Credit card arbitrage is a way of earning 'free money' from interest. You take cash as a 0% balance transfer offer and put it in a high yield savings account. Make the minimum payments each month and pay off the balance before the 0% offer expires. This has been a popular way of earning extra money during the last few years, when credit was loose and limits high. I personally have never tried it, but my method for paying off the Care Credit balance is a variation on the theme, a sort of reverse arbitrage.
Free or low cost balance transfers are now hard to find, but cards offering an initial 0% on purchases still exist. You could use a no interest card for your family’s spending for a year, only paying the minimum each month and banking the balance. You need to be organized and never late with your bills for this to be a success. The longer the 0% offer, the longer you have to earn interest.
BIG FAT WARNING - If you have a debt or spending problem, do not try this.
Unfortunately rates are low right now, so the amount you earn is limited. Also, this method doesn’t have as high a payoff as traditional credit card arbitrage. Rather than having lots of money earning interest from the start, you are slowly building up the savings balance each month. But, it is still an easy way to earn some free money and once interest rates recover, your earnings will improve. It is another tool to keep in mind when you are looking for that extra buck.
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