Wednesday, March 26, 2008

Is there really such a thing as "free money"?

Lately I have been taking a serious look at my investment portfolio along with some other creative ways of increasing the bottom line. One such method is through taking advantage of bank and credit card incentives. This where where banks and credit card companies essentially offer you "free money" to do business with them.Chase Bank recently sent me an offer that was too good to pass up. They paid me a $200 incentive for opening up a new checking account with direct deposit. There was no required minimum for regular deposits, so I did not have to rearrange my financial life. So I went to my local branch and learned more about the offer. There was a min. $100 initial deposit required, but no required min. for direct deposit. The bonus would be deposited in approximately six weeks, but the account had to remain open for at least six months or they would deduct the bonus. I set up the account as an invisible savings account, figuring that if I didn't see the money, I wouldn't miss it, and thus not be tempted to spend it. The interest rate isn't the best, but the way I see things, I got my money up front.

Another "free money" idea that I'm considering is the increasingly popular Credit Card Balance Transfer Arbitrage. How this essentially works, is that you take advantage of a zero percent, no fee balance transfer offer, (on a card that carries no active balance) and invest the money into a high-yield savings or checking account for the duration of the offer. Until the fed dropped interest rates, we were seeing online yields of around 4.5-5%. On a $10,0000 transfer at 4.5% APY, that's $450 on a 12 month offer. The catch is that you must keep tabs on any monthly payments due, and pay very close attention to the expiration of the offer to ensure you pay off the balance before the terms/conditions expire. Google "credit card arbitrage" to learn more. Sites like "" and "mymoneyblog" and a handful of others offer some really good tips/advice on how to successfully execute an arbitrage plan. PLEASE NOTE! You should also be aware that borrowing large sums or maxing out cards CAN negatively impact your FICO Credit Scores. Please do your own research before engaging in the Arbitrage Game and READ ALL OF THE FINE PRINT BEFORE YOU TRANSFER A SINGLE DIME! This is a not a good practice for folks already in debt.

I also took advantage of a Credit Card Sign Up Incentive Offer. The Citi Professional card, their version of a business credit card, is offering 10,000 "Thank-you" points for signing up and using the card upon receipt. The points could then theoretically be redeemed for a $100 gift card through the rewards program. Since I already belong to the "Thank-you" program, I figured an extra 10K points couldn't hurt since the Thank-you program allows you to consolidate all of your points into a single account. Now that I received the bonus points, I've acquired enough (20000 pts as of this post) to redeem them for a free round-trip airline ticket! Not a bad deal at all!The last idea that I'm considering is seeing if I can really make money on the internet. Not a LOT of money, mind you... Just enough to create a revenue stream of some sort to make it worthwhile. I recently saw a book entitled, Moonlighting on the Internet by Yanik Silver, (See link in sidebar) which appears to have gotten decent reviews on various bookseller sites. It should be arriving later today, so I look forward to reading it to see if I can put the concepts to work. I'll report back on that later...

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