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A post by mm over at http://www.pfblog.com got me thinking about my credit card arbitrage deals and the “universal default” clause most credit cards have these days.

I began to wonder what would happen if some deadbeat’s credit file got merged or added to my pristine credit file.  Will credit card companies assume those bad loans/debts/missed payments were mine then declare “universal default” and hike my rate up to 30 percent?

It’s pretty scary since I’m currently floating nearly $40,000 at zero percent on various cards.  Of course, if push came to shove I would quickly pay off the debt by unwinding the arbitrage deals but it’s definitely something to consider when doing these deals.

The problem would easily be solved if consumers were allowed to LOCK THEIR CREDIT FILE but recent legislation has muted that option and politicians aren’t eager to help out consumers any time soon so it’s a potential pitfall.

I’ve got another 30 days of interest free money on my first posted arbitrage deal so I’m looking for the next big deal.