I’ve been receiving more and more credit card balance transfer offers in the mail recently and I had pretty much written off credit card arbitrage a while ago since banks had removed caps on their fees for balance transfers.

With the existing credit crunch and depositors skittish about keeping more than 100k in any FDIC bank, I’m wondering why and how banks are able to loan out so much money at low interest rates when they supposedly don’t have any money to lend out.

In any event, I’ll likely borrow 25k at 0.99% and try to turn a few grand out of it fairly quickly and boost my existing 40k arbitrage up to 60k+ to churn some quick profits and improve my cash flow this next quarter.   The fee is capped at $99 so I’m looking at paying $200 in interest and fee to hopefully churn out 2k in profits.   Not bad for a couple of months worth of work if all things go well…..