This article is for those who are really really disciplined in controlling spending their money and are into the habit of saving money, i.e. save at least 10% of their monthly salary/income. If you have no savings and finding it hard to stay afloat, DO NOT READ THIS ARTICLE as you will definitely 100% be kidding yourself that you are going to earn FREE Money because you are sure to end up deeper in the shit hole of debt!
If you are new to my blog, first thing you should do is click here now and read my FREE Credit Card Tutorial 2018 where you will be taught the basics of owning a credit card and most important of all, not to be tricked into the bottomless shit hole of debt.
After you have read the above, please click here to my Balance Transfer Plan Tutorial 2016 where you will be taught:
- How you can benefit from 0% Balance Transfer Plans – (1) To Earn FREE Pocket Money or (2) To Save On Interest Charges on your existing credit card Outstanding Balances.
- Pros and Cons of Balance Transfer Plans offered by various banks. Other than you needing to repay the 0% Balance Transfer, the other most important thing to remember before signing up with a Balance Transfer Plan is that you should choose one where the Repayment is in Equal Installments.
- If you refuse to follow my advise above and go sign up with say HSBC Balance Transfer Plan, you may be imposed interest on your new transactions as you are deemed to have Outstanding Debt in your HSBC Credit Card Account. Or in HLB Balance Transfer Plan, you are sure to be imposed some interest charges with their 0% BT because you can only settle the full Outstanding BT Amount a day after it expires or else you will be penalized!
Only after you have read the above two tutorials, then proceed to read the rest of the contents below.
Hong Leong Bank Balance Transfer Plan – 0% 6 Months versus 0% 12 Months
As of April 2018, HLB is offering 2 Balance Transfer Plans, i.e. 0% 6 months and 0% 12 months. The main difference between these two BT Plans is that for the 0% 6 Months BT Plan, the money can be transferred directly into your Current Account or Savings Account (aka CASA) with any bank and not necessary to pay off your credit card Outstanding Balance!
HLB 0% 12 Months Balance Transfer Plan – it allows you to pay off 3 credit card outstanding balances.
HLB 0% 6 Months Balance Transfer Plan – it allows you to pay off 3 credit card outstanding balance OR transfer the money straight into your Savings Account with any bank of you choice!!! Please refer to image below:
Hong Leong Bank 0% 6 Months Balance Transfer – It Is So Freaking Easy To Earn Free Money
For this Personal Finance Tutorial, I will purely touch on the HLB’s BT Plan where you can have the money deposited into your savings account so that you can earn FREE Money.
First and foremost, applying for the HLB’s 0% 6 Months Balance Transfer Plan is so freaking easy. You can either call their Customer Service or perform it over the internet via HLB Connect where it will be approved within minutes!!! And you don’t even need to submit any document.
Unlike most Balance Transfer Plans that requires us to repay back the debt in equal installments, HLB BT only requires the debtor to pay minimum 5% of the BT Outstanding Balance/Amount monthly (or minimum RM50). What this means is that you will have more money every month to invest into Fixed Deposit versus equal installment repayments.
Well, when I logged on to my HLB Connect, it seems that I am only allowed to transfer up to RM49,900 into my Savings Account. I shall use this said amount and see how much I can earn from utilizing this 0% interest 6 months loan.
Below are the important points to remember about the HLB 0% 6 Months Balance Transfer Plan:
I apply for the 0% 6 months BT on 29 April 2018 via HLB Connect and was approved instantly.
The Balance Transfer Plan EXPIRY DATE is on 29 October 2018. (For HLB BT, the expiry date is extremely important as you will be imposed RM70 if you settle the BT earlier).
The money is credited into my Savings Account on 2nd May (HLB states in 2 working days the money will be credited into my account).
My Credit Card Statement Date is on 5th of every month.
My Credit Card Payment Due Date is on 25th of every month (i.e. 20 days after Statement Date).
I have no other money in my other Savings Account, i.e. I am broke as hell.
Month of May (Month No.1)
In view that my Credit Card Statement Date is on 5th of every month, it means that by 25th of May 2018 I must make minimum payment of 5% or RM2,495 (5% x RM49,900).
Therefore, on 2nd May I will deposit RM47,405 (RM49,900 – RM2,495) into a 1 month FD earning my 3% interest p.a.
The balance RM2,495 shall be parked in my Savings Account earning me 0% interest and shall be used to pay my HLB’s May Credit Card bill before 25th May.
Month of June (Month No.2)
From placing RM47,405 into the one month FD, I will earn RM118.51. Therefore, on 2 June 2018, I would have RM47,523.51 (RM47,405 + RM118.51).
Taking into consideration that I will need to make minimum payment of RM2,370.25 (5% x RM47,405), I shall park this said amount into my Savings Account so that I can make payment on 25 June 2018.
The balance RM45,153.26 shall be places into 1 month FD again.
Upon payment of 5% BT on 25th June, the Outstanding Balance Transfer Amount = RM47,405 – RM2,370.25 = RM45,034.75
Month of July (Month No.3)
From placing RM45,153.26 into the one month FD, I will earn RM112.88. Therefore, on 2 June 2018, I would have RM45,266.14 (RM45,153.26 + RM112.88).
Taking into consideration that I will need to make minimum payment of RM2,251.74 (5% x RM45,034.75), I shall park this said amount into my Savings Account so that I can make payment on 25 July 2018.
The balance RM43,014.40 shall be places into 1 month FD again.
Upon payment of 5% BT on 25th July, the Outstanding Balance Transfer Amount = RM45,034.75 – RM2,251.74 = RM42,783.01
Month of August (Month No.4)
From placing RM43,014.40 into the one month FD, I will earn RM107.54. Therefore, on 2 August, I would have RM43,121.94 (RM43,014.40 + RM107.54).
Taking into consideration that I will need to make minimum payment of RM2,139.15 (5% x RM42,783.01), I shall park this said amount into my Savings Account so that I can make payment on 25 August 2018.
The balance RM40,982.79 shall be places into 1 months FD again.
Upon payment of 5% BT on 25th August, the Outstanding Balance Transfer Amount = RM42,783.01 – RM2,139.15 = RM40,643.86
Month of September (Month No.5)
From placing RM40,982.79 into the one month FD, I will earn RM102.46. Therefore, on 2 September, I would have RM41,085.25 (RM40,982.79 + RM102.46).
Taking into consideration that I will need to make minimum payment of RM2,032.19 (5% x RM40,643.86), I shall park this said amount into my Savings Account so that I can make payment on 25 September 2018.
The balance RM39,053.06 (RM41,085.25 – RM2,032.19) shall be places into 1 month FD again.
Upon payment of 5% BT on 25th September, the Outstanding Balance Transfer Amount = RM40,643.86 – RM2,032.19 = RM38,611.67
Month of October (Month No.6)
Note: If I have not been paying the minimum 5% in any of the previous month, automatically the Outstanding Balance Transfer Amount will be imposed 18% interest.
Now, this month is when my Balance Transfer Expires, i.e. 29th October 2018
From placing RM39,053.06 into the one month FD, I will earn RM97.63. Therefore, on 2 October, I would have RM39,150.69 (RM39,053.06 + RM97.63).
Outstanding Balance Transfer Amount as of 2nd October is RM38,611.67.
My Credit Card Statement on 5th October will show that I will only need to pay RM1,930.58 (5% x RM38,611.67) prior to 25th October 2018
In this month, if I only pay the minimum 5% payment and deposit the balance into FD that matures on 2nd November to earn interest, it MAY be BIG mistake. This is because from 30th October onward, the Outstanding Balance Transfer Amount will be imposed 18% interest!
And I don’t have any money in my other Savings Account. Like I assumed at the very beginning, I am broke and trying to earn some FREE money.
So what should I do? Well, I will then park the entire balance RM39,053.06 into my Savings Account and earn close to nothing. (Tip – if you have a child, the HLB Children Account is pretty good as it earns you close to 1 month FD interest rate calculated on a daily basis).
Come 24th October 2018, a day before my credit card Payment Due Date, I will make payment of RM38,601.67 (Outstanding Balance Transfer Amount as of 2nd October RM38,611.67 – RM10).
With the above, I have yet to settle the Outstanding Balance Transfer Amount before it expires on 29 October 2019.
Actually I can first make payment of RM,930.58 (5% x RM38,611.67) prior to 25th October 2018 (Credit Card Payment Due Date) and the balance just before 29th October 2018 (Balance Transfer Expiry Date) leaving only RM10 Outstanding Balance Transfer.
On 30th October I shall then make payment of RM11 towards my Credit Card Account to Settle In Full the Balance Transfer Plan. Why add RM1? Remember, you will be imposed 18% on the Outstanding Balance Transfer Amount after the expiry date.
RM10 x 18% x 1day/365 days = RM.004 interest!!! We give HLB RM1 lah, hahaha
So from this exercise, how much do I earn?
On 2nd October, I will have RM39,150.69.
Outstanding Balance Transfer Amount as of 2nd October is RM38,611.67.
FREE Money earned = RM39,150.69 – RM38,611.67 – RM1 (for 1 day interest) = RM538.02!
Now, if you ask me, nowadays I will tell you this is damn stupid! Earn roughly 1% FREE Money by taking out RM50,000 loan! When shit happens (you forget to make payment on time or worst case you go into coma and wake up months later), believe me shit does happens, not only will you be stuck with a huge debt but you will be imposed 18% for being greedy. And if you die, the ineterest will keep accumulating and your loved ones will end up getting less from your inheritance or worst scenario be pulled into your shit.
And HLB has been offering this kind of Balance Transfer for years and years. If they are not making money (i.e. imposing 18% interest on their cardholders), you think they will be offering this “fantastic” deal where you can get 0% Interest Loan? I tell you, banks do not offer you 0% Balance Transfer Plans to help you but to make them more money!!!
Once again, this Balance Transfer thingy where cash is transferred into your bank account to make FREE Pocket Money is not for everyone. More likely it will make you poorer as you will spend even more with your credit cards because you will fail to realize that you are owning the bank money until come the very end of the last month the BT is due.
Like I mentioned in my article, Be Prepared For Tomorrow, you want real money, plan and work for it, there is no short cuts…….. and if you are able to save whatever you earn, you will be rich in no time.
Having said the above, if you are one that has no debts and have substantial savings and have no issues to sleep soundly in the even shit happens, then I guess playing Balance Transfer to earn pocket money is a way to get cheap thrills, hahaha.
Another Personal Financial Tutorial by GenX