The Best Technique For Borrowing Money

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The Best Technique For Borrowing Money: The Quickest Way to Borrow $43,800, Interest-Free

by Mark Skousen, Chairman, Investment U
Thursday, January 5, 2006: Issue #500

There are very few individuals who can lay their hands on $50 grand overnight.
- Jimmy Hoffa

Let’s start the New Year with a bang by taking a look at the best technique I know for borrowing money:

Borrow large amounts of cash instantly with no-hassle “convenience” checks you can use to write yourself a loan.
Maintain a loan that’s personal and unsecured. Unbelievable, but true.
Use the money for any purpose – pay off a high-interest credit card bill or a mortgage, invest in real estate, stocks and other speculations you name it. There is literally no restriction on the use of these no-interest funds.
Repay on an extremely flexible schedule, allowing you to borrow interest-free for months. Pay off as little as 5% a month.

Who offers these incredible, if not irresponsible, loans? Consider that most banks charge 10% or more on personal loans; margin accounts at brokerage firms are around 5%; heck, even the Fed charges 4.5% on its short-term overnight loans to commercial banks.

Borrowing Money in 2006 from… Credit Card Companies?

Believe it or not, a select group of credit card companies – famous for their outrageous fees that would make a loan shark blush – are practically giving money away right now to consumers looking to borrow money.

No, you don’t have to subscribe to my newsletter or a special report to get the details I’m going to give it to you here, right now, as a late Christmas gift. I figure some of you may need the extra cash after spending too much in December.

These Lenders Offer Better Rates Than the Fed!

Several credit card/banking services are offering this deal, including Chase, Bank One, and First USA. They are all involved. I got my Chase Visa, United Mileage Plus Visa, through an airline. I’ve been using it for years, and every couple of months, United Airlines Visa sends me additional “convenience” checks that allow me to write a check to anyone, including myself, up to my credit limit.

Right now, they give me a generous credit line of $43,800, due to my high credit rating. I’m sure some of you can do even better (like Jimmy Hoffa!).

To get these Visa checks, all you have to do is contact United Airlines, Chase, Bank One, or First USA, and sign up for their credit card. In the past I’ve received offers for 3.99%, 0.99%, and now 0%.

There are some borrowing restrictions, of course. The 0% promotional APR checks must be posted by February 15, 2006, and you can borrow interest-free until the June 1 billing cycle. After that, normal interest rates apply. Or, you can borrow at a 3.99% fixed APR for as long as you have an outstanding loan balance. (That’s better than what the Fed OFFERS commercial banks!)

They are likely to keep extending these super deals throughout the year, so I wouldn’t worry about not making the February 15 deadline.

A Word to the Money-Borrowing Wise

Bear in mind that there’s a “transaction fee” of 3% per check, but the credit card company can’t charge more than $75. So it pays to borrow as much as you can on one check. On a $10,000 loan, the $75 fee is less than 1% of the outstanding loan. That’s as close as you are going to get to an interest-free loan.

Warning: This kind of liberal loan arrangement can be dangerous to consumers who can’t control their spending. I do not recommend borrowing money using these interest-free loans for consumer purchases that lose value the minute you buy them.

But I’ve found these convenient checks to be an excellent, cheap way to manage my “cash flow.”

May you have a happy, prosperous New Year in 2006!

Good trading, AEIOU,

Mark

Today’s Investment U Crib Sheet

Saving and investing are always preferable to borrowing money and overspending. You should continue to save and invest regularly in the stock market and other investments. My favorite way of doing this is with an Automatic Investment Plan, or AIP See Investment U #467: Powerful Financial Planning Tools: What We Can Learn from the Monetary Shock that No One is Talking About.
If you’re interested in checking out some of the offers I’ve talked about today, visit www.chase.com or www.chase.com/united to sign up for their Visa credit card and borrowing privileges.