It’s no secret that we’re in the midst of a credit crunch. Banks aren’t lending, foreclosures are on the rise, card issuers are reducing credit limits, and the juiciest credit card offers have all but disappeared. Gone are the days when everyone (and their uncle!) was offering lengthy 0% balance transfers with no transfer fee.
So what’s a savvy debt reducer to do? Get creative. Building on an idea that I first wrote about over at Credit Addict, you can create your own fee-free balance transfer with any card that offers 0% APR on purchases. There are still a number of such cards available, many with promo periods of up to 12 months.
Once you have your card, simply drop by the US Mint and buy cash with your credit card. That’s right, you can buy $1 coins straight from the Mint, and you can pay with a credit card. They come in boxes of 250 coins, with a limit of two boxes per order, and shipping is free. Thus, you can buy up to $500 per order.
Once your coins arrive, simply deposit them at the bank and use the proceeds to pay down your high interest debt. Bip, bop, bam. You’ve just turn that “0% on purchases” promo into a 0% balance transfer. And best of all, there are no fees.
While there’s no explicit limit on the number of orders that an individual can place, it’s possible that the Mint will wise up and limit your transactions if you try to do too much. Also note that shipping initially shows up as $4.95, but it’s deducted on a subsequent page. Oh, and since this is technically a purchase, you should also earn rewards on these transactions. Here again, if you do too much too fast, your credit card company might wise up and limit your transactions.
Finally, I should note that I do realize that the ethics of this trick are somewhat questionable. The goal of the Mint is to get these coins out into circulation, and depositing them at your bank technically does that. Nonetheless, that’s not really in the spirit of what the Mint is trying to accomplish, and you’ll be generating unnecessary credit card processing fees. If you’re not comfortable with this, then don’t do it. But if you are, you can save a good bit of money.