Comments on: Banks Too Generous With Credit Now Too Stingy, Oh Puleeze! http://www.getrichslick.com/banks-too-generous-with-credit-now-too-stingy-oh-puleeze/711/ Getting Rich Slick® has never been so easy... Sat, 28 Jan 2012 05:13:05 +0000 hourly 1 http://wordpress.org/?v=abc By: RichSlick http://www.getrichslick.com/banks-too-generous-with-credit-now-too-stingy-oh-puleeze/711/comment-page-1/#comment-40022 RichSlick Mon, 13 Oct 2008 17:41:20 +0000 http://www.getrichslick.com/2008/10/11/banks-too-generous-with-credit-now-too-stingy-oh-puleeze/#comment-40022 Matt, I can't talk you into/out of what you're doing. If it meets your risk/reward ratio and personal goals then it sounds like you've got a plan and a way out. Believe me, I hate giving up about 50k worth of arbitrage cash but I don't want to take any chances now; we are on the edge of a cliff here and tossing the baby up and down while on the edge is only something that Michael Jackson would do ;) Best of luck. Matt,

I can’t talk you into/out of what you’re doing. If it meets your risk/reward ratio and personal goals then it sounds like you’ve got a plan and a way out.

Believe me, I hate giving up about 50k worth of arbitrage cash but I don’t want to take any chances now; we are on the edge of a cliff here and tossing the baby up and down while on the edge is only something that Michael Jackson would do ;)

Best of luck.

]]> By: Matt http://www.getrichslick.com/banks-too-generous-with-credit-now-too-stingy-oh-puleeze/711/comment-page-1/#comment-40016 Matt Mon, 13 Oct 2008 16:47:46 +0000 http://www.getrichslick.com/2008/10/11/banks-too-generous-with-credit-now-too-stingy-oh-puleeze/#comment-40016 I'm using reward checking accounts, which are giving me 4.5%. I’m using reward checking accounts, which are giving me 4.5%.

]]> By: RichSlick http://www.getrichslick.com/banks-too-generous-with-credit-now-too-stingy-oh-puleeze/711/comment-page-1/#comment-39998 RichSlick Mon, 13 Oct 2008 14:10:59 +0000 http://www.getrichslick.com/2008/10/11/banks-too-generous-with-credit-now-too-stingy-oh-puleeze/#comment-39998 Do you have this money in savings accounts or CD's? This won't be the last time arbitrage will be around. I actually expect 0% offers to come roaring back in about 4 to 6 months so the economy can get "rolling" again. I am concerned that we may have more bank failures and have a huge mess if things don't improve in which case zero percent offers won't come back for a long time. I'd say we're at a 50/50 point. On the one hand we may fall into the abyss, on the other we may recover. Personally, I don't want to be in debt if it's the abyss as cash on hand will be king (along with gold & silver). If we do get out of this mess then arbitrage will return back and I'll jump back in. It's a matter of waiting a few months to get the answer. Do you have this money in savings accounts or CD’s?

This won’t be the last time arbitrage will be around. I actually expect 0% offers to come roaring back in about 4 to 6 months so the economy can get “rolling” again.

I am concerned that we may have more bank failures and have a huge mess if things don’t improve in which case zero percent offers won’t come back for a long time.

I’d say we’re at a 50/50 point. On the one hand we may fall into the abyss, on the other we may recover.

Personally, I don’t want to be in debt if it’s the abyss as cash on hand will be king (along with gold & silver). If we do get out of this mess then arbitrage will return back and I’ll jump back in.

It’s a matter of waiting a few months to get the answer.

]]> By: Matt http://www.getrichslick.com/banks-too-generous-with-credit-now-too-stingy-oh-puleeze/711/comment-page-1/#comment-39873 Matt Mon, 13 Oct 2008 03:29:40 +0000 http://www.getrichslick.com/2008/10/11/banks-too-generous-with-credit-now-too-stingy-oh-puleeze/#comment-39873 The 20 years FDIC thing definitely makes me think. I do have a lot of cash available, but it is mostly in banks (all under FDIC limit) and spread between 3 credit unions, one bank and my mattress. 1-3 don't worry me unless coupled with 4. If I get a rate change or credit limit change I'll just pay the card off right away. They might squeeze a few pennies of interest out of my while the funds transfer, but it seems like a viable risk. I currently have about $60k in credit card arbitrage, and I'm pretty hesitant to give it up, but I've definitely considered it with current events. Any other thoughts to sway me? The 20 years FDIC thing definitely makes me think. I do have a lot of cash available, but it is mostly in banks (all under FDIC limit) and spread between 3 credit unions, one bank and my mattress. 1-3 don’t worry me unless coupled with 4. If I get a rate change or credit limit change I’ll just pay the card off right away. They might squeeze a few pennies of interest out of my while the funds transfer, but it seems like a viable risk. I currently have about $60k in credit card arbitrage, and I’m pretty hesitant to give it up, but I’ve definitely considered it with current events. Any other thoughts to sway me?

]]> By: RichSlick http://www.getrichslick.com/banks-too-generous-with-credit-now-too-stingy-oh-puleeze/711/comment-page-1/#comment-39868 RichSlick Mon, 13 Oct 2008 01:58:25 +0000 http://www.getrichslick.com/2008/10/11/banks-too-generous-with-credit-now-too-stingy-oh-puleeze/#comment-39868 The risks: 1. Credit card company arbitrarily cuts credit limit thereby making you "over the limit" and charging "over the limit" fees. 2. Credit card company arbitrarily raises rate on your arbitrage debt claiming your FICO dropped because of credit line cuts or other reasons. 3. Credit card company merges with other bank making terms and conditions void. 4. FDIC isn't REQUIRED to pay you back tomorrow or next week, they have up to 20 years to pay you back. If banks start failing, it'll take 20 years to make everyone whole. 5. US Government buying ownership stakes in bank may alter cash withdrawal limits or payment schedules. I don't know your specific situation so I'm not sure what else may impact you but these are a few to consider. The risks:

1. Credit card company arbitrarily cuts credit limit thereby making you “over the limit” and charging “over the limit” fees.

2. Credit card company arbitrarily raises rate on your arbitrage debt claiming your FICO dropped because of credit line cuts or other reasons.

3. Credit card company merges with other bank making terms and conditions void.

4. FDIC isn’t REQUIRED to pay you back tomorrow or next week, they have up to 20 years to pay you back. If banks start failing, it’ll take 20 years to make everyone whole.

5. US Government buying ownership stakes in bank may alter cash withdrawal limits or payment schedules.

I don’t know your specific situation so I’m not sure what else may impact you but these are a few to consider.

]]> By: Matt http://www.getrichslick.com/banks-too-generous-with-credit-now-too-stingy-oh-puleeze/711/comment-page-1/#comment-39867 Matt Mon, 13 Oct 2008 01:21:39 +0000 http://www.getrichslick.com/2008/10/11/banks-too-generous-with-credit-now-too-stingy-oh-puleeze/#comment-39867 Could you explain a little more about the risk of arbitrage debt in the current situation? I have Credit Card arbitrage that is invested strictly in bank accounts under the FDIC limit. I understand the risk of a combined bank and FDIC failure, but I figure that a credit card balance will be the least of my worries if this happens. So aside from an FDIC failure, what am I risking, as long as I ensure that my interest income is at a rate higher than my interest expenses? Could you explain a little more about the risk of arbitrage debt in the current situation? I have Credit Card arbitrage that is invested strictly in bank accounts under the FDIC limit. I understand the risk of a combined bank and FDIC failure, but I figure that a credit card balance will be the least of my worries if this happens. So aside from an FDIC failure, what am I risking, as long as I ensure that my interest income is at a rate higher than my interest expenses?

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