Top 3 Reasons Why You Should Avoid Credit Card Arbitrage

1) You don’t have the discipline to not spend the 0% money. You shouldn’t be playing this game if you’re living from paycheck to paycheck or have a negative networth. There’s a good chance that you might find the money too tempting and spend it. This can be very dangerous given that you’d probably have an outsized credit line.

2) You are a bit forgetful about financial matters. You shouldn’t do credit card arbitrage if you occasionally pay your bills late. Companies are allowed to jack your 0% rates to 20+% with only one missed payment, so organization and attention-to-detail is key. Later in the guide we’ll go over how to set things up so everything runs like clockwork. I would like to note that doing arbitrage has forced me to straighten out my financial life.

3) You’ll need a significant loan soon, such as a mortgage. Credit card arbitrage takes a toll on your credit rating in several ways. During the fury of application, a “hard pull” will dock around 5 points, however not all pulls show up on all agencies. This is temporary and the penalty will be removed after six months. Having a high credit utilization also hurts your credit score. The penalty is almost non existent below 50% utilization and skyrockets 90% and above. So the credit score damage can be somewhat controlled In general though, it is advisable not to do credit card arbitrage if you’re applying for a mortgage within a year or so.