How to outsmart bank's marketing people?

[Lotana]

Recently I noticed that a number of sweet promotional offers from our banks was on the rise. To the routine "specials" of honeymoon mortgage rates? they've added agressive returns on deposits (up to 6%) and very low rates on balance transfers.

Of course, the rationale behind this is to get the punters in and then to either cross-sell another product, or to change to standard rates at some point.

So far, I have been unsuccessfull in using these promotios to my advantage. For instance, a simple application for a deposit account with BankWest (they pay 6%) dragged by their processing people to the point when I said: "enough!" They were asking for a document after a document picking on typos in addresses etc. I gave up. After thinking about it I came to a conclusion that perhaps they checked my profile somehow (credit rating and maybe some other sources) and decided that I am not likely to buy any other products from them?

Now, I received a letter from Citibank. They offer a loan account with pre-approved credit limit of up to $25,000 on balance transfers. The interest rate is 4.9% on the transfered balances for life. My idea is to partly refinance my margin loan (currently at 7.7%), pay them interest only (or abit more if their minimal repayments are higher than the interest) and don't use the account for anything else. My gut feeling is that they will not approve my application for the same reason. Could anyone suggest a strategy to get it approved?

My credit history is clear, I match Citibak's lending criteria for this offer (income and age) and have a large mortgage and a few properties.

Lotana

 

[Glebe]

Do you have a URL to the Citibank 4.9% product by any chance?

 

[Davidr]

Do you have a URL to the Citibank 4.9% product by any chance?

http://www.citibank.com.au/portal/citiwm_home_center.jsp?frameset=centerFrameset&productID=Loans&path=/augcb/english/promo/det/promo_rc_4-9offer.htm&frameval1=wowWorkID&framevar1=workID

link from http://www.citibank.com.au

Cheers,
David

 

[quiggles]

I think the product only applies to credit card balances.

 

[always_learning]

* 4.9% interest rate is only available on balances transferred with this offer. † The transferred balance will be repaid first. Any transactions made other than with this offer are at the preferred customer rate, currently 15.49% p.a. The customer rate interest rate is variable and subject to change and Citibank credit criteria. ^ Government charges and a late payment fee apply. # The credit line of $5,000 to $25,000 is subject to Citibank credit criteria. Existing customers are not eligible for this introductory offer. Applications may not be accepted if you have accepted another Citibank offer in the last 9 months. Terms and conditions apply and are available on request. Allow up to 10 working days to process your application.

Get the card, but dont buy anything with it!

 

[dee]

why not drawdown your max limit on your current card -say 15k and stick that in shares
Then use citibank to transfer the credit to them at 4.9%
That is an excellent rate to invest 15k

 

[dee]

The ready credit is really interesting
Its been discussed previously on the forum
But it looks very useful to fund renos, or a quick deposit without any paper work. Obviously you would later refinance to get a lower interest rate but still very useful.
I like the fact that it comes with a chequebook - which is still required in this day and age!

 

[Lotana]

Dee, in the scenario that you suggested, if they don't approve the 15K I may be left with a high-interest debt!

Lotana

 

[Lotana]

The ready credit is really interesting
Its been discussed previously on the forum
But it looks very useful to fund renos, or a quick deposit without any paper work. Obviously you would later refinance to get a lower interest rate but still very useful.

I'd appreciate if anybody introduced me to a place where I could refinance at a lower interest rate than ReadyCreddit's 4.9% (except for Derivex, of course).

Lotana

 

[dee]

Dee, in the scenario that you suggested, if they don't approve the 15K I may be left with a high-interest debt!

Yes you could!
but you could take out the 15k, put it in your offsett account or ING 5.25% account then apply
if you are approved then it transfers over to citibank.
If not approved just repay the 15k back to your original credit card
The cost of this would be about 40-60 dollars in credit card interst if it took you 10 days to have it approved.
Personally I cant be bothered
but still if you invest 15k and are able to get 15% (big assumption) in the sharemarket - effectively 10% (take off 4.9% ) - then thats $1500 a yr.
or $2500 if you use it to the limit of 25k

The key is that you need to put the money in something that has an underlying return of >4.9% straight away, or even in ING 5.25% temporarily till you find an investment opportunity

"I'd appreciate if anybody introduced me to a place where I could refinance at a lower interest rate than ReadyCreddit's 4.9% (except for Derivex, of course)."

I meant if you used readycredit at their standard rate of 15% or so that youd want to refinance that to a usual rate of around 7%.