Another 0% BT from Bank of America. What to Do with the Money?
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Yesterday I got a couple of convenient checks from Bank of America. Together with the checks is a letter saying that I can use the check to make balance transfer which has a promotional rate of 0% APR till November 2007. That sounds a good deal as I have $14,500 credit line with the card and I can certainly use the free loan. So I called them this morning to confirm about the offer before using the checks. To my surprise, I was offered a little more on the phone.
Besides the BoA Visa card, I also have an AAA credit card which was issued by MBNA with $18,300 credit limit. The card was merged into my BoA account after the MBNA and BoA merger last year. Over the phone, the CSR told me that he could help me move $18,000 out of the $18,500 credit line from the AAA card to the BoA card, so I can get more out of this 0% offer without closing the AAA card. Since I haven’t used the AAA card for years (they used to give 5% back on gasoline five years ago), I don’t have any problem with only $500 credit line on it. So I want ahead with the credit redistribution and transferred $32,000 to my BoA checking account, which will be available in 2 to 3 days. The cost of this transfer is $90. All done over the phone.
Together with two other 0% BT offers from Citi and Discover, I currently have $58,000 free loans. Part of the money is in my IGoBanking savings account, some are used to purchase 4-week T-bills., and the reset is invested in a stock. Now I have another $32,000, what should I do with it to get the maximum gain? The safest way to go is again to put the money in the IGoBanking account which pays 5.30% APY or I can buy more 4-week T-bills. I checked the 6-month CD rates from the banks that I have an account with and found what they offer are not very appealing. For example,
- HSBC 6-month CD: 5.25% APY
- Emigrant Direct 6-month CD: 5.10% APY
- IGoBanking 6-month CD: 5.30% APY
None of them beats the 4-week T-Bill rate, which is at 5.247% APR as of March 22, 2007. Is there any other better options?
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- Pingback by 2007 4-Week T-Bill Rate Update | The Sun’s Financial Diary | A Personal Finance Blog on Saving and Investing on May 7, 2007 @ 9:45 am
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Just curious… How do you get your free balance transfer liquid? Say I get an offer in the mail for a free balance transfer on a $10000 limit card, I have no actual balances to transfer, so How would I get access to that $10,000 in order to invest in a stock, or deposit in a savings account, etc.
If you didn’t get a convenient check to deposit the balance in your bank account, you can still do the balance transfer if you have a Citi card. I have a post on how to do the transfer with Citi card which can be found at here.
I also have gotten these “convenience checks”, but I noticed that they carry a 3% transaction fee. How do you get around this?
Paul: I usually don’t use the balance transfer check if it doesn’t have a ceiling on the fees. For a 3% fee, the deal isn’t that appealing any more even you can get a 5+% interest rate from a bank. I only take those with a maximum fees (usually $50 to $75). BoA balance transfer usually charge $75 maximum fees. So be sure to checking if the fee of your convenience check has a maximum or not. If it doesn’t, then it’s not worth it because the more you transfer, the higher fee you have to pay and the less you will have in your pocket.