In the past few days, I covered the concept of the arbitrage program, some of the common pitfalls, options for more restrictive programs, and savings options. So how do you mechanically execute the program?
Execution is highly personal. It depends on your own bill paying system. If you have a system that works, there may be no reason to change it. Do what works.
The system I use relies on my favorite video game – Microsoft Money.
When I get a balance transfer offer, I deposit the cash in my checking account.
Once the check clears, I go to the ING website and transfer the funds from my checking account to ING.
Next I schedule monthly automatic transfers from ING to my checking account for the minimum payment to the credit card. Now, every month for the next 6-12 months, the minimum payment for the credit card will show up in my checking account.
Then I schedule one more automatic transfer from ING to my checking account. I schedule this transfer for two weeks before the 0% rate expires. It is for the entire remaining balance of the balance transfer.
Now that all the transfers are in place at ING, I go to Money, my banking software. Because I use electronic banking through Money, I can schedule automatic payments months in advance. I set up the monthly minimum payment to the credit card company, and the final payment.
The entire process takes about 30 minutes, including the walk to the bank to make the initial deposit. With everything set up, I just have to check my statements each month to make sure there are no problems, which I would be doing anyway.
And I can sit back, and wait for the interest to come in.
Here is a sample timetable. The dates, offers, and amounts are made up.
2007-01-03: Receive 12 month 0%, $20,000 Balance Transfer offer. The minimum payment is due on the 20th of each month
2007-01-03: Deposit balance transfer check in checking account
2007-01-10: Verify that the funds are available in my checking account
Here are the transfers I would initiate from the ING site:
And here are the ones I initiate through MS Money:
And then I can earn about $75-$100 a month in interest. Not bad for a half hour’s work.