014 - 18:37

          CitiBank

  • Geewhizz on 29/05/2014 - 05:55

    Incidentally, you don't technically get to keep the whole $10 000 for 10 months. They still require monthly payments, which on that amount is probably likely to be around $350ish minimum.

  • munya on 29/05/2014 - 11:08

    I do have a seperate Visa debit account also. Would that work?

    • Geewhizz on 29/05/2014 - 17:07

      The card number will probably tell them it's not a credit card.

  • Seven8Nine on 29/05/2014 - 20:46

    The way it should work,

    say e.g:
    West Pack Credit card with 15 limit

    and U got offer for 12 months 0% interest balance transfer offer with min. monthly payment of $300. Note you can only transfer 90-95% of available limit

    To make best of free money, transfer money to CommBank Credit card ( also check with them if charge fee on transferring additional funds deposited by error(jus saying)and you dont owe any money as balance is paid off already).
    If they answer in ur favor, then transfer funds to CommBank Cr card and later do internal transfer from Cr Card to CommBank everyday account.

    I did once and was not charged any fee ( i confirmed with them as well)

    • OzSikh on 21/02/2016 - 15:32
      -1

      And if they ask how the error was made, bcoz they would be able to see, where the money has come from i.e credit card from another bank

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