Saturday, October 20, 2007

Blog of the Week: PF Blog

This week's blog of the week goes to the old-school PF Blog and his blog about:

Arbitrage and Credit score.

MM at PF Blog has been Using 0% credit cards for the last several years to charge to the limit into cash which he then in turn invests into high-interest (4-5%) savings accounts that bring him extra interest income throughout the year. It appears he made about $3,000 in the past year by this 'scheme' on the credit card companies.

However, his credit score has shifted from the low 700's to the mid-to-low 600's due to the average $45,000(!) in credit card balances. Now for the average American income this may seem slightly insane but seeing as MM has an over 800K net worth it's not really an issue.

I personally am scared to death of arbitrage but, I like MM's opinion on credit score:

"But credit score is only of cosmetic value if you don't need credit any time soon. To me, after all, I have no better use of my credit score now that I'm sitting on a portfolio of over $800k and has no plan to buy a property any time soon."
I long to be in the position that MM is in right now, where personal assets and cash flow are at a point that makes credit score somewhat of a non-factor.

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