My personal strategy with ezycash promo or balance transfer promo

[nancycc]

There was another post earlier about the maybank new ezycash offer for cash out with 6 months instalment at 0% interest rate, and I notice some people dismiss it or think it's too little benefit to care.

For people that think it's dumb to take advantage of these kind of offer for just few hundreds bucks, that is because you don't have a full strategy to utilize these offers.

But before I continue I must note this isn't meant for people that lack self discipline and self control, all financials tools are neither good or bad, it's entirely up for the users.

My Strategy​

Bank offers 0% interest of ezycash/instalment/balance transfer from time to time, here's how I personally use them:

1. On my CCRIS I have a ~78% utilization on all my credit limits from a few banks, the outstanding total is RM102,335
2. Most of these outstanding are either 0% interest instalment from balance transfer promo, or convert your spend to instalment promo.
3. Now HERE is the where the real strategy comes in, I rollover those outstanding whenever I clear up some limits, in plain words which means every month let say i pay RM 8k, this RM8k is then return to available credit limit, I then look for another promo like this, and extract that money out again with 0% interest, this means I'm constantly rolling the RM100k debt, which you can see it as bank lend me RM100k indefinitely, and I have been doing this for years.
4. Now how you utilize this RM100k is completely up to you, if you are risk averse, put them in ASB or US short term treasury for that sweet 5% with low risk, which is RM5k free every year, but personally I see those outstanding as an advanced salary paid to me, which i can just return the payment with next month salary, so I am basically just invest earlier with my salary, and I invested most of them in US index funds like CSPX, if you look at the return of S&P500 and the weakening MYR against USD, you can prolly tell I made roughly about RM 100k with these offers.

Note​

• The key here is to rollover your debt, the goal is to roll until the time you die and owes your bank RM100k and you win LOL, (or until that RM100k capital is nothing to you.)
• Pay your monthly statement on time, my CCRIS are all 0, of course the high utilization does impact your ability to apply for new credit cards and new loan, so make sure you plan around that, or decrease utilization by stopping the rollover if you plan to buy house or something in next year, because most of these debt are instalment of 12 months, some 18 months, you can easily clear off majority of the debt and reduce utilization back to normal level in just a year or max 2 years.
• THIS IS NOT SUITABLE FOR PEOPLE THAT LACK DISCIPLINE AND SELF CONTROL OBVIOUSLY.

By the way, taking advantage with these offer are way easier when most e-wallet doesn't charge you 1% for credit card top up, so now it may be harder with the increase cost, but there are other ways to achieve the same without e-wallet, just use credit card for regular day life spending works too.

I wrote more about this in my blog post:

Balance Transfer: The Interest Free Capital You Should Know - MalaysianPF.com

 

[hischild4eternity]

@nancycc Have there really been such promotions so regularly that allow you to constantly roll it over with no limitations such as changing to different bank or credit card? Genuinely asking as I would not think they would be so generous.

 

[blackfriar]

@hischild4eternity Exactly

 

[nategordans]

@nancycc It all comes to self discipline. if one is easily compulsive shopping, then is 100% better to stay away to these promos. don't even think about it. else, it's a good tool.

Anyway, if anyone plans to purchase car or homes (big purchases requires bank loan), is better to check your credit utilization rates before planning to do so as you the more you utilize, it will impact your credit score (interest might be higher / lower loan amount offered).

have fun and have a great day ahead gais !

 

[angels777]

@nancycc Are banks giving out this 0% interest so frequently that your idea works?

 

[buur]

@nancycc I used to do something similar for the past ~7 years. I do agree with the general sentiment in that; yes, it can work; provided there is self-control. I also do agree that yes, the general risk-to-reward is low.

The key point is what are you doing with that cash; as with everything in life. If it's generating a higher interest rate; as long as you set aside sufficient liquidity to cover the debt; then this is somehow "fine", if shit were to turn south; you could at least cover the debt.

Basically I reached a plateau where I was burnt out having to consistently monitor the debt and spending levels; decided to reduce the debt load from the savings, while letting the initial investments grow still. Also, foresaw the economy downturn so decided to start repaying the debt.

1 year-ish on; debt has reduced by 60% (i'm still converting some big-ticket items into ~0% installments, but paused using "debt investing", nothing compared to previously) my emergency cash fund is much reduced (from 6 months to 3 months); but my investments have been growing well past the regular interest rate, whereby it could (by itself), almost cover 1 year's salary (post-tax).

We've trimmed our expenses to reflect the lower cash fund as an additional bonus; and I must say one thing, you should only do this when you're younger and have less dependents.

Oh, and make sure you have life insurance so the banks don't burden your next-of-kin.

 

[blackfriar]

@buur The risk and effort needed does not justify the reward. OP is just too daft to realize it since he repeatedly chants there is no risk.

 

[robruss102]

@nancycc Alright, I'll bite.

First of all, hats off of to you for sharing your tips. I think we need more people like you sharing useful information, strategies and tips with everyone else.

I do disagree with this being a good long term / useful strategy. The quick summary is because:
1. The gains are too still too limited / little for the all the rollover effort and tracking everything, once you start seeking more than the ~rm4-5k gains based off RM100k cc drawdown by putting it into non interest bearing investments it starts getting super risky
2. Practicing these types of "tactics" takes away too much time from the where your time/effort should be spent, on the larger/bigger areas on personal finance. In other words, you're playing too small, pinching pennies. Start thinking bigger to build a more big picture mindset and strategic view of personal finance. If you keep on pinching pennies, your mindset and habits will be stuck pinching pennies instead of developing bigger mindsets
3. Personal finance is really a psychological /mental/wisdom game, not a tactics/knowledge game. You can say yes this works (which I agree, it works to win pennies) ONLY if you have the self-discipline and control to do it. The reality is most people don't have control or discipline when it comes to finances, that's why personal finance is so hard; most are either spending and in debt, or trying get rich quick stuff or looking for an easy win. I know you're not "promoting" this, but you're advocating that it works, and I say for most people it not only doesn't work, it's downright playing with fire

CC arbitrage is not new, it's a form of time arbitrage. No one ever got rich of it, but the downsides can get really high

Do keep sharing your tips and I'll be visiting your blog. I just really disagree with advocating for this tactic

 

[blackfriar]

@robruss102 He tells me there is no rollover needed and there is no risk. Anyone with financial literacy knows the effort and risk involves doesn’t justify the reward.

He also tells me he makes 100k returns with zero risk.

 

[thomasik]

@nancycc Hi! I do the same actually, but maybe less vigorous. Times have changed but when there were lesser crackdown on e-wallet, that's when there is more money to be gained.

Kudos to u for lasting so long. I stopped few months ago as it got too tiresome. But yes, it works, just scary and have to always remember to make payment (and note down which is due when).

I don't know how much I've made. Approx 30k in 3 years ish?

 

[cas]

@nancycc I’m actually doing like what you have been doing and for years, it’s just that not every banks offering 0% every now and then so at one point of time you still have to pay those installments.

The drawback of this is ur dsr is high, thus if you are planning on getting good rate for housing loan then you most probably won’t be able to do so.

 

[linamali]

@nancycc What's the best way to cash out from these banks?

 

[thelifeofachristian]

@nancycc Just a basic question, how long would a balance transfer process take? I've applied for a balance transfer from cimb cc to aeon cc 2 days ago but it's not reflected in my cimb account.

 

[jtra5]

@nancycc I am too lazy to do this, seems like a lot of effort. But I can see it's fun as hell with the constant leveraging for productive gain haha, this is what gov treasuries do.

 

[blackfriar]

@jtra5 careful now. he is gonna flame you now when you call him out.

a few others have mention that his "strategy" returns are not worth it for the required risk and effort.

His reply: what risk, what effort? Clown

 

[edincalgary]

@nancycc I found this very interesting but still too dumb to understand.

I have 50k credit card limit with multiple banks.

If i take the 0% ezycash for 30k then put in ASB, how am i going to pay the installment?

take another 0% with another bank to cover the installment?

Please explain like i'm five.

Thank you.

 

[joep222w]

@nancycc Just don't fall sick or be involved in an accident and accidentally miss a payment..

 

[blackfriar]

@nancycc This guy probably works for the bank and is tempting u to think the “rollover” method works

 

[savourite]

@nancycc Thanks for the heads up. Got my 70% already.

 

[jonnyalliance]

@nancycc I'm sorry, justify it all you want, but taking 0% loans and then investing into equities, currencies and the likes is just fucking dumb. It's unsound. It works until it doesn't. That's called leverage.

This strategy is only "risk-less" if you invest the 0% capital into risk-free assets such as FD, HYSA or Amanah Saham. Even then, people should be aware of the potential pitfalls and downsides, but it's perfectly workable and I do it myself. My current risk-free choice is KDI Save.