No sooner did I close out my last 0% credit-card arbitrage play than Chase came after me again. It was this past Saturday, in fact — about one day after I'd blogged about closing out Arbitrage #2.
The postman delivered yet another four balance-transfer checks into my hands. Once more, my pals at Chase are offering me 0% percent interest, on any transferred balance, for ... well, for not very long.
And they've changed the offer in a few important ways.
For instance, let's take a look at how Chase has played with the phrasing of their offer's terms. Following is how the term was spelled out in my previous (February 2005) offer:
...save with a low promotional 0% fixed APR through your last billing cycle that ends before November 1, 2005.
And the new offer:
...to get a low promotional 0% fixed APR until the first day of your billing cycle that includes April 1, 2006!
Convoluted enough for you? Me too. But as best I can tell, it's just a different way to say the same thing. Basically, what it means is that I can use their money rent-free through early March of 2006. Checking my calendar, I see that that's a period of only 4 full months from now (allowing some time for the check to clear, and so on).
And as before, that's some pretty tricky wording — well, really tricky — because all many consumers will see is:
...get blah blah 0% fixed APR blah blah blah blah until blah blah blah April 1, 2006!
And it gets better. Now the microscopic print at the bottom of the letter tells me that Chase has jacked-up its fee for this magnificent promotional transaction. The previous offer's maximum fee was $50. Now it's $65. Hey, bankers have to pay for gas, too, right?
(And in an apparent attempt to stay ahead of inflation, the folks at Chase have also recently raised my credit limit by more than 30 percent. Thanks, guys. Way to do your part to keep the American Consumer on course.)
Some numbers crunched in an Excel spreadsheet tell me that given the small time period of this 0% offer, I stand to earn interest (via ING @ 3.4%) of just over $120. After taxes, that'd be about $104. Then take away the $65 fee, and I'm left with a profit of just about $40. (In this scenario, I'd be making the monthly card payments from funds other than those I've borrowed from Chase.)
Now, I know that Emigrant Direct savings accounts currently offer 4% interest. But I don't have an Emigrant account. My previous two attempts to open Emigrant accounts online have both failed, and to be honest, I'm a bit too occupied with other things right now to call their 1-800 number and try to open an account that way. But even with Emigrant's better interest rate, arbitraging this offer from Chase would net me only about $58.
So I believe I'll pass on this one. If the term were longer, I'd probably take them up on it.
Once more, though, I'd like to point out to readers: If you're going to arbitrage credit-card offers like this, you must take care to understand all the terms, and read the fine print!
Just because you receive multiple offers from the same company doesn't mean all the offers are similar in terms.
Labels: Credit Cards