The Autist’s Guide to Credit Card Arbitrage via /r/wallstreetbets #stocks #wallstreetbets #investing

TL;DR: Credit Card Arbitrage strategy aims to obtain liquidity for 12 to 18 months at low interest rates. Said liquidity can be used to generate alpha on low risk market strategies.

Guide:

1. Apply for a credit card with 0% promo APR, usually lasts for the first 12 to 18 months
2. Convert credit into cash via manufactured spending
   1. I usually make a payment to the IRS and get a refund; takes about 2% and 2 months
3. Use cash for low risk strategies on the stock market e.g. The Wheel Churn
4. Pay off credit card close to promo APR expiry
   1. Can apply for another 0% promo APR and balance transfer for a 3 to 4% fee
5. Rinse and Repeat until you are no longer able to apply for credit cards

Risks:

1. Guaranteed risk: compromised credit score due to high utilization and constantly opening credit lines
2. Speculative risk: inability to repay credit before promo APR expiry due to black swan market events

Strategy not recommended for undisciplined traders and for those who need to maintain an excellent credit score.

Disclaimer: This is not financial advice. You will lose all of your money.

Discussion: Please feel free to let me know if I missed any risks, I'll update the post accordingly.

This post was inspired by u/runaway-vol's Box Financing guide.