Make Money from your Credit Cards

If you have great credit and have no plans on using it in the near future, this post may help you earn an extra $1,000 to $2,000 per year with relatively little work. I heard about it a while ago, but I felt it wasn’t for me, yet. I know there are probably a lot of readers who could benefit from this, so I decided I would give you a little background so you can look at the facts and figure out if it would be good for you.

What is it?

It’s called credit card arbitrage by most bloggers and websites I have read. The idea behind it is you rack up a lot of credit card debt. A lot of credit card companies will allow you to write a check to yourself. Then you transfer the balance over to a 0% introductory card and put the money from the check in the bank. You will then leave the money in the bank and accrue interest while paying no interest or fees to the credit card company.

credit cards

What are the risks?

There are relatively few risks, but they are important to know. This plan is definitely not for most people. First of all, this will probably hurt your credit rating a little bit. You will be carrying a lot of debt and have a pretty high credit card utilization ratio. This looks bad on your credit report. So if you are looking to buy a home or new car in the next 2 years or so I would not recommend trying this as it could possible cause you to get a higher interest rate on your loan which would probably not be worth it.

Also, this could cause problems if you don’t have good self control. When you get that big check in the mail from the credit card company I could see some people wanting to go on a shopping spree instead of putting it in the bank. If this sounds like something you would do, do not try this. It only works if you are able to pay the balance off in full once the introductory period is over.

What are the rewards?

The rewards are pretty decent for the amount of work you do. If you have good credit, then you could probably obtain $50,000 worth of credit. If you were able to earn 3.5% interest in a high yielding bank account, you would earn $1,750 in one year.

Do you know anyone who has tried it?

Yes, I read a lot of blogs. Like I said earlier, this was not my idea. I had heard about this long ago. Here are a few people who have successfully tried credit card arbitrage:

Bargaineering earns $444 a year – he got really small lines of credit.

Stop buying crap also does this – he even tracked his FICO score so he could see the effect of the extra credit cards on his score.

The american express had long ruled the credit card arena. Even the mastercard has been unable to achieve that glory. There are new credit card companies sprouting up every day. One promising name is that of capital one credit card.


  1. i did this a while back when savings interest rates were more attractive. over 5 months i earned approximately $350 on $23,000. Not bad for doing nothing. My credit score did take a hit but it’s back to normal now. I’d try it again but my credit cards aren’t as generous with 0% interest offers as they used to be.

  2. I took a 0%, no fee, 12 month balance transfer of $15,000 from Citibank in February. I put the money in a 9 month CD at 4.20% with Everbank, before the latest fed interest rate cuts. When the CD expires I plan to move the money to one of my high interest savings accounts, like Ingdirect or FNBO. This is the first time I have tried this strategy. It was very easy to set up and I am paying $25 more than the minimum payment, which I have read will lesson the ding on my credit score. I feel the key here is to absolutely make sure you pay the monthly payment on time and pay the card off in full prior to the due date. If you fail to do either of these steps, you will certainly pay much more interest to the credit card company than you will have earned.

  3. I have had much success with this type of program, but have never blogged about it. The deal is getting more difficult as of late though because many credit card issuers are giving you the 0% for 18 months, but they want 3% as an up front, one time fee. There are still deals out there, but you have to look hard for them. Also, savings rates are difficult. You may get a better yield from one of the personal loan sites that are available now. Check them out. Regular people make loan requests and agree to pay higher interest rates. You decide who you lend to.

  4. Almost Millionaire,

    I agree with you, I could probably get a better rate from those personal loans sites. I am making around 15% at Prosper. The thing is, I need something that is no risk and that is guaranteed. This is one thing that you could not afford to lose the principle. I would not recommend doing that, but thanks for the comment.

  5. I’ve been doing it for several years now and have probably made about $5,000 (pre tax) by doing Credit Card Arbitrage.

    The lower interest rates do make it harder to make money now. On the flip side, as interest rates come down, credit card companies do extend more 0% BT offers.

    Right now, I have one running, but I expect to see more in the coming months.

    I automate the entire process through auto transfers and On Line banking. It’s pretty much a set and forget sort of thing.

    I did a 5 Post series on my process last year:

  6. Cromely,

    Have you had to use your credit for anything recently? Like buying a home or car etc. I was wondering if this affected the rate you received b/c doing this usually drops your score a little bit.

    I plan to hold off on credit card arbitrage until I have bought my own house/car.

  7. First thanks for the comment on my blog. I have now entered your link as requested.

    Regarding 0% credit cards.

    It’s possible to make a little cash with these – or rather it was. However, I would never advise anyone to ‘rack up a lot of credit card debt’.

    In the UK the balance transfers to 0% cards were very popular but now the banks want 2-3% of the debt being transferred.

    Previously I have used a 0% credit card and paid the minimum monthly amount. The rest I placed in a High Interest Savings Account. I did this until it was necessary to pay the balance in full. It made some interest in the Savings account. Not big money by any means but I always maintain that any profit is good profit.

    At the present time I use credit cards for purchases that pay me 1%. Again not a big amount but over a year it builds up with normal spending.

    Credit cards are expensive credit and I feel should, therefore, be paid off every month.

    Good luck with your target.

    Best wishes,

  8. Mike,

    Yes if anyone was to try this, I would recommend that they read all of the fine print first. If the bank were going to charge you 2-3%, that would take almost a year to recoup those fees with interest in the bank.

    I too have one of those cash back cards and love it. The thing is, you have to make sure you are not spending extra money just because you are getting 1% of it back.