The proliferation of 0% balance transfer offers from most of the major credit card issuers gives us the opportunity to be our own bank. Their promotional offers range from 3 months @ 0% to upwards of 15 months @ 0%.

We apply for as many of these promotions as the credit card issuers are willing to offer, borrow their money from them at 0%, and deposit that money into accounts that safely earn 4-5%.

Can we really earn 4-5% interest in a year like 2009?

Bank accounts full of cash, we are now credit card rich.

When their promotional offers expire, we simply give them back their money and pocket the interest accumulated.

How very nice of them!

Man, those credit card companies are so nice!...

Do not be fooled. This is NOT how the credit card issuers expect you to use their money.

These offers exist for one reason only (and it's not to make us credit card rich): They want consumers to transfer as much balance as possible over to them with the expectation that there will still be a large balance left when the promotional or teaser rate expires. As soon as that teaser rate expires, it immediately converts to a ridiculously high rate.

The credit card issuer will then collect huge interest payments from that moment until the balance is finally paid off, years later.

Unfortunately, most consumers transfer balances to their new card, go on a spending spree, run their debt load up even further, and can never pay off their balance before the teaser rate expires. They then resign themselves to paying exorbitant interest rates far into the future. These people become the credit card poor, certainly not the credit card rich. Very, very sad.

We love the average American consumer...

Though we certainly wish they better understood how cumbersome this debt ultimately will be, WE LOVE THESE PEOPLE. It is they who keep the credit card issuers fat, happy and extremely willing to continue extending these balance transfer offers to them...but also to those of us who are savvy and able to recognize and exploit a loophole when we see one.

For every one consumer like us, there are probably 999 consumers who do exactly what these credit card companies are hoping for. They simply pulverize most consumers with their high interest rates, fees and never-ending cycle of debt. We, in turn, land a couple of body punches and a left hook on the credit card companies. Only fair right?

Example...

The over-simplified version of what we do looks like this:

In addition the math is not quite as simple as shown because we must make minimum payments on our credit card balance each month (a normal minimum payment ranges between 1% and 3% of the outstanding balance depending on the issuer).

By the way, we don't make these minimum payments out of our own pocket. Instead we pay them from the high yield checking and savings accounts that we set up to hold this balance transfer money. So we are paying the credit issuer's minimum payments with their own money!

This knocks down slightly the total amount of capital that is earning interest over that 12 month period (while paying down the total amount owed back to the CC company at the end). So in the example above, assuming that the minimum payments are 2% per month of the outstanding balance, the real figures would be:

What we do is aggressively apply for multiple 0% interest balance transfer offers from the major credit card issuers. The more credit lines, the better. And the higher the credit limits, the higher the earning potential.

After years of trial and error, we have just about perfected the system and now have multiple high limit credit lines at our disposal. And the really great part...they get bigger every year as we piggyback our new lines of credit on top of our existing lines. Being credit card rich actually gets easier, and more lucrative, every single year. And this is, in fact, the best and most exciting part about the strategy. What you are able to earn in year 1 is almost irrelevant. If you do it right, and do it now, you will be setting up an incredible financial future.