Since I work as a contractor in the IT industry I dont get regular income, although when I do work I get paid very well.
What I have done over the last few years is to make use of the balance transfer on credit cards which offer a 0% rate to help me with my cash flow.
Its like doing a carry trade, borrow 10k at 0% for 6 months, invest that in cash earning 3%. After 6 months you have made $150 of free money. Take out the 10,150 from the high interest savings account, pay off the credit card in full and close the credit card account. (You may need to deduct an annual fee for the credit card which will reduce your $150).
I have done the balance transfer carry trade trick 4 times now.
It's helped me out with cash flow, and has actually earned me risk free money.
However, while I say it is risk free, am I affecting my credit rating by doing this trick every 6 months?
I have only ever earned 2 credit cards at a time and I am always on time with my repayment, in fact, in using credit cards for the last 8 years, I have never paid a cent in interest.
I dont have any other loans, i.e car, house, however will apply for a home loan one day.
What do you all think? Is going around constantly balance transferring a debt a good idea. Or will it one day catch up with me?
Im not worried about myself producing an income to eventually pay off the debt. Im more concerned that I may be doing something detrimental to my credit rating. Been seen as someone who never wants to pay off a debt.