Related FAQ's & Guides
Q. How long is the longest 0% balance transfer deal available?
A. 0% balance transfer credit cards may no longer be the new craze of the financial world – but their popularity has yet to abate and neither has the competition between the credit card companies.
Q. How much will I have to repay each month if I use a 0% balance transfer credit card?
A. 0% balance transfer credit cards require you to pay at least the minimum amount each month to retain the 0% deal and to avoid any missed payment charges.
Q. Why do I have to pay a transfer fee? Can I avoid paying it?
A. Balance transfer handling fees - or transfer fees for short - were introduced by credit card companies to recoup lost profits from 0% rate offers. It’s now become a real rarity to find any 0% offer without a transfer fee – and when you do, the 0% period tends to be no longer than 6-months max.
Making Money through Stoozing
As MBNA re-launch their 'Platinum Plus' credit card with an overt advertisement for cardholders to 'stooze' - we couldn't help but take a particular interest in the reasons behind why MBNA have decided to openly allow cardholders to make money from them.
How to stooze off your groceries
Credit cards are all about the offers - use them wisely and you really can be quids in. Find out how to turn a profit on your monthly grocery budget by borrowing low and saving high!
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Stoozing is a cunning way to make money from a 0% interest credit card without having to do anything other than either spend on the card or transfer funds from the card into a high interest savings account.
Stoozing does require you to be extra organised and responsible with your finances – because if you let things slip, you could find yourself hit with more interest to pay than interest earned. Some things to remember about stoozing are:
- Stoozing is a method of making a profit from your credit; it does not offer extra cash to spend.
- Stoozing realistically takes a year to turn a profit – this is because most high interest savings accounts pay interest at the end of the year, and the best 0% credit card deals offer 0% for a year (or more).
- You need to be very vigilant and know exactly when your 0% interest credit card period ends.
- You need to decide whether you want to earn interest in a high interest savings account or save interest by paying additional funds onto an offset mortgage savings account.
- If you want to earn interest – you then need to decide whether you want to earn interest by transferring 0% credit into a savings account, or by using 0% credit to spend and saving your monthly salary into a savings account.
How to benefit from stoozing...
If you decide you want to try stoozing, you first need to find a credit card that offers 0% interest for a generous period – the longer the better.
You can also look at cards that offer, in addition to the 0% period, other rewards such as cash back or incentives for opening an account. This can make the whole process even more lucrative for you.
Once you have your 0% interest credit card you can use one of two main methods.
- Stoozing by 0% balance transfers
If a 0% balance transfer credit card allows it you can transfer the money up to the credit limit into a high interest savings account.
You can choose to simply move the money to a high interest savings account and earn interest on the balance – or if you have an offset mortgage you can use the funds in a savings account to save interest on your mortgage.
Transferring to a high interest savings account has the benefit of earning interest on the entire credit limit granted – as soon as your account is open and the money is transferred.
However, the downsides are making sure you get a 0% balance transfer credit card that will allow you to move the money to a savings account.
Also, pretty much all 0% balance transfer credit cards – especially those offering the longest 0% periods – now charge a transfer fee for moving a balance. So this cost must be factored into the equation – so make sure the transfer fee is less than the interest you’ll earn on a savings account.
- Stoozing by 0% purchases
Another stoozing method is to use a 0% purchase credit card to pay for all things that you would normally pay with your wages, thus leaving your wages free to be transferred into a high interest savings account.
Spending on a 0% purchase credit card and putting your monthly salary into a high interest savings account is a somewhat simpler method of stoozing, and can be done on any 0% purchase credit card.
As long as you just use the 0% purchase credit card for purchase transactions (no cash transactions or balance transfers) and you repay the balance before the 0% period ends – there will be no added costs to deduct from the interest earnings.
However, the downsides of this type of stoozing are making sure you do save your wages and don’t spend them prematurely – if you do, you could see yourself with a year’s worth of shopping needing to be repaid and not enough in your savings account to do so.
What do I need to be aware of when stoozing?
You must be very careful that you do not make any cash transactions on your 0% interest credit card, as this will mean that you are paying fees and interest rather than having a 0% interest debt, which is what you are aiming for.
Depending on whether you choose to stooze by 0% balance transfer or 0% purchase may mean there are other transactions to avoid as well.
0% balance transfer credit cards should not be spent on – unless they offer a 0% period on purchases for the same length of time.
Similarly, a 0% purchase credit card should only be spent on – that’s paying for goods or services from retailers or companies – so no cash withdrawals, foreign currency, gambling, bill payments or balance/money transfers.
Also, do not take out card payment protection, as this will also cost you unnecessary money.
Of course, the main things to be aware of when stoozing is when your 0% deal ends and repaying the 0% 'debt' before the standard interest rate kicks in.
Remember, you must always make at least the minimum monthly payment to retain the 0% promotional deal – this will be about 2% - 3% of the 0% balance.
What do I do when the 0% period ends?
When the 0% interest free period is drawing to an end, you have a couple of choices.
- 0% balance transfer stoozing...
You can either take the initial deposit from your savings account and pay off the 0% credit card in full - which will leave you with any interest that has been made as profit.
Alternatively you can make sure that you have another 0% balance transfer credit card at the ready, and you can then transfer the balance on your old card as the interest free period draws to an end, enabling you to enjoy a further interest free period and leave the initial deposit in the high interest savings account for even longer.
0% purchase stoozing...
If you are using a 0% purchase credit card to stooze – you can always move the balance to a 0% balance transfer credit card and simply refer the repayment for another year – keeping your wages earning interest for longer.
Or, you can repay the current 0% purchase credit card with your saved wages – keep the interest as profit – and then decide whether you want to take out another 0% purchase credit card and continuing stoozing – or try stoozing by means of a 0% balance transfer.
Which credit card do I need to stooze?
If you intend on 'stoozing' by means of transferring 0% credit into a high interest savings account – or to a savings account to use against an offset mortgage - then you need a 0% balance transfer credit card.
If you want to ‘stooze’ by spending on a 0% credit card and saving your wages into a high interest savings account – then you need a 0% purchase credit card.
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