Jam

i have two credit cards...

can i charge up 20 bucks on card a... pay it with card b then when card b's bill comes pay it again with card a... then back to card b... could this work? how long could it be done... think of the points id get

Averett

The points? What points?

This really isn't a great idea... You'll get into the habit of transfering balances back and forth. And first it's $20... then $100... then more.

I've done this. I had about $5,000 in credit cards. So I figured I'd open up a new card and take advantage of the 6 months with no finance charges. So I transfered my debt to the new card. But of course I still used the old card... Didn't help at all.

So my advice is to not do this. It's not the best idea.

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qtpye4u84

I don't think so. But thats just what I think.
Does not sound like a good idea.

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Jam

no no averett.. not transfer debt.. i have no debt.. say i owe them 20... i pay them 20 then the cards clear... what if i pay them the 20 with the other card.. then the first ones clear and i owe the other 20... so i pay it and i owe the first but not the second one..

i dont have any credit card debt.. choice reward points you get on one of them for using it.. thats the points.. no debt would pile up cause it would always be paid off.. it would go 20 then 0 then 20

it would really just be something to do for fun and i was just wondering if theres anyway it would backfire

Averett

That's transfering debt. You OWE one card $20. Then you pay that off with another card. You OWE that card $20. How are you not in debt? You haven't paid anyone $20. You're still playing with borrowed money.

I dunno, I still think it's a really bad idea.

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Jam

well yes but i wont be overdue

Yakk

jam, transfers and cash advances generally generate interest from the moment you do them. For pretty much exactly this reason.

So, you might be avoiding minimium payment penalties (at best), but you won't be avoiding any interest. And if you can't afford your minimium payment, you are really fucked.

Pay off credit cards ASAP. The interest you are being charged might not seem like much, but it grows and grows and will eat you alive.

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Last edited by JHVH : 10-29-4004 BC at 09:00 PM. Reason: Time for a rest.

Averett

I currently have interest chewing my right foot....

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Jam

i will pay it off... i dont know if you understand what i mean. maybe it cant be done i dont know

but lets say i got to grocery store and buy 20 dollars worth of something on credit card a.. when i get bill for credit card a i pay it off... no charges no nothing

what i was wondering is not going to the bank and say lets transfer this.. i am just wondering if you can go to the bank and pay credit card a's 20 dollars off with credit card b as if credit card b were spending 20 dollars at the movies or something.. just charge it.. then there would theoretically be no transfer or cash advance.. just a normal charge..


edit.. its not i cant pay things back i just wonder why this couldnt be done


edit** im not trying to get on anyones nerves i was just trying to find out why it cant be done.. thanks for the replies

Yakk

You shouldn't be able to do this "like spending 20 dollars at the movies". You can probably do this "like getting a 20$ cash advance".

The reason is, when you buy something from a movie theatre, a % of your purchase goes to the credit card company (about 3%?). Payed for by the movie theatre. On these purchases, you don't get charged interest until the end of the month, and you get magic points on many cards.

When you withdraw cash or pay another credit card, your credit card company doesn't get the 3% (or whatever). You get charged interest from the moment you make the payment/cash advance.

There are occasionally special cheques given to people with credit cards that allow you to transfer balances, but you won't always have these: they are a special deal, the credit card's attempt to get you to pay them interest instead of paying someone else interest.

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Last edited by JHVH : 10-29-4004 BC at 09:00 PM. Reason: Time for a rest.

Aletheia

I agree with Yakk. The only way I can see this being done is with cash advances and you get fees up the booty for doing them.

bogosj13

As far as rewards points go, I'm fairly certain that you wouldn't earn any for this process. I currently have my creditcard set up to pay my mortgage, car insurance, etc. each month (which I pay off immediately). None of those transactions earn any points.

tkkfan

doesn't it cost to do balance transfers?

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bogosj13

For some reason, my credit card company does not consider paying my other credit card bills balance transfers (at least as far as I can tell). It's just another bill, like the cable or electric.

HamiC

I see two problems...

1) Points programs typically do not award points for so-called "balance transfers"

2) Despite the low initial interest rate, there is often a separate fee for use of balance transfer checks

Simply put....not gonna work....and not a good idea.

Chingal0

I'm pretty sure that this is called 'kiting' and is illegal.

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NoSoup

"Kiting" actually refers to a type of check fraud. What the original poster is talking about is most likely legal, in fact, the credit card companies would probably encourage something like this because they make additional monies off it.

jarsh

who do they make the additional monies from? is there interest incurred before the first payment? using the example above, would the first bill be 20.05 (arbitrary number) then the next bill for card B be 20.10? this would be a cheap way to make the points he wishes for, but not free right?

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NoSoup

Well, most, if not all credit cards charge a fee, usually 1-3% for a cash advance, with a minimum fee of $X, usually $5.00. Not only that, but interest usually begins accruing immediately when you take a cash advance.

So, he takes a balance on credit card A of $20, and pays it with a cash advance from B (most cheques from credit card companies count as a cash advance). Total balance on card B is $25.00. If he waits until the next billing cycle, and pays be off with card A, he'll have a balance of $31 dollars on card B (Usually a $1.00 minimum finance charge). He again pays off card B with card A, and now carries a balance of $37.00. The cycle continues until he stops...

His idea certainly would work if you could find a "rewards" card out there with no cash advance fee, no minimum finance charge, no annual fee, and also not begin to charge interest on a cash advance immediately. However, most, if not all cards, have these charges to prevent cycles such as this.

Chingal0

E.g.: a credit card kiting scheme utilizing the credit available on various credit cards to pay for living expenses and to make the minimum payments on other credit card accounts [In re Easchai, supra; but compare In re Bixel, 215 BR 772 (Bank.SD.Cal 1997) (debtor used credit card to pay off other credit cards, which were not used again, in an attempt to consolidate debts and have a single monthly payment);

From http://touchngo.com/lglcntr/usdc/bnk...iefs/bnk54.htm

That reads to me as the same thing that jam161 is inquiring about. It seems like a win-win situation, but if he is not opening any new credit cards etc, it might not be illegal, as in the explaination above, they said that teh cards were not used again.


Here is an example of Check Kiting from http://www.crimes-of-persuasion.com/...bank_fraud.htm

Kiting

Cheque kiting is when in-transit or non-existent cash is recorded in more than one bank account. The crime usually occurs when a bank pays on an unfunded deposit.

For example, a bum check is deposited into an account. Before the cash is collected by the bank, a check is written against the same account and deposited into a second account, or cashed. The increased use of wire transfers allows this type of scheme to be perpetrated very quickly.

I dunno. I wouldn't do it.

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