Credit Card Arbitrage

This has become a popular strategy for those who have good credit and are very organized in maintaining payments in a timely manner.
How it works:
1. apply for a credit card that has a promotional 0% apr for a period of time for balance transfers.
2. do a balance transfer for the maximum amount. You can either to the transfer into another credit card or request a check.
3. If you transfered to another credit card then contact the other credit card company and request a credit refund.
4. take this money and invest it depending on your risk tolerance level. If you are risk averse then go with a savings account or CD(4-5%). If you love risk then go for a canadian royalty trust to get around 14%. Since you are using debt its probably best to go the low risk strategy and just put it in a savings account.
5. make sure you pay on time each month and pay back the remaining full amount when the promotional period ends. Best way to do this is to have an online bill pay account with your bank. This way you create a schedule of automatic bill payments so you do not have to worry about missing payments. Then you just sit and make money.

Key things to remember -
1.Make sure you pay on time
2.Make sure you pay the full remaining amount prior to the promotional period expiration.
3.Make sure you verify the amount of the balance transfer fee (if any). CC companies are starting to have the fee be a percentage of the balance transfer amount with no max. If there is no max transfer fee amount then this fee could negate any potential earnings from the investment. This happened to me with a Citibank transfer fee. I transfered 10k and the fee was $300. So make sure you check.
4.When requesting credit you will be hurting your credit score initially so be aware of that.

You will not get rich from this but you will make some nice extra cash with little effort.