Credit Card Arbitrage
Advertising Disclosure is an independent, advertising-supported web site. receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. has not reviewed all available credit card offers in the marketplace.

Credit Card Arbitrage

Add to Favorites:
For those of you who don’t have a grip on your finances, owning a credit card would be a huge mistake. However, if you already own one I don’t have to remind you of the mountain of debt that accompanies it. In today’s society, credit card debt has become an important issue for families struggling with their finances. Credit card companies have managed to make use of the compound interest rates to enslave you, making getting out of the debt seemingly impossible. However, there are the few out there who have managed to make use of the idea of credit card arbitrage to benefit from the interest gained on their cards. The idea behind credit card arbitrage is to invest the money drawn from a low interest credit card in something that would hopefully generate a higher return or at least help you pay of the interest. Some daring cardholders also make use of zero interest promotional cards (usually the promotional period is about a year) to turn a profit. One way to do this would be to invest the money from the card into a savings account, which offers a high interest rate. This will allow you to make each monthly credit card payment on time. When there is a change in the rate of interest or the end of the payment period is reached the money withdrawn from the bank can be used to pay of the balance. This may all seem very easy at first. But do keep in mind that the interest rates may change with little or no warning. However this usually happens as a result of late or missed payments. As a result this may hamper any chance of making a profit. The profitability through credit card arbitrage depends on the line of credit available. The more money can be borrowed, the higher will be the return once the borrowed amount is invested in an account that yields a reasonable interest. Credit card arbitrage can really hurt your credit score. The credit score usually goes down in the beginning because a large chunk of the credit line is borrowed for investment into other accounts. Late payments or missed payments could damage your score even further. Credit card arbitrage is not for everyone. Due to its risky nature it should be employed by only those few consumers who rake in a substantial income and who are good at managing their finances.

Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Other Cardholder Benefits Research:

Related Research:

How to Get Free Wi-Fi in the Air

By Herbert Moore, Posted: September 28, 2016

Sometimes in-flight Wi-Fi is the bare necessity when you travel abroad or within the country. However not all airlines offer free in-flight Wi-Fi. There is only a couple of airlines that will allow you to use Wi-Fi ... Continue reading

Amazon Credit Cards Review

By Allison Martin, Posted: May 30, 2016

When was launched 20 years ago, few could have envisioned how far the company would come. What was once an online specialty bookstore is now an Internet juggernaut that sells nearly anything and has made major inroads into ... Continue reading

How Much Do Shell Cards Really Save on Gas?

By Allison Martin, Posted: April 20, 2016

There is an endless amount of gas cards on the market, and practically every major gas station, including Shell, has options to choose from. In fact, Shell offers two options for gas cards for consumers. Continue reading