Borrow money from low interest credit card and invest it in higher interest yield account?
I got an offer where I can borrow money from my Credit card for 1.99% APR until Feb. 2008. There is a fee of $75.00 which is minimal as the amount I would borrow would be about $18,000. I can take this money and invest it in a savings account that has an APR of 5.35%. I can make the monthly payment straight out of the account and make an effective 3% interest on the money. Would this be a good idea? The only down fall I see is how the extra debt would affect my credit score over the next year (currently in the mid 700’s). However, I do not plan on borrowing any money over the next year and a half.
Sounds like a plan.
But more often than not, there’s a catch.
I haven’t read the specific offer, but sometimes the “teaser” offer is for purchases and balance transfers only, and cash advances are at a higher rate (sometimes a much higher rate!)
Please read the fine print to make sure that this isn’t the case before you do this. Otherwise, it sounds like a good deal. If you can find a good savings account that can be funded via credit card, all the better.
No way are they letting you keep that rate on that much money for that long. Has to be something you are not seeing.
I know a company currently offering over 10%
Top 6 Answerer.
it lowers your credit score.