Rolling Forward Debt Infinitely: Manufactured Spend Perpetual Motion Machine

This was extremely important to me when debit cards earning miles existed. I would use the float off the CC to dump into a bank account and then use that bank account to churn more MO off of the money in the bank, and then drop that money in to pay the CC and then buy more Prepaid to fund the bank account.

All of this is also why I don’t (right now) see the need for an emergency fund, I could create one limited by only the access to VGC and the ~1.2% fee of buying an liquidating cards. (rewards would offset this) This is a valid strategy for someone who needs cash right now.

How about this @TripleB - just take a large BT and continue playing the BT game. You have your perpetual debt right there, costing nearly $0 if you do it right, and can MS the cards without needing to do the complex scheme you’re proposing. You’re saying buy $5k (random number) of gift cards with card A, then buy $5k with card B, then use the card A gift cards to pay off card B’s balance, and vice versa? What’s the difference? Either way you have $10k of debt and $10k of gift cards. Staggering them only helps when you don’t have the capital to cover in case you get called on.

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BT offers are typically once per card.

0% no fee offers have been rather limited in supply. I’m only seeing 8 on here, (with at least a 1 year term), mostly from small regional banks so your credit limit won’t be as high.

http://www.magnifymoney.com/blog/balance-transfer/no-fee-balance-transfer-credit-card1322859387/

With the perpetual MS machine you can get it running as long as you have a big credit limit on two cards and you earn cashback too.

You can do both, but having this much debt and still spending a huge amount will probably spook banks and some automatic AA may be taken.

I did a few huge BT togethers in a miniAOR a few years ago, with the exception of the smaller banks, almost all the banks had some adverse action automatically taken (cutting my limit to my current balance effectively maxing out the cards was most common but BOA closed all my accounts including one that I BT too. That one was really bad as the amount due was 7000 and my credit limit was 0 for a closed card, so my utilization for that one was infinite. I had to keep it though as I had already paid the BT fee up front)

My credit plummet to low 500s and I started get bankruptcy junk mail (It’s amazing how the mail you get changes with your credit score). Paid it off as the 0% ended and as expected credit rubber banded right back to where I started

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If this happened purely from taking large BTs, you must have already had a horrible score to begin with. I currently have $47k in 0% BTs and my scores are all in the high 700s, low 800s. I am reporting approximately a 5% utilization ratio. That’s on top of normal monthly spending, which is always a few grand reporting across a couple of cards.

Please don’t fear monger based on your singular experience. You need to provide more context. I think about 99% of the people on this forum will agree that large BTs, when done right, will not shoot a score into the “low 500s.” I am my own personal proof that that isn’t the case.

Even with a two card file, and one maxed out, this wouldn’t happen.

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I appreciate your insight into this; I knew I wouldn’t do this this a year ago after reading a blogger’s experience on the AA he got from one of the big banks that affected all his other MS activities. Like you said, his scores plummetted as well although it bounced back to mid 700s when he paid his CC debts. I’ve accepted the fact that I cannot do all and I just have to pick those that are manageable (to me) and keeps me under radar.

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Nah my credit was fine before, no blemishes besides the high utilization.

Maybe a bit more context would help, My intent was to get as much money as possible so I also consolidated a bunch of credit limits before hand. Chase, Barclays, and Discover had no problem moving 90% of my credit limit to one card.

My utilization went to about 50% initially vs. your 5% plus again some cards had a credit limit of 0 after they were closed. I doubt your account would even be glanced at with 5% utilization.

Utilization might be the killer here I would say either open up some extra cards from smaller credit banks or don’t do all the BT’s at once like me.

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I find it hard to believe that 50% utilization would bring someone into the “low 500s” on its own. I had 80% utilization when I was in my early 20s and my scores were in the mid-600s.

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That’s probably the issue, it was at least two years long ago now so, I don’t recall how low it fell, mid 500s might be more accurate, but who cares about the exact number if’s just a credit karma FAKO anyways.

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Gotcha. FAKO is a good piece of info, thanks.

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