Creative Financing or Dumb Idea?
So, I always get those "checks" in the mail from the Credit Card company for 0% financing for 12 months. I'm trying to find a way to use them to help lower my amount in a property akin to using OPM.
Basically, I will cash the check into our account for $10k (the check just says can't be higher than our credit limit on that card). There is a 2% fee and there is this written in the terms:
"Special Notice to customers who pay their entire balance in full each month:
If you always pay your balance in full each month, you do not pay interest on your purchases. This is called a grace period. Please note that if you take this offer, you will lose your grace period. If you transfer a balance to this account, you will begin paying interest on all new purchases, even if you pay your purchase balance in full each month. To avoid paying interest on your purchases, you must pay both your transferred balance and your purchase balance in full."
What does that mean? I will not be transferring, but using the checks, so does that apply?
The strategy is to use the $10k for closing costs on a property and pay it back with part of the rent money. For example, the first month balance will be $10k, we will pay $400 towards the card and leave us with balance of $9600, etc. At the last month, we will have a balance of $5200 and then we will either pay it in full at that time or use the amount from another credit card, for example Discover that keeps sending me $5k checks at 0% plus 2% fee. Then continue with the $400 until that is paid off.
I see the total OOP expenses as $200 fee + $100 fee +$200 (extra leftover from the $5.2k)= $500 OOP (plus repairs on that property). We have the closing costs in our account, but I was just trying to think creatively.
Any thoughts?Have you tried this before? Does it work, is it worth it? What does the special notice mean (we pay our balance in full each month, usually about $40 for website fees and that's all on that card)?
Thanks!