Let's just say that....

[SteveJ]

for arguments sake that I had an empty (no debt) credit card that has a credit limit of  £13,000 and that the bank have offered me a 0% loan for 12 months. In theory I could borrow £10,000 of the banks money (it would cost me a £300 admin fee), transfer that across to my savings account in Turkey at 8% and then just before the 12 month 0% offer expires transfer the £10k back to the bank, pay off the loan and pocket (less admin fee and tranfer fees and possibly some tax) the £800 I'd earned in interest, around £400 for doing diddly by my simple calculation

OK you CBF Bankers - where's the obvious hole that I've missed? 

[Scunner]

The exchange rate kicking you in the nuts  

[SteveJ]

Party Pooper 

[Brianbern]

Interest rate in Turkey is currently 6.5% & falling!

[SteveJ]

another one!

[Jim Fraser]

SteveJ - yes it will work - but you will only be able to bank it for 11 month to ensure the debt is cleared within the year, so the £300 admin charge and the tax being taken off at source will near wipe out your interest, but think positive - you will manage to buy a couple of beers with the profit (as long as the interest rate and the price of beer do not change drastically)

[SteveJ]

Thanks Jim - that's more like it. £10k invested and two free beers after a year. What's not to like about that deal?

[Scunner]

You shouldn't be to happy with a 2 beer profit Steve. 2 beers = 12 tl

This means you have a nett total sterling value of £10,004.33 using Jim's 2 beer profit.

But an increase in exchange rate of +0.01/£ - say from 2.76 to 2.77 over the entire year - takes your £10,000 investment 12 months ago from 27,600 TL back then, to a value of £ 9968.23 (27,612 TL/2.77) on re-exchange to sterling. So, for every 1 kurus increase in TL/£ exchange rate, you lose far more than the two beers you gained

Disclaimer: Exchange rates go up when you are going on holiday and down when you need pounds.

[sadler]

You obviously have too much time on your hands, Scunner!  

[jackstee]

Mind you, it may go the other way and he makes a couple of grand. ( My glass is half full by the way )