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No More 0% Fun

Longtime readers know that for the past several years I've been taking advantage of 0%-introductory-rate credit cards to hold a large balance paying no interest, while having the proceeds in a high-yield savings account, earning a 4-5% return with almost no risk.

I'm stopping. The credit crunch that began roiling the secondary mortgage market last year has rippled into consumer credit cards. The lucrative 0% offers (those with caps on balance transfer fees) have dried up. I still got such offers a few months ago, but recently, nothing. At least a handful of cards are offering good terms, but I already have them. I applied for the only one I thought was suitable that I didn't already have, but they only gave me a $4000 credit limit (no, there's nothing wrong with my credit report) so I decided it's not worth continuing. I scheduled a $19,700 payment to my last 0% card to happen about two weeks from now, and then I'm done.

I've made several thousand dollars doing this over the past few years, and I'm a little sad to see it end. But only a little sad. I think the edge is taken off by my schadenfreude from watching how much pain the banks are in. :)

The banks were foolish to offer such generous terms in the first place, especially after the phenomenon of people (like me) taking advantage of them became well-known. But the banks have been doing foolish things all through the easy credit environment.

My only regret will be if all the talk of mortgage bailouts (which are a terrible idea) makes its way, in a worsening economy, to people with a lot of credit card debt too. Because then I could have been bailed out, which would've been sweet. :)


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Tiny Island