Infinite Free Debt Cheat Code
Getting Paid to take a large loan from Credit Cards forever
Disclaimer - This ‘infinite free debt cheat’ method can get risky, so pursue it at your own risk. I successfully used this method for 5 years to roll $10-25,000 over interest free the entire time. You been warned.
Would you like an interest free loan in the low 5-figures with no maturity?
What if you could actually get $1,000s PAID to take out this interest free loan?
Do you want to start a business. Or pay down student loans. Or want to degen it into ‘investments’?
There are a lot of reasons getting $10,000+ interest free would be beneficial. With the method here, you honestly could feasibly do this forever and make like $500 a year for life just borrowing money.
Sounds too good to be true right?
Well this isn’t a risk-free system, but if you are passably competent, you should be able to pull it off no problem.
Infinite Free Debt Cheat Code
All you need to get infinite free loans is a good enough credit score to be able to open up credit cards.
Nearly every credit card comes with a 12 or 18-month promotional 0% APR period on new purchases. So what do you do? Open a credit card and put all your daily life purchases on it till you get up to 90% of you credit limit on the card. The 90% is only to bake in a bit of conservatism. If you go over your credit limit you may forfeit your promotional 0% APR and have to pay interest. At a minimum you have potential fees.
Now you have your interest free loan #1, but how do you make it infinite? First, you pay just the minimum payment each month on that card. When you are coming to the end of your promotional period, you open a new card with a new promo period. You put all your new purchases on that new card. Since all your life expenses are going on the new card, you use your cashflow to start paying down the balance on the old card.
Now you have a new interest free loan #2 that is the same balance as your first one and a new timeline of 0% APR.
You could feasibly do this forever. You never pay interest and earn continual rewards for the credit cards (ie-get paid to keep the loan out). The only way it fails is if you can’t get a new credit card. However, as of right now, if you have a decent credit score it is easy to get offers.
Do Not Use Balance Transfer Option
“I’ve heard this before” you may be thinking. Open a credit card and roll over your high balances to it for a small fee.
No…
This is not some basic ‘roll your 25% credit card interest over to a new card with a promotional balance transfer where you pay 5% fee upfront’. That is the midwit way of doing it…
(Also, do you really have credit card debt? There are so many other places to get loans from, how do you have credit card debt?)
A 25% APR is ~2% charge a month. If you have $10,000 in credit card balance at 25%, that is like $200 a month in charges. If you do a balance transfer for 5%, you get an upfront $500 charge. Basically you pay 2.5 months of interest upfront and then get a period of time of no interest.
Gain Promotional Credit Card Rewards
Additionally, new credit card come with promotional bonus points. This is your typical “spend $500 on new purchases in first 3 months and get a bonus $200 in rewards” type offers. However, it is only on new purchases, NOT balance transfers.
Perfect, since this method has you making purchases, you will get that promo bonus rewards in the first month.
Get Regular Credit Card Rewards
Balance transfers don’t count as purchases and don’t get you regular credit card points. If you make $10,000 in purchases at your typical 1% reward rate, that is $100 in rewards. If you get a good card with bonus categories, or 2% rewards, this can easily be $200-$300 in additional rewards on that $10,000 purchase.
What Is The Impact On My Credit Score?
Opening a new card requires a hard credit pull which is a short term ding to your credit score.
However, longer term, having all these cards will be a benefit as it gets you alot of credit to your name and a miniscule credit utilization. Credit history and credit utilization are much more impactful to your overall credit score.
Having a lot of credit cards that you pay off every month means you are only utilizing a small portion of your available credit. This is a big good guy on your creddit score.
Additionally it will give you a long credit history as over time as you have all these older and older cards sitting out there.
Find some small reoccurring charge to put on each card so they stay active. For instance put Netflix on one card, Cable on another etc.
Example: Infinite Free Debt Cheat Code
Examples always help. Let’s assume you make $5,000 a month after-tax and your cost of living is $3,000 a month. Every month you are paying off the $3,000 in expenses. We assume you can get a $12,000 credit card limit, but only put a max of $10,000 on the card to be conservative. We assume $200 promotion for putting $1,000 on a card in 3 months of opening and assume 2% reward points. And assume there is an 18 month promotional period of 0% APR on Purchases. Lastly, assume you put your net cashflow into a stable farm for 5%
You open a credit card and put $3,000 of your expenses on it, but don’t pay it off because you have a promotional 0% APR. You just pay the minimum payment -$30. Month 1:
$3,000 of expenses go onto credit card
-$30 paid for minimum payment
+$200 in promotion rewards
+$60 in points for spending
$3,230 in free cashflow to invest
Month 2 and 3 will look very similar:
$3,000 of expenses go onto credit card
-$30 minimum payment
+$60 in points
$3,030 in free cashflow to invest
Month 2 you earn $13 on your investment of $3,230 at 5% for 1 month
Month 3 you earn $25.50 on your investment of $6,275 for month 2
Month 4 your credit card balance is ~$9,000 so you can only put $1,000 of expenses on the credit card:
$1,000 expenses go onto credit card
$2,000 of life expenses you pay for as you would normally
-$30 in minimum payment
+$20 in points
Month 4 you earn $38 on your investment of $9,325 from month 3
Month 5-12 you pay the bare minimum in payment to the credit card and keep earning $40 from the stable coin invesement:
$3,000 of life expenses you pay as you would normally
-$30 minimum payment
$40 from your stable coin investment of >$10,000
Example: Time for Credit Card #2
Starting in month 12 you open a 2nd credit card. You again put your $3,000 monthly living expense on credit card #2, but this time you start paying down credit card #1 with the excess cashflow instead of investing it. However, this allows you to keep your investment in stable coin out there compounding for you. Therefore, your situation looks like the below for month 13:
$3,000 of expenses go onto credit card #2
-$30 paid for minimum payment on credit card #2
-$2,970 goes to start paying down credit card #1
+$200 in promotion rewards from card #2
+$60 in points for spending on card #2
$260 in free cashflow to invest
>$40 from your stable coin investment of >$10,000
Then month 14-16 you continue the above process as you slowly pay down the balance on card 1 to $0 before your 18 month promotional period is up:
$3,000 of expenses go onto credit card #2
-$30 paid for minimum payment on credit card #2
-$2,970 goes to start paying down credit card #1
+$60 in points for spending on card #2
$60 in free cashflow to invest
>$40 from your stable coin investment of >$10,000
At month 24 you can open a 3rd card and keep it going. Each new card you get to clip the ~$200 in promotional awards, the ~$200 in points on the $10,000 spend over 3 months.
That is $400 in ‘free’ money each year.
Investing the $10,000 in a 5% yielding stable coin clips another $40 a month, so ~$500 per year.
Result is nearly $1,000 every year paid to you for doing minimal work managing a loan at 0% interest loan.
Risks of Inifinite Debt Cheat Code
If done correctly, I’d classify the above plan as very safe. Keeping your $10,000 loan in a stablecoin means the $10,000 shouldn’t lose principal and helps to further mitigate any of the risks below. Worse case, you could withdraw your $10,000 stablecoins and immediately pay off the outstanding balance on your card.
However, here are a few potential risks to be aware of:
A) Can’t open a new card with a promotional offer
There are a lot of credit card companies out there. Nearly every bank & credit union has a version of a card. Heck even retail stores like Target have a credit card that may still come with a promptional period.
But at some point, it starts to get hard to keep procuring new credit cards and/or the rewards on a new credit card start going down. For instance, maybe you can only find a 12-month promotional 0% APR or $100 reward bonus and 1% points for each dollar purchase. For $1,000 a year, you don’t want to be spending a ton of time on this.
If you are in stables, it is fairly quick to unwind. This is really a risk if you invested in stocks and the market went or something similar.
B) Investment Loses Money
In the above example, you are in a 5% stable coin. There is certainly higher yields out there that you could shoot for. However, you don’t wwant to have the $10,000 be in an investment that loses money and be scrambling to make up the difference.
C) Near-term Credit Score Impact
Over the longer-term, having more credit cards open will lead to a higher amount of available credit and a lower credit utilization rate on your credit score. These are both very good things for your score. (Credit Utilization = outstanding credit usage / available credit).
However, near-term you will get a small ding for having hard credit pulls and opening new cards will bring down your average credit age.
Depending on your credit score and if you are going to make a big purchase (house or car for example), you may be better off waiting till after you get that larger loan.
You don’t want to have a 750 score drop to 700 and drop you down to a lower rating and get stuck with a higher mortgage.
D) Penalties!!!!!!
This is the biggest risk. Most credit cards will charge you ALL the back interest if you miss a payment and/or if you carry the balance past the 18 months.
Lets say you have a $12,000 limit, you carry the $10,000 balance and forget to pay it down. Well now you get hit with almost 18-months of 25% APR that gets capitalized and put on your card. You have >$13,000 balance, but your limit is $12,000.
Well you over drew and now get hit with more penalties. The company can shut down your card and give you a time frame to pay and if you don’t they can send you to collections. Having debt in collections will ruin your credit score.
In this case you just lost ~$4,000 in penalties all to ‘make’ $1,000 return.
If you are not organized, too busy, or irresponsible, this is probably not a strategy for you.
Infinite Debt Cheat For Non-Investing
The above examples had you investing your $10,000 interest free loan. However, there is a lot of other options you can do.
For instance, maybe you have a higher interest loan outstanding like a 5% student loan. You could follow the same plan above, but instead of putting the $3,000 a month into a stable coin, you pay down the student loan by the $10,000. Now you are saving $40 a month in interest.
If you work in a career that pays a large percent of your compensation as a bonus, but have a near-term expense, you can do this to float the expense interest free till your bonus comes. For instance, if you have an unexpected medical expense and not enough liquidity, you can put life expenses on a new card and pay for your medical care with the net cashflow. It is cheaper than taking a personal loan for a medical expense.
However, don’t use this to over-extend yourself and buy a rolex that you can’t afford hoping to never have to pay it off.
Conclusion: The Credit Card Infinite Debt Cheat
There is the plan.
I used this after college as a way to make ‘free’ money while ‘investing’ in my first home purchase. It was taking on a bit more risk as the ‘investment’ was illiquid, but I had a good enough paying job that I could probably have squeezed enough to pay down the $10,000 in 6-months if forced.
I actually ended up just rolling the $10,000 balance forward for 4-5 years using the above method. When I sold my first house to move, I used the equity from the sale to pay off the balance.
Net-net I made over $4,000 in rewards and was able to buy a multi-family to live-in, rent one side, and fix-and-flip it.
I probably have 20 credit cards to my name and an extremely long credit history and enormous amount of available credit leading to a perpetually high credit score.
You have the cheat code. Just like getting 30 extra lives in Contra back in the day, you can take advantage of the infinite debt cheat code to get an advantage. Just don’t get burned being stupid with it.
Nicely laid out. Been tossing a scaled down version of this around for a while, and having it concretely presented is really helpful. Bonus points for the Contra reference.
Never thought of something like this. Really fascinating thanks for the write up.