When can I safely use CC-BY license on arXiv?
Using a CC-BY license on arxiv.org will be fine whenever you don't need to retain exclusive rights. CC-BY is a non-exclusive license, and you are free to grant as many non-exclusive licenses as you wish. However, you won't be able to grant a exclusive license thereafter, which is what most commercial publishers are looking for. The typical "transfer of copyright" would essentially be an exclusive license in these cases.

If you intend to publish the paper submitted to arxiv.org with an open access publisher, it should generally work with a CC-BY license. Most open access publishers require only a non-exclusive license to publish a paper, so there would be no conflict here. It may however not be possible to go to a publisher which requires either an exclusive license or a copyright transfer afterwards.

Interestingly, a copyright transfer may be less restrictive than an exclusive license in this case. In principle, it should be possible to transfer copyright even if a license have already been granted to someone else (that's how a company would buy software from another company that has already been licensed). So, why not try the following with your next paper: 


Submit it to arxiv under a CC-BY license.
Submit to a commercial publisher, and add a statement like this to the copyright transfer agreement:



  "This agreement is with the understanding that a non-revocable, non-exclusive license under the terms CC-BY has been granted to a arxiv.org."


I wonder how they'd react...