Legal Loophole Mastermind

I used to work in fraud detection. This is probably my first mention of that seedy little tidbit from my past.. but it's true.
My research skills were honed on that job.. and I'm still grateful for the things I learned about identity protection. I also learned more about people than you would think.. considering I sat at a computer desk letting my fingers do the walking all day.

Working in such rarefied atmosphere exposed me to what might be the most elegant and ambitious use of legal loopholes I've ever seen.

Here's the story.

My bank issued credit cards. If you made purchases and paid it off (15 day grace period) each month.. no interest, no fees. Also.. your credit report got a boost from each month of paid off credit use. If.. however.. you used it for cash advance.. there was no grace period, and interest accrued from day one.. also.. it was a small strike against your report.

This guy (my Loophole Hero)had taken a trip overseas about two years before we "caught" him.. and like many travelers.. he'd purchased his traveler's checks with his Mastercard. When he got his bill... the savvy mastermind realized that the Traveler's checks were billed as a PURCHASE... not a cash advance. He saw the opening.. and dove through it.
For two years.. he maxed out two high limit credit cards each month with traveler's check purchases that he coverted to cash and invested in short-term guaranteed returns, and then paid them off each month. One card had a due date of the 15th.. the other of the 30th. By rotating card use.. he was able to keep them paid off each month and never pay a dime of interest. What he DID with those free loans is even more interesting... He was earning 3.5% interest on money that didn't belong to him.. and getting an incredible credit card score in the process.

I still remember how my boss frothed at the mouth over that. You'd think he had robbed her personally.. when in fact.. there was absolutely NOTHING wrong with his scheme. He broke no laws.. didn't even stretch his credit use agreement.
However.. and it still saddens me to think about it (because anybody with that much gumption should be rewarded).. we canceled all his cards and gave him a fraud flag on his report. A fraud flag means.. at the very least.. that somebody is watching all the time(very frequent usage reviews). At the worst.. it means you can't get credit.

I still feel sorry for the man. Just because he figured out a way to beat the system.. he got nailed with a fraud flag.. and probably won't ever know why.

Want to try your hand at it? As far as I know.. the only catch is finding a card that charges Traveler's Checks as purchases.. not cash advances, but be sure to read the fine print just to be on the safe side. Look here for a no-fee one lowermybills