[Editor's Note: This is a guest post from Dr. Wise Money, who as you'll recall used credit cards to pay for medical school in order to save thousands in student loan interest. She is now a resident, but continues to use credit cards to improve her financial situation. In this example, she manufactures spending by opening bank accounts with a credit card. I have no financial relationship with the author.]

I have always worked really hard: 7 jobs in college ranging from MCAT tutor to nanny. I even worked two jobs in medical school as a single mother. As a resident, I'm currently working four jobs if you count being a mother as one of them!  So it is truly nice to make some money that takes little of my time. After all, time is the only irreplaceable resource in our lives. Time can earn money, but money can't buy back your time, at least not retrospectively.

This post will detail step-by-step how I made money by churning cash (interest-free from big banks) in the circle of money. This particular example was using Citibank and BOA. But you can apply the same principle to other banks as long as you do your research first. In fact, prior to publication Citibank stopped allowing me to do this, probably because they noticed I had opened and closed multiple accounts with them. [Further research Citibank doesn't allow this anymore.-ed] But it may still work for you and there are other banks out there that allow you to fund a new bank account with credit cards with various limits. The key is to get a bank where you can charge a new deposit to a 0% card without it counting as a cash advance. Here's a list. 

drwisemoneylogoBut make sure you read all the fine print and avoid land mines such as the transaction being processed by your credit card company as “cash advance” rather than purchases. Research before you make the leap. If you are cautious and avoid the land mines, you can get rewarded pretty handsomely for your time. Not to mention, if you are in a pinch and need cash, this is great way to borrow cash at 0% interest for a little while (12-21 months depending on the 0% APR promotional period of a card.)

You can repeat the cycle as frequently as the processing time allow you, and like I did, make hard cold tax-free cash. I had credit limit of 55k on the credit card I use. Imagine an attending with 100k limit on a card. He or she can easily make 1-2k every time they run the following operation, which takes about 20 minutes on the computer. Better still, hire your tech savvy kid to do the secretarial job for you and fund their Roth IRA for their legitimate work!

If you are interested in finding out how to

  • Borrow large sum of money from banks at 0% to negative interest rate for 12-18 months and/or
  • Make tax-free money with a few mouse clicks by moving money between 2 banking institutions, please read on.


  1. Open the cheapest/free online account at the bank
  2. Choose to fund the bank account with a CREDIT CARD
  3. Print out the authorization form. Complete form and fax it.
  4. Online account opened on day 1. Form faxed day 3. Citibank gets deposit on day 5. Credit card is charged on day 6. Funds available to pay bills on day 14 in $10,000 maximum increments. All funds paid back to credit card on day 19.
  5. The entire cycle takes 14 business days, well within the grace period of the credit card cycle.
  6. Each additional $10,000 you are moving will add an additional 1 day to the cycle.

In addition, call the credit card you plan to use and lower your CASH ADVANCE limit to the minimum. This is a protective mechanism. This prohibits your credit card company from charging the transaction (funding a new checking account with the credit card) as a cash advance. Cash advance usually has INSTANT interest in the magnitude of 20-30%. You will lose way more than you make if your credit card company charges this transaction as cash advance. By lowering your cash advance limit and requesting an amount higher than your cash advance limit, you make sure that your credit card company can only process your transaction as a PURCHASE (and give you cash back/point rewards) OR block the transaction. This prevents you from paying more interest to the credit card company than the rewards you get from them.

So at the end of this, all that was charged on the credit card when funding the new Citibank account was paid off completely by the money deposited into the account.

Circle of money:

Charge credit card –> Fund new checking account –> Pay off credit card

Each cycle produces 1.1% of the money moved because it was processed by my credit card as a purchase and produced tax-free cash rewards. The cycle takes me less than 30 minutes to do the paperwork, and in my case generated $550, or $1,100 an hour. After six cycles, that was $3,300. If it is still confusing, check out my video on it.

I hope you make some tax-free money too. Banks are getting smarter & closing this highly lucrative (for common people like you & me) opportunity by lowering the limit of how much you can fund a new checking account with a credit card or simply prohibiting credit card funding all together. But the Citi-BOA combo worked for me (I can no longer do it anymore, my name is probably banned from the fact that Citibank effectively paid me $2,500 last year without gaining anything from me).

Hope it works for you!

What do you think? Do you try to use credit cards to make money? What are your favorite manufactured spending schemes? Do you think activities like this are a wise way to make some extra money, or foolishly playing with fire? Comment below!