credit card arbitage

[LivingAlmostLarge]

How many people do the credit card arbitage for miles? Have you found it easy to use? How many different airline credit cards do you have and have you used? Which one do you like the best? How many miles do you rack up a year?

[Like2Plan]

Our mainstay is southwest because of the companion pass.

We've tried other cards, but almost all our spending is tied up with trying to earn the CP that it is difficult to derive much benefit from the others.

I had a real difficult time booking tickets for DH and I on Delta using award miles.

I liked United. But, we didn't charge enough to derive any real benefit apart from the introductory bonus miles. They also gave a couple of passes to visit their lounges, but we had a hard time using them (didn't go to airports where the lounges were located very often.) When we finally did visit a lounge, there were tons of people in the lounge and the snacks etc were not the impressive.

We tried the AMEX (platinum, I think?). The fees were pretty high. We recouped some of that through the airline fee credit. The Centurion Lounge at SEA was the best lounge I have ever visited. But, that was the only one we ever visited. I never did get a good grasp on how booking airfare through their system worked. I never used the concierge travel services. We only kept it a year and then cancelled. It just wasn't a good fit for us.

[rennigade]

What is credit card arbitage?

edit...I just looked it up. No...seems like a waste of time to me...or a really risky play.

Its one thing to sign up for credit cards for their initial offer then cancel after you redeem (credit card churning.) Its another to borrow money at 0% and invest in something that generates what...1.5%? Unless you're going to invest in something thats not so safe...then things could turn into a disaster. I would never recommend this.

I did however just sign up for a citi thank you card...spend $4k in 3 months...get 50,000 points. Ill redeem those for $500 in gift cards...then ill cancel the card. Wife also signed up for it. Thats a safe play in my book.

[QuarterMillionMan]

I have 2 credit cards, Citibank which has a cashback thingy and Bank of America which doesn't have any cashback. I'm not sure why I choose to keep the BOA credit card since it doesn't provide any cash back so I use it sparingly.


I've contemplated getting the Harrah's credit card which builds points to use at Harrah's casinos but they have a very weak incentive of $50 for the initial sign up after a certain amount of spending which is not enough to make me jump at it. And I'm not much of a Harrah's patron.

[~bs]

I considered it, but ultimately decided not really worth my time. Much of my spending is for business purposes, and it would be quite irritating keeping track of multiple new cards opening and closing since i do reconciliations on all accounts.

Most of the cards with great reward incentives are the fee based ones, so you wouldn't want to leave them open long term if you're not using them for a reason. The ones that are no fee and have $100 bonuses are small potatoes, and you might as well leave them open.

There's been a lot of consolidation in the credit card industry over the past decades. If they notice you're "farming" credit card bonuses, they may blacklist you from applying to these cards in the future. Since there's less providers for these cards, you're blocked to a wider swath of cards. If you "churn" your cards once every few years, you probably won't have issues.

[tkennedy]

citibank Spark business card - 2% back on EVERY PURCHASE - they credit the 2% dollar for dollar against your card balance. So I charge everything I buy on it and pay my balance off every month. Result? Everything I buy is at a pure 2% discount - that is what arbitrage is

[corn18]

that is what arbitrage is

no it isn't.

arbitrage: the simultaneous buying and selling of securities, currency, or commodities in different markets or in derivative forms in order to take advantage of differing prices for the same asset.

[rennigade]

no it isn't.

arbitrage: the simultaneous buying and selling of securities, currency, or commodities in different markets or in derivative forms in order to take advantage of differing prices for the same asset.

Thats what I found initially...then I searched for " credit card arbitage."

Credit card arbitrage involves borrowing money from credit card companies, then investing that money in an instrument offering a higher interest rate than what you're paying. ... Proponents of credit card arbitrage point to the fact that the 0%, or low interest rate, enables consumers to obtain capital at no or low cost.

[MonkeyMama]

Credit card arbitrage involves borrowing money from credit card companies, then investing that money in an instrument offering a higher interest rate than what you're paying. ... Proponents of credit card arbitrage point to the fact that the 0%, or low interest rate, enables consumers to obtain capital at no or low cost.

Agreed. I've done this when interest rates were higher and I could borrow at 0% for a guaranteed 5%+ FDIC-insured rate. This is kind of dead with the current low-interest rate environment. It's maybe been 10 years since I have bothered, so you probably don't see people talking about this much. I mean, if you want to borrow at 0% and throw that money in the stock market... No one with any financial sense whatsoever would do that because credit card terms are so awful. I have a low risk tolerance (low or moderate) but I know 100% I can pay back a credit card loan before the 0% rate turns into 20% retroactively (or whatever nonsense the credit card companies do).

LAL, I don't play the travel game so no answers for you.

[tripods68]

How many people do the credit card arbitrage for miles? Have you found it easy to use? How many different airline credit cards do you have and have you used? Which one do you like the best? How many miles do you rack up a year?

Just booked our family vacation in June to Belize using our travel reward points from Delta. We also used our cash reward points to offset the 1-week Airbnb stay with our Citi Costco card. Our spending budget for the entire trip is probably 1000 to 1500...most of that will be paying for food, gifts, and outdoor experience. We rotate using Citi Costco, Chase, and Delta Amex on regular monthly bills.

AMEX HHilton 54,000
Chase Sapphire 62,500 (worth $620 in cash value)

[disneysteve]

I've done this when interest rates were higher and I could borrow at 0% for a guaranteed 5%+ FDIC-insured rate.

Same here. Years ago, I used to take large advances from my Discover card for a very small fee, deposit the money in my high-yielding tax-free money market account, and then pay the bill right before the due date. I made a couple hundred dollars every 2 months. It was excellent. Then Discover changed the fee structure and rates started falling and it was no longer worth doing.

[LivingAlmostLarge]

I was told some bloggers would charge $100k for miles then use miles for rewards or cash advances and then turn around and pay it off. The 3% surcharge for the miles or rewards was minimal.