Financial institutions frequently offer low introductory interest rates to entice individuals to open and use credit accounts with their firm. This paper examines the possibility of earning arbitrage profits by taking advantage of these special offers. We develop a formula to measure the profit...

This paper examines how changes in the minimum payment percentage and effective maturity of introductory offers affect credit card arbitrage. Credit Card arbitrage involves taking a cash advance on, or making purchases against, a credit card that offers a low or zero percent introductory...