How to Make Money With Balance Transfers And High-Yield Savings Accounts
If you have good or excellent credit, you may get a lot of balance transfer offers from your credit card companies. When you get these offers in the mail, you may be able to make a little extra cash by using them in connection with a high-yield savings account. This can only be done on balance transfer offers that give you a check for the transfer instead of requiring a credit card number for the balance transfer.
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Instructions
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Browse your balance transfer offers for your credit cards to identify the cards with the lowest interest rate and the lowest fees. Some of the interest rates will only be for a promotional period, such as six months or one year. You want to pick out the offers with the best interest rate, lowest fees and best transaction period. The best offers are the ones that offer zero percent for a specific period. Be sure to watch for high balance transfer fees.
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Request balance transfer checks from the credit cards you have identified as your best options. Usually, you can do this by calling the customer service number on the back of the card or by using the credit card website.
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Use a finance-related website, such as Bankrate.com or Bankaholic.com, to identify the high-yield savings accounts that offer the current highest rate. While high yield accounts have had interest rates as high as five percent, the current rates for June 2011 are just over one percent. Some financial institutions that offer these accounts include ING Direct, FNBO Direct and Ally Bank.
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Open a high-yield savings account with one of the financial institutions, if you do not already have one open. You may need to make you initial opening deposit with your personal checking account. Opening account amount requirements vary by financial institution.
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Write your balance transfer checks out to yourself and deposit them into your high-yield savings accounts. Only write checks for the offers that have an interest rate that is lower than the interest rate on your savings account. Otherwise, you will not make any money on the transaction. Leave the money in the savings account to earn interest until your promotional balance transfer rate is nearly expired.
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Take the money out of the high-yield savings account, minus the extra interest money you earned, and pay off your credit card before the promotional rate expires.
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