Wednesday, October 10, 2007

App-O-Rama is no longer worth it

Unfamiliar with an app-o-rama?
It's a simple concept, apply for as many 0% apr credit cards as possible, max out the credit cards using a balance transfer (which are very cheap or free) and bank all the money in a high paying saving account for the 12 mo 0% apr. Once the 12 mo's are over, pay back all of the money and keep the dividends.


I researched this strategy for two weeks. Last night I decided to give it a shot. I got my, which helps fill out forms, i got which helps pay bills automatically online so i would never miss a payment, had my word file with a massive amount of html's of 0% credit card offers, and i started a google spreadsheet. I figured out how many I needed to apply to, and how much credit I needed for this to be profitable.

The first card I applied for Discover More Card was approved instantly, I was excited. It was a good start. The CitiBank card also looked promising. However, the next 5 Citibank cards were all under review immediately, because I was applying to more than one credit card at a time (keep in mind i did not have a credit card before this, however I do have really good credit due to my debit card). CitiBank did send me an e-mail today saying that only one card will be processed. This pattern followed with both my second Discover and second Chase cards. I was rejected because I had signed up just minutes before. The whole reason this app-o-rama works is because you sign up for multiples at once, which apparently the credit card companies have figured out.

Balance Transfer Fees
A few months ago, in the glory days of App-O-Ramas, there was no cost to transfer one debt to another card, but recently (probably due to this strategy) they have added on a 3% at-time charge up to $75. This is happening across the board. Some even go as high as $99 limit. This fee is instantly cutting down any chance at making money with this strategy anymore.


In the end, after 2 hours of applying for 12 cards (i had 34 originally on my list but stopped trying to apply to repeated card companies) I think I will be approved for 3. Three measly credit cards is far too low a number to be successful with this strategy, and after calculating what I would be making if i payed the $75 fee and went ahead with banking all three maxed out cards, I would make approximately $46.50. And when you consider the time spent shifting money from one account to another, and paying bills, and then worst of all having to go through the flaiming hoops to cancel a credit card its just a horrible deal altogether.

The App-O-Rama is no longer worth your time

No comments: