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Message
Writing a check against a credit card account - is there a catch?
Posted on 9/15/17 at 10:22 am
Posted on 9/15/17 at 10:22 am
I got some kind of promotional mailer from Chase stating I can write a check against my Sapphire card for up to $15,000 with 0% APR until November 2018. It says I can deposit the check straight into my checking account if I want.
Is there some catch to this? Why wouldn't I just put the 15k into an investment, cash it out next year to pay Chase back at no interest and pocket the difference? Even taking risk into account, I could just drop it in a CD and be guaranteed free money right? I feel like there must be a catch somewhere because otherwise they're just giving money away.
Is there some catch to this? Why wouldn't I just put the 15k into an investment, cash it out next year to pay Chase back at no interest and pocket the difference? Even taking risk into account, I could just drop it in a CD and be guaranteed free money right? I feel like there must be a catch somewhere because otherwise they're just giving money away.
6
Posted on 9/15/17 at 10:45 am to Huey Lewis
quote:
Why wouldn't I just put the 15k into an investment, cash it out next year to pay Chase back at no interest and pocket the difference?
Margin trading never goes wrong ever.
Posted on 9/15/17 at 11:35 am to Huey Lewis
There's also a fee generally involved. Zero APR but you still have to adjust for the fee.
Posted on 9/15/17 at 11:46 am to Huey Lewis
You'll be paying a minimal fee which is around $20 I think. You need to call Chase and make sure exactly what fees they will charge you. If it is something minimal like that, then putting that money in a high interest checking/CD is not a bad idea. I would be careful about putting it into riskier investments though.
Posted on 9/15/17 at 12:00 pm to Huey Lewis
Because even if the fee is $20-25 it is a bit of a Hassel to make that $80 in interest, I have more productive ways to spend my time.
Posted on 9/15/17 at 12:11 pm to cave canem
If it's 1.5% on a CD with a $20 fee that's $205 profit for filling out a check and a deposit slip. Even if it took 2 hours of my time that's over $100 an hour. If I could write checks against a credit card and deposit into CD's an unlimited number of times I could quit my job.
Posted on 9/15/17 at 12:38 pm to Huey Lewis
Yes, but you can't do it unlimited times
Also you described getting the money, now put into reverse and do it again, you are at 50 an hour, might be great for you but it is a waste of valuable time to me just as it would be at 100 an hour for that short a time period.
Judging by the amount of "if's" in your post you must be real sure about it which means more time researching, whoops now you are down to 40 an hour, see how valuable time flies.
This is not even allowing for the unforseen.
Now for the potentially bad, should the need to borrow money arise the dent in credit is likely going to cost you.
All just my opinion for me in my situation, yours may be different.
Also you described getting the money, now put into reverse and do it again, you are at 50 an hour, might be great for you but it is a waste of valuable time to me just as it would be at 100 an hour for that short a time period.
Judging by the amount of "if's" in your post you must be real sure about it which means more time researching, whoops now you are down to 40 an hour, see how valuable time flies.
This is not even allowing for the unforseen.
Now for the potentially bad, should the need to borrow money arise the dent in credit is likely going to cost you.
All just my opinion for me in my situation, yours may be different.
Posted on 9/15/17 at 12:44 pm to cave canem
My point was that cashing the check and depositing into a CD would take no time at all - probably 15 minutes or less - but even at 2 hours it's over $100 an hour.
Posted on 9/15/17 at 12:49 pm to Huey Lewis
I think people are dramatically underestimating the fee that will accompany the check. I wouls assume it is treated as a cash advance which is probably hit with a percentage fee of 3%. Immediately eating up any interest gains. Maybe you get to net zero if you get rewards for it. But usually cash advances are excluded.
Posted on 9/15/17 at 1:00 pm to Huey Lewis
quote:
My point was that cashing the check and depositing into a CD would take no time at all - probably 15 minutes or less - but even at 2 hours it's over $100 an hour.
Bet you $200 it does not work out that way.
Posted on 9/15/17 at 1:00 pm to RJSambola
quote:
I think people are dramatically underestimating the fee that will accompany the check. I wouls assume it is treated as a cash advance which is probably hit with a percentage fee of 3%. Immediately eating up any interest gains. Maybe you get to net zero if you get rewards for it. But usually cash advances are excluded.
+1
They usually charge between 3-5% for the transaction, so at 15K @ 3% you are already out of the money if you put it in a 1.5% CD.
Best option is to go put it all on black.
Posted on 9/15/17 at 1:03 pm to RJSambola
quote:
I think people are dramatically underestimating the fee that will accompany the check. I wouls assume it is treated as a cash advance
Or a hefty origination fee, banks, especially those that are CC issuers don't do anything for free.
Posted on 9/15/17 at 1:25 pm to ODP
quote:
Bet you $200 it does not work out that way.
I agree, hence why I was asking if there's a catch to begin with.
quote:
They usually charge between 3-5% for the transaction, so at 15K @ 3% you are already out of the money if you put it in a 1.5% CD.
This makes alot more sense than a $20 fee IMO. In fact I was just able to check the paperwork - the fee is the greater of $5 or 4%
Posted on 9/18/17 at 8:49 am to Huey Lewis
Sounds exactly like a balance transfer offer on new card accounts. Send you a couple of checks with your new card but only have a certain amount of time to use the checks. Might be a 0% APR interest rate, but there's probably a flat 2 or 3% balance transfer fee that you'll get charged.
Posted on 9/18/17 at 10:11 am to Tiger Prawn
Some cards (Chase Slate) offer 0% and no fees on balance transfers when the card is new.
Posted on 9/18/17 at 10:40 am to VABuckeye
But that is strictly for balance transfers, not an open check to deposit into your bank account.
And basically they are just making the bet that if you already carry a balance you will keep doing it, but this time on their card.
And basically they are just making the bet that if you already carry a balance you will keep doing it, but this time on their card.
Posted on 9/18/17 at 11:09 am to RJSambola
Yeah. Was more of a response to tiger prawn than a post directly related to the OP. 
Posted on 9/18/17 at 12:36 pm to Huey Lewis
The 0% APR is not for a cash advance, that is for credit purchases. At least that is the way all the ones I've seen work.
The "cash advance" or check as they call it, is usually at 3-5% immediately followed by the APR %. That's how they get you.
The "cash advance" or check as they call it, is usually at 3-5% immediately followed by the APR %. That's how they get you.
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