Every year, Citi offers me either 0% for 12 months w/ a 5% transfer fee or a \~.50% for 16-18 months with a 5% transfer fee on my card including the option to transfer directly to a bank account.
I carry no balance, and see this as an opportunity for a 5% interest loan \*\*because I have the cashflow to service the loan and repay in 12 months\*\*
I’m wondering if I should take the offer for like $12-15k (limit is way higher but I don’t really want to service more than about $1250 a month out of my fun money cashflow) and put it in something up front rather than DCAing the same $1250 a month over the 12 months.
I’m still working but also have my military pension as guaranteed monthly income which would cover the servicing on of the loan before interest accrued. I guess I’m wondering if it’s worthwhile to use this offer to get $15k cash upfront in lieu of investing $1250 per month
Example I had in mind:
Take out $12k and pay a $600 transfer fee
Buy 300 shares of Verizon at \~$39.65 a share
Dividend yield is \~7.07% so I’d get \~$800 over the four quarters which covers the transfer fee plus $200 bucks and I’d have control of the shares now.
I could sell OOTM covered calls on them in the interim, and if I get assigned, I just pay off the 0% loan (with funding fee) early and keep the upside as profit.
Thoughts? Options?