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Credit Card Arbitrage with App-o-Rama

In Sept, I wrote about Credit Card Arbitrage in Canada.  Since writing that article, App-o-Rama.org has contacted me to do a paid review of their free service that they're offering to U.S residents to help them maximize credit card arbitrage.  Even though the credit cards and saving accounts that they recommend are U.S based, the advice that they give is also applicable to Canadians.

Here is the jist of their strategy:

  1. Apply to as many 0% balance transfer credit cards as you can, as fast as you can.  They recommend that you apply quickly because as you apply for a credit card, your credit score will be affected.  However, there is a time lag before credit agencies are alerted of your credit application.  So when you apply fast, you can get approved for more cards than if you space it out.  They have an article on How App-o-Rama impacts your Credit Score.
  2. Put the 0% loan into high interest rate savings accounts.  Unlike Canada, the U.S has accounts that pay up to 5.15%.
  3. Collect interest until your balance is due.
  4. Pay off balance in full.

Although the credit cards and savings accounts are US based, us Canadians can also take advantage of the free tips he has when using the credit card arbitrage strategy.

What I liked

  • I like how everything is free.  Their advice, credit cards, and savings accounts, all without a single dollar out of your pocket.  This site really utilizes the idea of a win-win strategy.
  • They don't just explain the benefits of credit card arbitrage, they also explain the Risks of App-o-Rama.
  • The layout is simple and they explain their concept in an easy to understand fashion.

How does App-o-Rama make money?

  • I don't know for certain, but I'm pretty sure that the credit card and savings account selections are affiliate based links.  This means that they get a kick back for every application that is completed.  I don't have a problem with this as it doesn't cost the consumer anything.  I actually think this site is a great idea. 

What needs Improvement

  • I don't condone the strategy of applying for multiple credit cards as fast as possible.  The reason I don't like it is because of the significant hit that your credit score will face when the dust settles.  However, if you're not planning on utilizing your clean credit score in the near future, it probably won't matter much.
  • They need to get more savings accounts listed.  At least then people will have more choice.  Sometimes a convenient bank with a lower interest rate is worth it.
  • In their credit card listings, they need to include the 0% monthly payment terms.  Some credit cards require a certain percentage of the balance / month, others require a fixed amount.  Neglecting to make the right payments will basically turn this strategy into a losing proposition.


  • Great on stop shop for our American friends to make an attempt at credit card arbitrage.  It has everything you need, good credit card choices along with the savings account.  Best of all, the info along with the applications are free. 
  • Careful when applying for multiple credit cards at the same time as it will have a significant effect on your credit score. Not only that, it's a job in itself to keep all the cards and payment terms in order.
  • Although all the credit card/savings account options are U.S based, the tips that they provide on credit card arbitrage is valid for Canadians.

Check out App-o-Rama.org, and let me know what you think.

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FT About the author: FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.

{ 15 comments… add one }
  • Avatar FrugalTrader October 3, 2007, 8:40 am

    I guess with different taxation and a larger spread between borrowing and investing in the U.S, CC arbitrage may be more appealing. Can anyone comment on “interest” taxation in the U.S?

  • Avatar Lewis Empire October 3, 2007, 1:27 pm

    I haven’t confirmed this but I hear that Canadian Tire is offering a 5.5% interest savings account.

  • Avatar FrugalTrader October 3, 2007, 1:33 pm

    Lewis, wow, i just googled it and came up with their site:

    Apparently, they are offering 5.5% for the first 90 days of opening the account, then reverting back to their 4.0% afterwards. Seems like a pretty decent account.

    Anyone have any experiences with Canadian tire financial?

  • Avatar Larry October 3, 2007, 2:14 pm

    Interest in the U.S. is taxed as regular income…so the same amount you pay on your paycheck. Max rate is 35% on the Federal level and up to 10% in some states. You can also deduct the costs of earning this income, so in this case, the interest you pay to the credit cards would reduce your taxable income

    Still, this sounds like a pretty cool strategy that is fairly foolproof…if you read things carefully and closely abide by all the cards terms.

  • Avatar the Wealthy Canadian October 3, 2007, 4:18 pm

    Using CC arbitrage or signing up for CC just for the free gifts sounds great, in theory. But I think the downside risks would be too much for regular Joes.

    $10,000 credit limit maxed out for a 5% return = $500 (not bad). But now there is extra paperwork, taxes, discipline, plus carrying a balance on a maxed out CC would impact your credit rating.

    I don’t know if it’s worth it… but definitely worth investigating.

  • Avatar the Wealthy Canadian October 3, 2007, 4:22 pm

    The Financial Blogger has a couple good posts on credit score; http://www.thefinancialblogger.com/improve-your-credit-102-how-much-credit-is-optimal/

    He says that credit bureaus look at a ratio of what you owe to your total credit. If it’s high then you lose points.

  • Avatar FrugalTrader October 3, 2007, 4:37 pm

    I’ve read that provided that you keep your credit balance at or below half of your available credit, the credit score shouldn’t be affected too much. I think the biggest problem with the app-o-rama method is though the multiple applications within a short period of time. The multiple hits will also bring down the score.

  • Avatar Traciatim October 3, 2007, 7:45 pm

    FT, I thought multiple hits in a short period (IE, Less that 7 days) was considered one hit because it was ssumed that you were just shopping for the best deal.

  • Avatar FrugalTrader October 3, 2007, 10:31 pm

    Traciatim, I’ll have to check with a credit pro, but if you have multiple applications in to multiple credit cards in a short period of time, I can see it severely diminishing your credit.

  • Avatar nancy (aka money coach) October 4, 2007, 2:51 am

    wow – just when I thought I’d heard it all… there’s cc. arbitrage! Who knew? (I didn’t). Regardless of what any of us think of it, thanks for putting it out there as an option. Wild. (and Citizens Bank of Canada offers 3.8% and is owned by VanCity credit union, so there’s a feel good component to the account, for what that’s worth)

  • Avatar Content Writer October 4, 2007, 5:00 am

    nice post ..

  • Avatar raymond January 29, 2008, 9:28 pm

    i totally agree app-o-rama could also help you on all your problems with your credit cards

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