I have discovered a way to carry a credit card balance indefinitely, interest-free, without making payments, using only an Amazon Kindle.
How my card works is, any purchases made during Month N get applied to the balance due in the middle of Month N+1. So if I make a purchase now, in May 2013, it goes on the balance due June 15th. If I don’t pay the full May balance by June 15th, then and only then do they start charging interest. This is pretty typical of credit cards, I think.
Now the key loophole is that refunds are counted as payments, and are applied immediately, but purchases are applied to the balance due next month. So if I buy something on June 5th, and return it on June 6th, the purchase goes toward the balance due on July 15th, but the refund is applied as a payment on the balance due on June 15th! So you can pay your entire June balance with nothing but refunds, and you won’t have to worry about paying for those purchases until July, at which time you can do the whole thing again. The debt is still there, of course, because all you’ve done is add and then subtract say $100 from your balance, but absolutely no interest is charged. This process is limited only by your credit line (which you cannot exceed at any time) and by the ease with which you can buy and return stuff each month.
Here’s where the Kindle comes in. Repeatedly buying and returning items from a brick-and-mortar store is incredibly time-consuming and risky. You have to buy stuff, keep it in good shape, and then return it, interacting with human clerks each time, without raising suspicion. Not efficient. But if you have a Kindle, you know that when you buy a book, after you hit “Purchase” a screen comes up that asks if you have bought the item by accident, and if so, would you like to cancel the purchase. If you hit the button to cancel the purchase, what happens is that the purchase is still applied to your card, but it is refunded a couple of days later. Bingo. Automatic refunds, obtained at home at no risk, with no human oversight.
But e-books on Amazon are like $10, so you’d have to sit there all day hitting “buy” and “return” to shift a significant amount of debt, right? Wrong. If you know where to look, the Amazon kindle store has lots of handbooks, technical manuals, and textbooks that cost hundreds of dollars. Start out searching for “neurology handbook” and just surf the “similar books” list from there. Buy and return a few of those, and you’re set for another month.
Obviously you have to pay off the debt at some point. This is not free money. But if you’re in a tight spot for a few months, it’s incredibly useful. And hey, if the inflation-adjusted prime rate is 0%, why should you have to pay interest? You’re good for it.
This is by far the most munchkin-like idea I’ve ever had, and I’m pretty happy about it. I’ve been using it since January, making real payments toward my card as I can, and covering the rest with Amazon buy-and-returns. I know I’ll pay down the debt when I have a better job, but in the meantime it is really nice not to have to pay any interest on it.
As far as I understand (and I could be wrong), your machine does not actually generate money, but merely defers payment until some future date. It does so by essentially exploiting a bug in the Kindle + Credit Card system, and it has an upper limit of whatever your max credit line is. My guess is that if this trick becomes popular, someone will patch the bug (probably Amazon, credit card companies are pretty slow).
So, don’t get me wrong, it’s a nice hack, but it’s hardly perpetual or earth-shattering. One similar trick I know of is to have several credit cards, and use them to keep transferring the balance between them before interest accumulates; but this is less efficient, since the “free balance transfer” special offers occur relatively rarely.
Okay, “perpetual motion machine” might have been hyperbolic—the comparison I had in mind was to what we might call a “weak” perpetual motion machine, which doesn’t generate energy but is exactly frictionless, so it twirls forever without energy input.
So, don’t get me wrong, it’s a nice hack, but it’s hardly perpetual or earth-shattering. One similar trick I know of is to have several credit cards, and use them to keep transferring the balance between them before interest accumulates; but this is less efficient, since the “free balance transfer” special offers occur relatively rarely.
Do it for long enough and inflation will eventually reduce the debt to a negligible amount. In twenty years, at three percent rate of inflation, your debt will only be worth 54% of what it initially was!
The hack generates money if you invest the “loan” into something that pays interests in less than a month. Not enough money to be worth your time, of course; but it’s still infinite free money for a given value of “infinite”.
The hack generates money if you invest the “loan” into something that pays interests in less than a month.
The hack generates money if you invest the loan into anything that pays interest. It requires fiddling to be done monthly but the investment can be anything and can be ongoing.
As far as I understand (and I could be wrong), your machine does not actually generate money, but merely defers payment until some future date. It does so by essentially exploiting a bug in the Kindle + Credit Card system, and it has an upper limit of whatever your max credit line is.
We could perhaps consider it a time value generator limited by max credit. This could be reasonably analogized to a perpetual motion machine with an ongoing finite output.
I would worry the effect this may have on your credit rating if anyone catches you at it, together with possibly more serious effects. This could potentially be considered fraud. Altogether it seems much more sensible to simply live within your means and pay off your credit balance each month.
Better to think of ways to not spend money than think of ways to keep on living relying on other peoples’ money.
You don’t get rich that way, though. Sure, you can accumulate a comfortable amount of low-grade wealth, but all the real games are played with other people’s money. The only difference between B_For_Bandana’s trick and the typical externalities exploited by your average high roller is the number of zeros involved in the figures.
The only difference between BForBandana’s trick and the typical externalities exploited by your average high roller is the number of zeros involved in the figures.
No way! Our noble masters got their rightful place on top of the Holy Free Market due to their hard work, brilliance, laudable ambition and—as much ressentiment as it might cause in the weak and envious—their overall innate superiority that separates them from the lower orders!
...And even if they do use tricks like that on occasion, lazy and worthless commoners like you shouldn’t dare imitate them. In the hands of the good and the great they do no harm, but just any unwashed pleb exploiting loopholes like those is dangerously subversive of the natural hierarchy.
It may no longer be fashionable to point people to “Politics is the Mind-Killer”, but that was the best example of a good, solid, and avoidable dig at the other side that I’ve seen for quite some time. Mockery contributes nothing, especially in a thread where as far as I can tell no one’s advocated the positions you’re mocking. Downvoted.
I have discovered a way to carry a credit card balance indefinitely, interest-free, without making payments, using only an Amazon Kindle.
How my card works is, any purchases made during Month N get applied to the balance due in the middle of Month N+1. So if I make a purchase now, in May 2013, it goes on the balance due June 15th. If I don’t pay the full May balance by June 15th, then and only then do they start charging interest. This is pretty typical of credit cards, I think.
Now the key loophole is that refunds are counted as payments, and are applied immediately, but purchases are applied to the balance due next month. So if I buy something on June 5th, and return it on June 6th, the purchase goes toward the balance due on July 15th, but the refund is applied as a payment on the balance due on June 15th! So you can pay your entire June balance with nothing but refunds, and you won’t have to worry about paying for those purchases until July, at which time you can do the whole thing again. The debt is still there, of course, because all you’ve done is add and then subtract say $100 from your balance, but absolutely no interest is charged. This process is limited only by your credit line (which you cannot exceed at any time) and by the ease with which you can buy and return stuff each month.
Here’s where the Kindle comes in. Repeatedly buying and returning items from a brick-and-mortar store is incredibly time-consuming and risky. You have to buy stuff, keep it in good shape, and then return it, interacting with human clerks each time, without raising suspicion. Not efficient. But if you have a Kindle, you know that when you buy a book, after you hit “Purchase” a screen comes up that asks if you have bought the item by accident, and if so, would you like to cancel the purchase. If you hit the button to cancel the purchase, what happens is that the purchase is still applied to your card, but it is refunded a couple of days later. Bingo. Automatic refunds, obtained at home at no risk, with no human oversight.
But e-books on Amazon are like $10, so you’d have to sit there all day hitting “buy” and “return” to shift a significant amount of debt, right? Wrong. If you know where to look, the Amazon kindle store has lots of handbooks, technical manuals, and textbooks that cost hundreds of dollars. Start out searching for “neurology handbook” and just surf the “similar books” list from there. Buy and return a few of those, and you’re set for another month.
Obviously you have to pay off the debt at some point. This is not free money. But if you’re in a tight spot for a few months, it’s incredibly useful. And hey, if the inflation-adjusted prime rate is 0%, why should you have to pay interest? You’re good for it.
This is by far the most munchkin-like idea I’ve ever had, and I’m pretty happy about it. I’ve been using it since January, making real payments toward my card as I can, and covering the rest with Amazon buy-and-returns. I know I’ll pay down the debt when I have a better job, but in the meantime it is really nice not to have to pay any interest on it.
Upvoted for the fact that the author actually implemented the idea into practice. Too many other posts on this thread are just theorycrafting.
That was what impressed you? Not my creation of a real-life financial perpetual motion machine?
As far as I understand (and I could be wrong), your machine does not actually generate money, but merely defers payment until some future date. It does so by essentially exploiting a bug in the Kindle + Credit Card system, and it has an upper limit of whatever your max credit line is. My guess is that if this trick becomes popular, someone will patch the bug (probably Amazon, credit card companies are pretty slow).
So, don’t get me wrong, it’s a nice hack, but it’s hardly perpetual or earth-shattering. One similar trick I know of is to have several credit cards, and use them to keep transferring the balance between them before interest accumulates; but this is less efficient, since the “free balance transfer” special offers occur relatively rarely.
Okay, “perpetual motion machine” might have been hyperbolic—the comparison I had in mind was to what we might call a “weak” perpetual motion machine, which doesn’t generate energy but is exactly frictionless, so it twirls forever without energy input.
Interesting! Didn’t know about that variant.
Do it for long enough and inflation will eventually reduce the debt to a negligible amount. In twenty years, at three percent rate of inflation, your debt will only be worth 54% of what it initially was!
The hack generates money if you invest the “loan” into something that pays interests in less than a month. Not enough money to be worth your time, of course; but it’s still infinite free money for a given value of “infinite”.
The hack generates money if you invest the loan into anything that pays interest. It requires fiddling to be done monthly but the investment can be anything and can be ongoing.
We could perhaps consider it a time value generator limited by max credit. This could be reasonably analogized to a perpetual motion machine with an ongoing finite output.
What does Amazon have to gain from patching it?
I’m assuming that the constant churn of purchases and returns costs them money. For example:
Some credit cards charge vendors (not consumers) a non-refundable per-transaction fee
The returned books may mess up their analytics (including royalty calculations)
Returning a book is usually a rare event, and may thus be computationally expensive
Amount of money lent out via bug * rate of return of capital at their current margins.
I would worry the effect this may have on your credit rating if anyone catches you at it, together with possibly more serious effects. This could potentially be considered fraud. Altogether it seems much more sensible to simply live within your means and pay off your credit balance each month.
This is the “ridiculous munchkin ideas” thread, not the “sensible advice you’ve already heard” thread.
A more pertinent worry. Especially with cards that give a percentage of each purchase as “reward points” or something, I’d be worried about this.
Excessive returns will possibly get you banned from Amazon for life, with no warning, as many have discovered.
But probably not for e-books as there is no recognizable loss for Amazon controlling.
Better to think of ways to not spend money than think of ways to keep on living relying on other peoples’ money.
You don’t get rich that way, though. Sure, you can accumulate a comfortable amount of low-grade wealth, but all the real games are played with other people’s money. The only difference between B_For_Bandana’s trick and the typical externalities exploited by your average high roller is the number of zeros involved in the figures.
No way! Our noble masters got their rightful place on top of the Holy Free Market due to their hard work, brilliance, laudable ambition and—as much ressentiment as it might cause in the weak and envious—their overall innate superiority that separates them from the lower orders!
...And even if they do use tricks like that on occasion, lazy and worthless commoners like you shouldn’t dare imitate them. In the hands of the good and the great they do no harm, but just any unwashed pleb exploiting loopholes like those is dangerously subversive of the natural hierarchy.
It may no longer be fashionable to point people to “Politics is the Mind-Killer”, but that was the best example of a good, solid, and avoidable dig at the other side that I’ve seen for quite some time. Mockery contributes nothing, especially in a thread where as far as I can tell no one’s advocated the positions you’re mocking. Downvoted.
Fair enough. Yeah, I ought to at least stick to using those with some more context.
There’s even a special page on the Amazon website for the express purpose of cancelling ebook purchases within the last 7 days: http://www.amazon.com/gp/help/customer/display.html?nodeId=200144510