Credit Card Cash advance into a CD

[s0198362]

I received an offer for approx $10,000 cash advance in my credit card at 0% APR till April 2024.
A 3% fee applies.

Is it a terrible idea to put this into a 12 month CD at 5% interest (or better)?

$200 profit - is it worth the effort?

[yachi]

It would not be worth it to me.  If the fee is applied on the front end, it's only $185.

There are heavy penalties if you don't pay off the balance before the expiration of the 0% APR, so you'll want to have access to the $10K before 12 months from now.  You also have penalties for cashing out the CD early.

Having to remember to pay a bill that's due 12 months from now or I start losing, what? $160 a month (20% interest)? 240 a month (29% interest)? is a stress that I would want to go away.  Maybe even a stress that I'd pay to go away.  You might not be like me, but realistically, you're looking to make an amount of money similar to what would be charged if you forget for just one month to pay differently than you've been paying for the last 11 months.

[jnw]

Here's something you could do instead; I am going to do the following starting in a few days when I get my Discover It Cashback card in the mail:

Sign up for a new card, e.g. Discover It Cashback, and you get 0% APR for 15 months on purchases.  Instead of paying it off each month pay the minimum and put all that extra cash into federal money market.  Run the card up to the limit and pay it off a couple weeks before the 0% APR promotion ends (in about 15 months).

With the Discover It Cashback, you also get 5% cash back on rotating categories, but the first year is double cash back so 10% cash back.  You can buy Walmart/Sams club gift cards in any quarter usually with some hackin', and therefore get 10% cash back at walmart/sams year round (up to $1500 in purchases each quarter).  You also get $100 sign up bonus with a friend's referral link.  Also get 2% cash back on any other purchases for the first year (due to double cash back), 1% otherwise.

[sonofsven]

I've considered it but decided it's not for me.
With $10k you can easily make more than $200 in a year by doing bank sign up bonuses, which is admittedly more work than just parking it in a CD.
Also you can get 4% or more in a high yield savings account where your $10k is still accessible.
I think a better way to do it would be to first open a cc with a long 0% timeline, then open a bank account that allows funding with a cc, then take the money from the bank account and buy your CD, making your minimum payments on the cc of course, and pay it off in full before the deadline.

[jnw]

I think a better way to do it would be to first open a cc with a long 0% timeline, then open a bank account that allows funding with a cc, then take the money from the bank account and buy your CD, making your minimum payments on the cc of course, and pay it off in full before the deadline.

jinx :) you owe me a diet coke :)