Borrow money from low interest credit card and invest it in higher interest yield account?

Question

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.

Answer 1

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.

Answer 2

I know a company currently offering over 10%

Top 6 Answerer.

Answer 3

No way are they letting you keep that rate on that much money for that long. Has to be something you are not seeing.

Answer 4

Sounds like a plan.

But more often than not, there's a catch.

Answer 5

it lowers your credit score.