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Wow... that takes balls. Getting 0% introductory rate credit cards, and taking a cash advance... and then putting the cash in a bank account that pays interest.

Wow... that takes balls. Getting 0% introductory rate credit cards, and taking a cash advance... and then putting the cash in a bank account that pays interest. Of course, if the business fails - as it did in the author's case - then you're stuck with all of the debt and a broken credit record, but it's all about taking risks right?

rgraham 15y ago
Taking a calculated risk is not the same as playing roulette. Poor choices should not be glorified in the name of entrepreneurial risk.
Duff 15y ago
As long as you have the ability to start earning quickly and are smart about it, you can get through that without breaking your credit record. The key to dealing with credit cards is understanding the terms -- it's all written down in a little document that nobody reads. In particular, you need to understand precisely how each lender defines "default". "Default" == no more 0%. Also, this guy had the business networking chops required to jump into consulting gigs immediately upon declaring failure. The exit strategy is essential. I did something similar to this with a house that I needed to get out of quickly. I borrowed $52,000 over several cards and ended up using $40k. The $12k was used as a pool to make the automatic payments from. End result? The value of the home increased by $80k.
ebiester 15y ago
We're very fortunate in this country for a liberal bankruptcy law, at least for when it comes to taking this kind of risk. Now, this kind of risk won't work as well in this economy. Credit cards have severely curtailed their introductory rates. However, in 2002-2007 I knew people who augmented their income multiple times by this same arbitage and putting the money in low risk investment vehicles. Once the intro rates were finished, they would pay back 100% and close the card, moving on to the next one. The credit card reform act will make this more difficult in the future.

rgraham 15y ago

Taking a calculated risk is not the same as playing roulette. Poor choices should not be glorified in the name of entrepreneurial risk.

Duff 15y ago

As long as you have the ability to start earning quickly and are smart about it, you can get through that without breaking your credit record. The key to dealing with credit cards is understanding the terms -- it's all written down in a little document that nobody reads. In particular, you need to understand precisely how each lender defines "default". "Default" == no more 0%. Also, this guy had the business networking chops required to jump into consulting gigs immediately upon declaring failure. The exit strategy is essential. I did something similar to this with a house that I needed to get out of quickly. I borrowed $52,000 over several cards and ended up using $40k. The $12k was used as a pool to make the automatic payments from. End result? The value of the home increased by $80k.

ebiester 15y ago

We're very fortunate in this country for a liberal bankruptcy law, at least for when it comes to taking this kind of risk. Now, this kind of risk won't work as well in this economy. Credit cards have severely curtailed their introductory rates. However, in 2002-2007 I knew people who augmented their income multiple times by this same arbitage and putting the money in low risk investment vehicles. Once the intro rates were finished, they would pay back 100% and close the card, moving on to the next one. The credit card reform act will make this more difficult in the future.