Get Married and Get Free Money

Filed in archive Marriage and Finance on January 28, 2008

I talk to a lot of reporters doing stories on credit cards and related finance issues, and very very very occasionally I am embarrassed when they end up teaching me a thing or two instead of the other way around. George Gombossy of the Hartford Courant contacted me last week and by the time we were done talking, he'd schooled me on an unusual way to make money off of your bank of america credit card. He wrote about it yesterday:

Thank you, Bank of America and Chase, for helping to pay for my wedding.

The two banks, along with some others, are more than happy to help defray some of the cost of your wedding, having a baby, moving, retiring, losing your job, or even a nasty divorce.

Yep, this is your chance to take advantage of one of these banks, just as they did when you were one hour late in making a credit card payment.

You've probably been solicited for credit card insurance that will pay your credit card bills if you go on disability or if you die. It's generally a huge waste of money. But what Gombossy discovered is that Bank of America's insurance will also make your minimum payment for 3 months if you get married. And, as long as you cancel the insurance after those three months, you actually make a profit on the deal. Here's Gombossy again:

So let me get this straight, I said. If I enroll in this plan tonight, and I get married in the next two weeks, Bank of America will make three of my minimum payments on my credit card? And all it costs me is a one-time fee of 95 cents for each $100 of my balance? Yes, she replied.

And, I asked, I can then cancel and not have to pay another fee. Yes, she replied. The fee, if I don't cancel, would then be tacked onto my bill each month, increasing my balance.

Since I was carrying a high-balance, low-interest introductory loan (the maximum the policy covers is $25,000), I quickly calculated that the bank would be paying me about $500 a month in return for less than $250 from me.

Why would Bank of America do this? Maybe this is why:

In the first year, more than 1 million of its 40 million-plus credit card customers signed up, and according to them, unlike me, most stayed paying the 95 cents a month on each $100 of debt.

Most banks don't make offers unless they're going to make money from them, so in this case they're betting you will keep the credit insurance even after they've stopped making payments for you. The cost of the insurance will add up quick, and you'll end up in the hole.

I told Gombossy I thought this was a dangerous game for most people. But if you're smart and keep a close eye on your finances, this is a rare opportunity for free money.