My checks came with my statement. I just called CS and they claim that my fee is "3% of the balance $5 min, $75 max" I asked for it in writing and she couldn't provide it, assuring me she was being truthful and that the call was being monitored. She also told me there were different types of accounts and that some indeed had no cap on the fee.

This offer is really good if it is real.

I do a little bit of interest rate arbitrage... OK, actually, a lot. Not a lot of separate offers, but rather a large amount of balance in total. I've mostly been taking advantage of the introductory balance transfer offers where either the transfer fee is always capped at $75-$99 (getting rarer now that many banks are moving to no cap on the 3% balance transfer fee); or where the introductory balance transfer offer includes a provision for no balance transfer fee as part of the offer. And I always save hard copy of the terms & conditions....

If you're thinking of jumping into these waters, make sure that you take into account the fact that you will be paying income tax on the interest that you earn, but you won't be able to deduct the interest that you pay. For me and I expect for many FT'ers (based on our marginal federal+state interest tax bracket), that difference means you can't necessarily profitably arbitrage the difference between online savings accounts paying 5% taxable interest vs. credit card balance transfer offers at a non-deductible 3.99% rate. However, there's pretty decent profit to be had when the balance transfer rates are 1.99% or lower; and I have quite a large balance at 0% for 12 months. Since I already own a house and expect to buy my next car by writing a check, I'm not too worried about any temporary impacts to my credit score for having maxed out some credit card credit lines.

To me, it doesn't make much sense to deal with non-zero percent balance transfer offers or ones with transfer fees, unless one has some significant balances in other accounts with higher APRs or soon to have higher APRs and cannot pay those right away.
Just take advantage of 0% purchase rates for 12 months (there are many offers) and continue to charge all the expenses up until 6 months and stop using the card, just pay the minimum +$1 each month and pay full in the 11th month or so. One does not lose much by doing this compared to 0% BT and the hassle is much less.

Is there a way to NEVER receive convenience checks. I have never used one, and I always shred them. Convenience checks are a disaster waiting to happen!

Good point about the tax impact, BUT I believe that since you're engaging in an income-producing activity (arbitrage), even though it doesn't rise to the level of a trade or business, you could at least deduct the interest paid as a miscellaneous itemized deduction to the extent that it (plus other expenses that fall into this "2% of AGI" misc. category) exceeds 2% of your AGI, and if you have enough deductions to itemize (i.e., your itemized deductions total more than your standard deduction).

However, depending on your particular income situation, the 2% of AGI threshold can be hard to leap over (and you only derive any benefit from the amount of deductions that exceed the threshold anyhow). Something to think about, though.

You may call your issuing institution and request that they cease mailing them to you.

Of course my latest batch of checks that I got today for the accounts I closed last wee had caps:mad:

And, this is an excellent idea. @:-) Indeed, "convenience" checks are a disaster waiting to happen, identity theft wise. That is why there is legislation around to ban them.

You can also opt out of pre-screened offers which often include the deadly checks.

I wrote one from US Bank off my NW card last night ... will cost me $7.50 in fees on the $250 check, I get $250 for 9 months at 1.99% (no big deal there) ... and they give me 1,000 NW miles ... some credit card companies from time-to-time will send out checks with bonus miles offers, and I wouldn't necessarilly want to miss out on those.

I don't know what your profession is, KathyWdrf, but I'll be quick to note that I don't play a tax accountant either on TV or on the Internet. :)

That said, I believe that interest paid that is allocable to investment properties should be deductible against investment property income without being subject to the 2% AGI threshold -- I think it is intended that other non-interest investment-related expenses (e.g., financial advisor fees, books, education courses, etc.) would be subject to the 2% threshold. For folks playing the arbitrage game, they should definitely have C/C balance transfer related investment property income that exceeds C/C balance transfer related investment property interest in any given year, or they're playing the arbitrage game backwards!

However, anybody reading this thinking about taking any kind of substantive action should go consult their tax advisor.

(Personally, I prefer to be quite conservative in my income tax filings -- although I agree with the sentiment that I'm not required to pay one more dollar in taxes than I am legally obligated to, I also prefer to keep all potential interactions with IRS auditors in the future to be short and sweet. If I had margin loan interest that was reported to me by my stock broker on a convenient end-of-year form, I wouldn't hesitate to deduct it to the extent allowed. But I'm somewhat more hesitant to have to attach lots of monthly credit card statements highlighting exactly how much was paid in interest each month.)

Better yet, not to have activities that would raise the flag
 

in the IRS scanning system by claiming some items that are marginally beneficial in terms of cutting the tax bills, but potentially add scores to the flagging system.

While pshuang wants to keep future encounters with IRS short and sweet, I would prefer not to meet with them at all!

I am just wondering How many people READ THE SMALL PRINT

I read everything before I use or buying anything that is going to have my paying out the nose.

We can all complain about Chase and other Credit CArd BUt they do supply that to everyone if you choose not to read it them it is Your Fault

I have a chase acct the fees for BT's depending on what I use whether it is Check or over the phone

3%/5 min/75.00 max
3%/5 min /99.00max
3%/5 min/999.00 as it was put to me no max set fee

if you are paying 8.99f apr and you get a 0.00f apr for lets say 12 months to 18 month with a Max fee of 75.00 or 99.00 that isnt bad

All i can say is read the FINE PRINT then you woudnt be at this discussion. Or call and Ask.. I always call before I do any BT..

Okay, I may be looking into a descent into Hell, but, today's mail brought a Chase offer for a 20K "convenience" check at 0% APR until my "November 2007 statement opening date" (which appears to be a very sneaky way of trying to fool the reader into thinking that they will have until November to pay off the cash advance at 0% when the real deadline is actually the day the October statement closes--and before you get the October statement).

Fee is capped at $75.00

Should I think about depositing the 20K into a Money Market, earning, say, $1,000 in interest, clearing $925 after fee (and paying maybe $200 extra in taxes)? @:-)

Or, is there some hidden drawback. :confused:

Weirdly, the same mail brought a 1.99% offer on a different Chase account with the fee capped at 3% or $75 for 10K loan. Same tricky language about how long the low interest lasts. Don't think I'll bite on that one. :td:

The precise math matters a lot; you wouldn't want to be sloppy.

In this case, if your November 2007 statement opening date happens to be October 15 (average halfway through the month), you'd only have 4 months 3 weeks of earning; actually, you have even less time than that when factoring in that the $20K check won't clear instantly, and on the other end, it'll take some time for you to pay off the credit card. Earning $1000 in interest on a $20K deposit into a money market account for 5 months would require something like a 12% APY. (Calculating that 12% number requires basic high school algebra; but confirming it should be reasonably easy even for those who flunked high school algebra. :) ) You would actually need an even higher APY than that to earn the full $1000 since you would have to be paying back part of your Chase credit card balance with every statement. (True, you don't have to literally have to make withdrawals from the $20K in the money market account to make your credit card payments. But if you had the cash in your checking account to make those payments, then that cash could have been deposited into the money market account and earning that same APY if you weren't playing the balance transfer game, so it works out the same as if you were making credit card payments out of the money market account balance.) I don't know of any legitimate insured money market accounts out there paying more than 12%. If you do, you're wasting your time thinking about arbitraging credit card balance transfers. :)

I would figure your situation as: $20K for 4.5 months at 5.05% APY [what I get from HSBC Direct] = ($20K*(4.5/12)*0.0505) = $378.75. Then multiply by 1 minus your marginal combined local+state+federal income rate to figure out what you keep after taxes; then subtract the $75 convenience fee (assuming you decide to not deduct it). So if your combined marginal income tax rate is 40%, you would net ($378.75*(1-0.4))-$75 = $152.25.

(The above calculations don't try to take the monthly repayments on the $20K credit card balance into account; that's effectively noise that will only slightly reduce the net.)

Definite not the $725 net that you were thinking.

Thanks for the help, pshuang. ^

My high school algebra teacher would be giving me extra homework (if he were still alive).

You are right of course. When I did the quick math in my head I figured 5% simple interest for a year, but forgot to adjust for the short period the offer is available.

The offer looks a lot less attractive now. Good thing I have a shredder here. :)