Make $15 a day in interest.

[DansMom]

Here's a HYPOTHETICAL plan, to make an extra $15 a day: Ther are many things that make this "plan" complete non-sense. And I'm sure there are more problems I haven't even thought about.

This is what my friends Jason, Willie, Doogie and I can up with drunk one night. It's going to involve a few friends that you TRUST and a  credit card  that gives you cash back.

The plan all started when my friend Doogie won an autographed picture of Elton Brown (yeah, I know... who?) a football player for the cardinals. Here's how we use a credit card company's rewards system for our profit:

Doogie offers the picture up on Ebay for $10 million. No one on EARTH would buy that. Except me.

I buy the picture for $10 million and via paypal, charge it on my American Express One card (it has "no limit") and Doogie now has $10 million dollars - and I've got one hefty credit card balance (try getting a car loan with that balance!)

There are hidden fees in this however. There are fees for entering an item on ebay, closing costs, paypal fees for using your credit card, and the big issue is that most of them are %'s of the cost. That problem - thanks to jason - is solved by tacking the fees onto the shipping cost. So, to ship this picture it will cost $647,370.66. Therefore, my total charge to paypal is $10,646,370.66, paid for via credit card.

Then, to make things non conspicuous. (ok, keep reading when you stop laughing) Jason buys the picture from me for $10million and then WIllie buys it from Jason and so on and so on until Doogie realizes how much he wants the picture back and buys it back and pays off his credit card bill in CASH (or he screws someone and keeps the $10million.) Therefore, by the end of every credit card billing cycle we'd have to continue to buy and sell the picture so we can pay off our credit card balance and avoid any interest.

So if everyone has a no-limit 1% cash back card. Then after the $10,646,370.66 is paid for, 1% ($106,463.70) is deposited into our high yield savings account (with a 5% return rate) which means that yearly we would make $5323 a year in interest (compounded daily - deposited monthly) which works out to just under $15 a day.

What do you think? - the only drawback (ok, the BIGGEST) drawback is that you'd have to claim $10million in income on your taxes.

[splynt0r]

Possible but extremely complicated, and its not foolproof, if someone gets screwy you all end up in shit. But nice try 

[I-baLL]

uh.. what's the difference between this and just having 2 no-limit credit cards and continuosly using one to pay the other one off?

[rbcp]

Ever hear of floating checks at a bank?  It works something like this - you have a checking account at two different banks.  You write a check for $5,000 from Bank A and deposit it into Bank B.  But you don't actually have $5,000.  Then, to cover that $5,000, you write a check for $10,000 from Bank B and deposit it into Bank A.  Now you need to cover your $10,000.  So you write a check for $15,000 from Bank A and deposit it into Bank B.  And so on.  Since checks take a few days to process, theoretically you could do this forever until you're a billionaire.  You'd probably want to start with smaller amounts, though, so the checks would clear.  Like start with $100 and work your way up.

I think it was Frank Abagnale, the Catch Me If You Can guy, who started this scam back in the 60's.  So banks know all about it and will eventually catch you.  In fact, my ex Colleen used to work at a bank and they warned her to be on the lookout for this scam.  But the fact that they warned her proves that people still do it.

[frog]

Ever hear of floating checks at a bank? 

In fact, my ex Colleen used to work at a bank and they warned her to be on the lookout for this scam.  But the fact that they warned her proves that people still do it.

It's called kiting, and it is practically impossible now. Banks no longer have to send paper-copies of cheques to the clearing house, they scan both sides and send the images electronically, meaning they clear the next day.

Abagnale did not come up with cheque kiting, he just did it a hell of a lot better than anyone else. He changed routing numbers (the first nine numbers on the bottom of a cheque) so that instead of going to the clearing house in the district the cheque was drawn on, it would instead route to one on the other side of the country, making it take significantly longer to clear and allowing him to stay in one place for longer.

[gangals]

cheque

Damn you Canadian!

[Zazen]

Ever hear of floating checks at a bank? 

In fact, my ex Colleen used to work at a bank and they warned her to be on the lookout for this scam.  But the fact that they warned her proves that people still do it.

It's called kiting, and it is practically impossible now. Banks no longer have to send paper-copies of cheques to the clearing house, they scan both sides and send the images electronically, meaning they clear the next day.

Not everyone does this. I work in a financial institution and our branches aren't set up for that; they still send out their paper checks by courier for processing. But we still have scripts to detect kiting activity and the tellers and reps are trained to look for it.

[mrpeanut]

and whats the name of this institution?

[gangals]

WTF happened to the 3 or 4 posts after my one post pestering frog?

[Jordi]

With new laws like Check 21 (effective 10/28/2007) that floating time will be a few hours, if any at all. ACH is making the difference!