Friday, March 31, 2006

My 0% interest scheme was a flop

A while ago I wrote about using a 0% balance transfer offer to earn a little extra money buy putting the transferred money into a high yielding savings account. There are technically no rules against this and although the interest would not be substantial (probably would amount to about $300), it would be "free money". I was ready and determined to avoid any sneaky fees that the credit card company might try to charge me. I was not ready however, for the endless delays that they would subject me to.

I called the credit card company and told them that I wanted to wire transfer $23,000 into my checking account. Unfortunately, the thing I did not know was that in order to request a wire transfer, you have to call from your home phone number. When I moved, I had failed to update the number on my account and the old number had long been disconnected. I updated the phone number and would have to wait another 30 days for the change to take effect. It was frustrating, but understandable. They were only trying to look out for me, right? She suggested that I simply write one of the checks and take it to my bank to deposit it.

That is exactly what I did. The only problem was that when I tried to deposit the check, they informed me that they would charge a $15 processing fee and would hold the check for 5 weeks to make sure it was legit. Apparently, banks have a dislike for checks from credit card companies. I fussed and fought but they were not budging. So I politely told them to shove it and left without cashing the check.

I waited and waited thinking of all the interest earning time that was passing by. Finally, I figured that it had been 30 days and called back to get my money. Everything seemed to be going fine. $23,000 is nothing to sneeze at so of course when I called and talked to the customer service rep they asked me to answer a number of security questions to verify that I was who I really said I was. He told me I should have my money in about a week. Finally!

Every day I would check my account online, waiting for the transaction to go through. Then one day I tried to log into my account and nothing was there. Panicked, I called them. They had placed my account on hold because they suspected fraudulent activity. (I know you can't see me right now but just imagine me rolling my eyes.) So I answer the security questions again and he cheerily informs me that my account should be back online in 30 minutes. Greeeaaat.

The next day, I log online and still nothing. I call back and go through the same ordeal.

Them: Did you recently initiate a balance transfer?
Me: Yes. I have already talked to two different people about this.
Them: O.k. ma'am. Well do to a high volume of fraudulent activity we need you to answer some security questions.
Me: Fine. But I've already answered these questions twice already.

After a series of exceedingly annoying questions, they confirm that indeed everything is legit (for the third time) and say that they will restart the balance transfer process and that I should get my money in a week. This is where I lose it.

Me: You told me a week ago that I would have my money in a week. Now you're saying that it is going to take another week?
Them: Well we had to put your transaction on hold because there were fraud concerns.
Me: Were you ever going to call and tell me this? Remember, I had to call you to solve this problem.
Them: We sent you a letter.
Me: A letter? I'll probably get that in a week. Couldn't you have at least called if you were seriously concerned about fraud?
Them: Um, we did. But we couldn't get a hold of anyone.
Me: Did you leave a message?
Them: Um, actually they said you didn't live there anymore.

I am so completely irritated at this point that I tell them to forget the whole thing. What was the point of me updating my phone number over a month ago if they can't even get the phone numbers straight in the first place? I won't even torture you with the back and forth exchange I had with these people about why they were calling the wrong number.

My theory is that they drag out the process as long as possible so you have the money at the 0% rate for a shorter amount of time. They used to give you 6 months or some predetermined amount of time to have the money at the lower interest rate. Now they do it so you only have it until a specific date. And not to mention that although they say that you have until say September 20th, they really mean that you have until September 20th or before the pay cycle that includes September 20th. This means that if you wait until September 19th to pay it back but your pay cycle begins September 18th, you are already too late.

It was a good idea but not made for a person with low tolerance for annoying customer service. I just couldn't stand the thought of having to call them and answer more security questions. Another victory for the credit card companies. But at least I don't have to sleep with the enemy anymore.

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BudgetGuy said...

I'm currently making about $200/month with this little trick. It's not that hard. Call citi, sign up for a simplicity card. Get them to mail you a check for your credit limit. wait 7 days. deposit the check. I bank at chase, there's no hold. transfer the money to ING or somewhere.

Set up your ING account ahead of time, that takes about a week.

$200/month. Free for the taking.

savvy saver said...

I've never had a problem. I have Citi deposit the money directly in my credit union checking account, and then transfer it to Emigrant. Or, with MBNA, Chase, and Discover, I have them send a check. I made $170 in March with to BTs running.

Anonymous said...

You also have to remember, if they wire, you will pay a fee.

lpkitten said...

hey - i'm not saying it can't be done. i'm just saying that my exeprience was extremely annoying.

Single Ma said...

lpkitten - I completely understand your frustration. I've never done a 0% BT but I've had my share of headaches dealing with CC customer service reps.

Debt Hater said...

I've read so much about this, but think it's too risky to try... at least it is for me because I am deep in debt AND trying to boost my credit score (which isn't low or anything, I just want it higher). Opening up new accounts and maxing out the card (by cashing checks or transferring) lowers your score.
How much do you have to deposit for this to be worth it? It seems anything less than $10,000 isn't worth the hassle. said...

you know that is just absolutely crazy. seriously. bravo to you for sticking to your guns as much as possible because apparently that is what it takes.

inagm said...

I've never had a problem either, and I've used balance transfers from Citi, Discover, MBNA, HSBC, and Chase. However, I've never tried to transfer 23K all at once - perhaps you would have had less trouble if you kept each transfer under 10K

Tiredbuthappy said...

I've never done it, but my work hours have been reduced so in May I'll have more time on my hands and less money coming in. Sounds like the perfect time to try it. I'll let you know how it goes.

mOOm said...

I had no problem depositing a $9000 check to my HSBC bank account from my credit card. The downside is that too high a credit balance damages your credit score.