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January 17, 2007

Giving money away to Home Depot with gift cards

Home Depot made about $40 million last year from consumers giving their money away to them. A bunch of people just walked into the store, handed over cash or credit, and walked out with a small piece of plastic that ended up in a desk, at the bottom of a closet, or wherever it is that lost socks go.

Consumers ended up not spending $8 billion - that's $8,000,000,000 - in gift cards, or about 10% of the total gift cards given out last year. Home Depot isn't the only company making tens of millions of bucks from people not cashing in gift cards. According to TowerGroup, Best Buy made $40 million from people not buying electronics and The Limited made $30 million from people not buying clothes.

So what to do when you get a gift card you don't want or can't use? Well, you could re-gift it - for example, I donated a Sports Authority gift card to an elementary school so the kids could have some new soccer balls. But if you're not as good as a person as me, you could go on eBay or craigslist and sell it.

A few websites have popped up dedicated to letting you trade in those gift cards for others or buy or sell gift cards for less than 100% of their face value. Swapagift.com charges $3.99 for each card you sell on their website. I used to sell gift cards (that I "earned" from pay-to-surf programs) on eBay and usually got about 70%-80% of the value of the card.

Posted by brian at 12:48 AM | Comments (0)

January 15, 2007

Free credit card credits: $2 in two minutes

Last week's post described how I made $443 in 18 minutes, courtesy of Chase's 0% balance transfer offer. Today's post describes how to earn slightly less money ($2). However, you can do this trick once a month, so after 20 years, you'll have $480 in savings. This might not be worth your time, but it's still amusing.

Some banks consider the cost of preparing and mailing a statement too much for small amounts and therefore don't bother. For example, if your balance is $1.99 or less at the end of your billing cycle, Discover Card will post a "SMALL BALANCE CREDIT" to your account (you can check it online) and forgive the debt. For Capital One, the charges must total $0.99 or less. Other credit cards that do this for sums less than $1 or $2 include Chase (they call it a "CREDIT ADJUSTMENT"), Wells Fargo, and Providian.

If you try this, remember that your total charges at the end of the month have to be less than $1 or $2. Please remember the credit card company charges merchant fees of $0.30 - $0.50 per transaction, so your favorite merchant might actually lose money on these transactions.

Small purchases could include gasoline, eBay insertion fees, PayPal, gum, or a milk shake at In 'N' Out.

Yes, this choco-vanilla swirl In 'N' Out shake ($1.69) could be free every month, thanks to Discover Card.

It's like magic.

Only not.

Posted by brian at 06:35 AM | Comments (0)

January 04, 2007

Balance transfer challenge: $433 in 18 minutes

The common reaction I get when describing how to make money from 0% interest rate credit card balance transfer offers by sticking the money into a savings account and paying it back before the interest rate changes:

First, the eyes glaze over.
Then, the fidgeting starts.
Finally, when I'm done talking, I hear, "That sounds too complicated and time-consuming".

I recently got a 0% balance transfer offer from Chase, good until mid-Nov, 2007. The balance transfer fee is 3% of the balance transfer, up to a limit of $75. So I timed myself to see how quickly I could make a few hundred bucks.

Tue 6:45 - 6:47 pm: Open the mail & read the offer. Decide I can make some easy money.
Tue 6:48 - 6:51 pm: Think about asking my girlfriend to stop using the computer so I can use Excel to figure out exactly how much money I can make. Since she only gets to use it for the ten minutes a day I'm not hogging it, I do the math quickly on scratch paper for my $12,000 credit limit:

(The above is a Microsoft Paint reproduction. My handwriting isn't really that bad).

Tue 6:52 - 6:55 pm: Go sneak some Oreos in the kitchen while the girlfriend is on the computer. Stroke of genius occurs - why not increase my credit line and make more money? That way, I could afford both beer AND chips & salsa. Make mental note to self in future: Always eat cookies when working on important financial matters.

Tue 6:56 - 6:59 pm: Finally get computer. Go online to Chase website. Fill out form to increase credit limit.

Total time invested: 8 minutes, not including cookie time.

On Thursday, got an email from Chase saying the credit limit was increased to $18,000. Now the math works out even better. Call Chase:

Me I'd like to do a balance transfer and take advantage of this 0% offer I got in the mail. I believe that instead of using these balance transfer checks you can transfer the money directly to my bank account?
Chase That's right. I'd be happy to help you borrow our money so you can earn interest for guilt-free beer and chips & salsa. I'll just need that checking account number.

Six minutes later, and I'm done. (The money showed up in the account the following week).

Finally, I go online and schedule all the payments until mid-Nov. That takes four minutes.

So taking into account the fact that the money will earn about 5% interest for just under 11 months, that $75 balance transfer fee will actually accrue finance charges at 18% for 11 months, I should come away with about $433 after taxes on that $18,000 (well, actually it was $17,900) balance transfer, all done in 18 minutes.

Wanna try? Here's the Chase card I used.

Posted by brian at 07:24 AM | Comments (0)