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:
- 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.
- Put the 0% loan into high interest rate savings accounts. Unlike Canada, the U.S has accounts that pay up to 5.15%.
- Collect interest until your balance is due.
- 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.If you would like to read more articles like this, you can sign up for my free weekly money tips newsletter below (we will never spam you).