What do you think about getting a 0% interest cash advance on a credit card?

And using the money to buy stocks.





Generally, these cash advance offers I have been receiving are for 6 months, but I might be able to find one for one year.


After that, you are required to pay interest.





So, I borrow $10,000 dollars from my card at 0% (free money) and invest it. I pay it all back before the interest charges start kicking in. If you know of a better investment than stocks, tell me.

What do you think about getting a 0% interest cash advance on a credit card?
You haven't just discovered something that nobody else knows. It's called THE CARRY TRADE... borrowing money at a low interest to make money on a higher interest fund... the japs have been doing it in AmeriKa for years.
Reply:You have everything worked out but what you do if the stocks lose value, and I don't see any place for the fees that the brokerage will charge you, and while ten thousand may seem like a lot to you, its not much to them.


You won't get rich on ten thousand, if you put it into a standard savings account you will have about $42 more than when you started.


The best thing I ever heard about the market was that you have to consider it as legal gambling, you never put money in that you can't afford to lose, and if you are borrowing ten thousand dollars, you can't afford to lose it.
Reply:If the stock goes down, then you can't repay the credit card.





Also, the 0% applies to the interest rate. That doesn't mean it's free money. Many have "cash advance fees" that are 3%. If you do this and pay it back in 6 months (typical offer) that's 6% per year, so, your stocks would have to make 6% per year just to cover the cash advance fees.
Reply:My credit card gives me 1% cash back for every purchase.





I pay it off every month so there is no fee (FREE MONEY).
Reply:Sounds like a great strategy. But the credit card companies aren't getting filthy rich by lending money at 0% interest. They suck you in with zero percent interest and then as soon as a payment is late, interest goes through the roof and you incur late charges.





Best advice, avoid credit card debt altogether. Credit card companies are evil.





Good luck.