Don’t Feed the Alligators

A Personal Finance Blog from a Small-Scale Landlord’s Perspective
Rushing to get it all done

Creative Commons License photo figure credit: booleansplit

In the original post on this subject, I outlined the almost comical amount of difficulties I faced in trying to move approximately $44,000 out of our Money Market fund at Vanguard and into our checking account so that we could pay the balance on our Chase Freedom card.  You may also recall that the reason why our balance was so high is that we were exploiting a 0% interest rate on purchases for one year — otherwise known as a form of arbitrage.

Picking up where I left off, the plot gets thicker before finally thinning out for good:

The good news is that the payment from the Vanguard check arrived at EverBank on September 8th.  The bad news is that I didn’t even consider the fact that it could take days before the check cleared.  Because of the very large amount of the check, the bank cleared it in increments: I got a $100 credit on day 1, a $5000 credit on day 4, and the total was credited on day 7.  Each day, starting on September 10th, I had to move my online bill payment from that day to the day after the final schedule payment in hopes that the check would clear the next day.

After doing this for 3 days straight, I discovered that the Chase website has an option for making payments online.  This option requires you to enter your bank’s routing number and the account number from a check.  “Great!”, I thought.  But there must be a catch to this also.  I emailed customer service and asked what the fee was for this, what the maximum amount I could pay at any time was, and how long it took to post to my account.  I was told that there was no fee, the only limit to the amount I could pay was the total of my credit card balance (in other words, I could not overpay my account), and that the payment posted on the same day as long as it was made before 4pm.

At this point, I canceled all of the scheduled billpay payments and went about setting up the payment on the Chase website.  Wouldn’t you know that I discovered another catch?  The website, contrary to the information from customer service, limited me to a payment of $25,000.  Additionally, I could not set up another payment until 3 days after the first payment.  Luckily, I still had time.  The first payment was set up for the 13th of September and the second payment was set up for the 16th.  Both payments executed properly, and I met the September 17th deadline to get the entire balance paid off by the due date.

Whew!  In total, I paid a lot for this in stress, as well as the $20.71 FedEx overnight fee to get the check from Vanguard as soon as possible.

Lessons learned and next actions:

  • We are going to fill out the form that would have allowed us to transfer the money directly from Vanguard to EverBank.
  • Never trust what a customer service person tells you — even if you get it in writing.
  • Plan ahead!

3 Responses to “Adventures in Arbitrage — Update”

  1. Rachel Says:

    You said in email that you’re surprised I didn’t say “told you so”. No need, you said it yourself: I paid a lot for this in stress.

    So, you made about $680 and experienced some amount of stress for a few days. That’s not unreasonable — seems to me it’s near the going rate for miscellaneous income, in fact. You could have done much the same by working as a temp for a few Saturdays. Was it worth it? Would you have been better off doing odd jobs to earn extra money instead, or taking the time (also a few days, probably) to sell $680 worth of stuff? There are lots of ways to earn a few hundred dollars.

  2. MITBeta Says:

    You got me, Rachel! However, the total amount of time that spent with this over the whole year was not that much, and never that much at a time. You’re spot on with some other suggestions on how to earn some extra income. I was just trying to see if I could get something for nothing. :)


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