Published January 13, 2015
Scott Bilker has 80 credit cards, a flawless credit score and tips on how to earn money by paying with plastic.
MOST FINANCIALLY SAVVY people know they should use credit cards with caution. They try to pay off their balances on time and in full each month, to avoid interest and late fees. And they avoid traps like convenience checks, balance transfers and teaser interest rates, which tend to skyrocket after the introductory period is over.
By all means, they're doing the right thing. According to Craig Watts, consumer affairs manager at Fair Isaac, the company that calculates credit scores, "the more conservative a person is about managing credit, the better his or her credit score will be." Conservative, Watts explains, means "having fewer accounts, keeping balances low, and opening new accounts only as needed, which means not very often."
So imagine our surprise when we found someone who for years has been doing exactly the opposite -- and yet sports a credit score in the 800s. (The median credit score, according to Fair Isaac, is 723, and it'll get a person the lowest interest rates from most lenders. Only one in 10 people has a credit score of 800 or more; the highest possible score is 850.)
Scott Bilker of Barnegat, N.J., holds 80 credit cards with more than $300,000 in total available credit. His total credit card debt: $10,000, all at 0% APR and, he says, all under control. Bilker, 38, tests his creditors' low-interest, balance-transfer and cash-advance offers, and reports back on his Web site, DebtSmart.com. Meanwhile, he not only avoids paying interest by using 0% APR offers -- he has actually made money from his credit cards. And we're not talking about cash-back rewards.
We recently asked Bilker to share his secrets.
SmartMoney.com: You have 80 credit cards. How did you get to this point?
Scott Bilker: It started in my last year of college. I turned to credit cards to finish (school) because I had to pay for tuition and things, and I had run out of money to borrow on student loans. My major was electrical engineering, so I applied my engineering analysis skills to finding the best ways to save money on credit cards. And then, as time went on, I realized that the more credit cards I had, the more I could save.
Later, when (my wife and I) purchased our house, we had about 24 credit cards and $24,000 in debt. We got approved with no problem. And then, my friends told me that I wasn't going to be able to get more credit. To prove them wrong, I then applied for every offer I got in the mail. I got approved for two out of three of them.
SM: You say you experiment a lot with the balance-transfer and cash-advance offers. What are some of the more unusual things you've done?
SB: I'll give you an interesting trick I've used just as a test. It's one of my advanced ones. I had a balance transfer offer (ed. note: at 0% interest in the form of convenience checks) from one credit card issuer, but the catch was that if you wrote the check to yourself, there was a transfer fee of $50. If you transferred the balance to another credit card, it was free. I had a card with $0 balance, so I transferred the amount I wanted -- $1,000 -- to that card. It had no balance on it. So that card gets paid $1,000 from the other card, right? So now it has a $1,000 credit and they sent me the check. I ended up avoiding the transfer fee that way, and I had the $1,000 cash.
SM: What are some creative financing deals you've closed with a credit card?
SB: Car purchases. I make sure I get the money into my bank account, and then once I get the money I'll just go and buy the car. I purchased my car like that, a 1995 (Ford) Windstar that I bought in 1997.
SM: What was the price?
SB: $14,000. What I did was take cash advances, and then I bought it upfront.
SM: And what was the interest rate on the cash advances?
SB: Everything was 0%, no fees. It was 0% for a year, but you see, in a year, I transferred the outstanding balance to another card with 0% interest. And when that ran out, I did it again. So I paid 0% financing on a used car, no fees, nothing.
SM: Tell us how you made $1,800 from cash advances.
SB: Initially, I wanted to see what would happen to my credit score if I took a bunch of cash-advances. I took four cards that had 0% interest, and then took the full cash-advance allowed: $65,000. I then put the money in a savings account. I had it for one year, and rates were at 3% at the time, so I made $1,800 in interest, minus the $100 in fees, and of course, I had to pay taxes on the gains. But still, instead of paying interest, I was making money.
But that wasn't my goal. My goal was to see if there were tricks, and there were. For example, Chase bank sent me a letter saying I could write a check up to my credit limit. And they had a $50 fee. But when they added the fee, I went $50 over my limit and they charged me a $30 over-limit fee. (When I challenged them on this) they waived that $30 over-limit fee. I have the transcript of that conversation on my Web site.
SM: So pretty much, you're experimenting for your readers' sake.
SB: I was experimenting on a grand scale.
SM: Do you do that a lot?
SB: From time to time. I'm planning on building an addition to my house next year and I'm going to try to finance the whole thing with credit cards at 0% rates, just to see if it can be done. Then I'll see what happens to my credit score in the longer term because I may try to keep that 0% for a few years, not just one.
SM: What's the longest you've been able to extend a payment at 0%?
SB: You mean by transferring from one card to the next? Still going! It's been over 10 years. I've got so many cards, and I have a list of offers all the time. Let me see what I have on my desk right now that I haven't used yet. I have one at 0% for a year for up to $10,700 in cash advances. Another one: 0% for a year, $4,500. Another 0% for a year: $8,500. Another 0% till June next year, $24,000.
SM: How do you keep track of all your credit cards? How do you use them?
SB: I use my credit cards for everything I purchase. I try to avoid using cash. I track them with software that I have on my Web site. I use worksheets that I developed in Excel and I've also written some other software in Access. Now I'm writing some new software and I'll make it available for everyone at DebtSmart.com.
SM: Do you have any credit cards with rewards programs?
SB: Yeah, but I'm not into rewards. I like cash-back. One time I had a transfer offer at 0% for a year -- this was a while ago -- and they gave me 1% of what I transferred back and six free rentals at Blockbuster. So I did the transfer, and they said when I go to Blockbuster they'd give me the money. When I went into Blockbuster, they gave me the videos and $60 cash. And I had 0%! That's the kind of reward I like -- because I like movies, and I like money.
SM: Do you have any advice for our readers on managing holiday debt?
SB: Here's a holiday trick: You use a department store card to make your purchases because you usually get discounts. Of course, the interest rates are high. But again, when the bill comes, you pay them off in full with a 0% card.
SM: Do you negotiate with your creditors a lot?
SB: My whole latest book ("Talk Your Way Out of Credit Card Debt," Press One Publishing) is about negotiating with banks. I have 52 phone call transcripts in my latest book. These are actual phone calls I've made when I got banks to reduce rates, waive fees, negotiate settlements, everything. The total I saved from these calls was $43,148, and it took -- I measured the phone time -- 6 hours 43 minutes. So really, these calls saved $6,423 an hour! It's very lucrative to call your banks and negotiate with them.