Getting Started Profiting From Credit Cards
It started innocent enough - someone just wanted to shop for products that required credit inquiries all at once, instead of spacing inquiries out every few months. This way they could get a bunch of credit, and all the inquiries would be gone 2 years later. They found out a lot of interesting things along the way (like some credit report services will not count same-day inquiries) which reinforced the benefits of a Profiting From Credit Cards strategy.
Beginning
1) The goal is to acquire as much cash from doing balance transfers as you can while paying the lowest interest rate(promotional 0% APR for 6-12 months on some, 3% APR or less for the life of the balance on others), and with the lowest balance transfer fees(a few are free, most are $50-100). We have found some of the best, and listed them in our Suggested Credit Cards section.
2) Depending on your comfort level, you will most likely want to apply for 10-20 cards, but we have heard of as many as 40 being applied for at one time. You only want to apply for 2-3 cards per issuer(AmEx, Citi, Discover, etc) if you have great credit. You will probably be approved for at least one or two, sometimes three from the same issuer, but eventually you will start getting rejections for ’multiple applications’.
3) Since some credit reporting services used by lenders deduct same day inquiries, you want as many inquiries to hit on the same day as possible. Get started early in the morning(most banks are on East Coast time), and it seems to work best during the beginning or middle of the week. Some applications pull your credit as soon as you submit an online application, some send the application to the "back office" for further processing, and they may not pull credit till later that day, or even a few days later.
Once you have been Approved….
4) Start by doing balance transfers from the cards with the best terms(0%APR, no balance transfer fees). Some applications will ask if you want to do a balance transfer. Choose yes, and then input your banks name and your checking account number that you want the balance transfer to go to. If it doesn’t have the option to do it on the application, you can either do a balance transfer by phone or use the convenience checks they send to you with your new credit card. Just make sure to read the fine print and tell the customer service person that you want to do a balance transfer and not a ‘cash advance’ since cash advances have much higher interest rates.
5) Once you have the cash, you can get started doing whatever creative real estate deals work best for your situation. There are limitations to what kind of deals you can do since your credit will take a temporary hit while your credit cards have high balances. There are also some serious mistakes you must avoid in order to be successful with this strategy. We warn you about the biggest pitfalls, and help you out with tips on making the most of your cash on hand in our Credit Card Due Diligence section.
