Shell Games

So reading blogs today I found a kindred spirit when it comes to money (hyper)management. The guy over at MyMoneyBlog.com seems to have some interesting ways to nickel and dime yourself to riches, or at least extra cash. His series on using 0% interest periods on credit cards to earn interest on money that isn't even yours was amusing to read. While I won't quite go to his extreme, I have been doing something similar for some time.

The idea is to get a 0% period on a card for as long as possible with as high a credit limit as possible. You proceed to max it out, only paying the minimum during the 0% period, then pay it all off before regular interest kicks in. This requires some discipline to pay off on time, but should be easy if you have a pen and a calendar handy.

The point? You keep the real cash in high yield savings for the duration of the 0% interest period, earning a return on otherwise spent money. You use this cash to pay the card off at the end, but keep the earned interest. Obviously you are not getting rich on this scheme, but just delaying purchases like this will probably net me about $400 next year.

The guy at MyMoneyBlog.com advocates using balance transfer offers to basically transfer out negative balances, then request refund checks in the mail. While technically legal and all, it sounds like effort and possible hassle if anyone ever actually notices these shenanigans. He does make over $1000 a year doing it, so I guess if you really want to, some money is there to be made.

I just stick to the much easier method of basically delaying purchases as long as possible. This allows me to feed my paychecks directly into my savings. I can speed this up by paying for shared things (like bills, groceries, and trips) and have other people pay me back in cash, which I can keep on deposit. A bit stingy of me? Maybe... but it's actually kind of fun to play games with money. I think I get more enjoyment out of the act than the reward, as a $5k credit card is only worth about $200/year in interest.

Of course this is only possible with good credit, no balances, and people that pay you back (for shared expenses). Split a meal with someone that never pays you back, and you just flushed any advantage down the tube. Carry a balance on another card, and the interest there dwarfs anything you would earn with this tactic (always pay down high rate debt first - and credit cards are the highest rates). Bad credit, and you won't qualify for the 0% interest periods.

So an amusing trick (among many) to shuffle money and end up with more than you started with. It won't make you rich anytime soon, but it will pay the taxes on your cell phone bill. ;)