I'm not sure when this took place, but prior to the credit market crash, you were able to get risk-free savings accounts at around 5% interest. As long as your

I'm not sure when this took place, but prior to the credit market crash, you were able to get risk-free savings accounts at around 5% interest. As long as your credit-card rates were below 5%, I think you could call it arbitrage, though it's value is lost in this case since the startup was burning the cash, not just letting the arbitrage run its course and used the proceeds. This wasn't a particularly uncommon scheme in the mid-2000's with easy credit and high savings rates. A rough calculation shows that with a zero-interest card (you could generally negotiate 0% cash-advance checks as well) and a 5% savings account, you could make in the ballpark of $450 over the course of a year per 10k borrowed. If you had good credit and could quickly get access to 100k, you'd be making a few thousand for a not much more than a days work + some short-term damage to your credit score, though at that time, credit scores didn't really mean all that much.