Absolute stoozing disasters - anyone had any?

Horseygal_2

Hi I'm considering stoozing but I want to be aware of the absolute worst that could happen. Anyone had any real disasters? :eek: I want to go into this with my eyes wide open so I would appreciate the wisdom of your experience. Many thanks x

sdooley

Well the obvious mistake you could make would be to 'dip into' the savings pot, such that you can't cover the stooze at the end of the term. Or forget the deadline and pay interest at the end.

Also if you pay a balance transfer fee at 3% you might not make a profit if you are a taxpayer and the money isn't going in an ISA, depending on how long the transfer period is and how good your rate is.

But the absolute worst disaster would be to miss a payment and lose your 0% rate just after starting the stooze.

Clariman

Horseygal wrote: »

Hi I'm considering stoozing but I want to be aware of the absolute worst that could happen. Anyone had any real disasters? :eek: I want to go into this with my eyes wide open so I would appreciate the wisdom of your experience. Many thanks x

The risks are well documented here http://www.stoozing.com/risks.htm (I would say that, given that I wrote it! )

LongTermLurker

I seem to remember someone saying they'd stoozed tens of thousands and were investing it in single company shares - now this guy kept coming back saying he was climbing like a rocket, but I never did hear what happened in the end. So the worst thing would be a misjudgement that led to the whole stooze pot being lost! (A few years ago you could have gone one step further and put it into precipice bonds, giving you the possibility of being left with a bill for 3 times what you borrowed!) However, that's not what it's all about - so long as you don't gamble, spend or lose the original capital and remember to pay it back on time you're onto a winner imo.

Oh yeah, and make sure the account you're saving it in pays more interest than you're being charged :rolleyes:

Horseygal_2

Sdooley - many thanks for your post. I am really on the fence about stoozing part of me feels guilty like I would be doing something underhanded and for this reason I just know I wouldn't raid the stooze pot. (A feeling the money isn't mine - if you know what I mean) The other more mavrick part of me relishes the revenge on those evil credit companies (Very wrong reason for even considering it!! I know)

I am quite anal about checking accounts/balances to the point of OCD and would set up minimum repayment DD's - so again low risk on missing a payment and losing the 0%. And my savings accounts are the higher interest rate ones recommend here on MSE. So do I go for it or not??

Clariman - a great article and brilliant site!! :T Alot of food for thought there. I am curious as to why receipt of state benefits wouldn't be ideal for a stoozer. Are you talking Working Tax Credit & Child Tax Credit here? - it's just most families are in receipt of these. Are there implications with the DWP if they become aware of what you are up to? I know with certain benefits you cannot claim if you have more than £16K in savings but wouldn't a £16K credit card debt cancel that out? Or am I being naive?

Long Term Lurker many thanks for your advice I have never heard of precipice bonds - I was just thinking of stashing the cash in my 6.5% saving account for 15 months or so til the 0% runs out, then either being really brave and balance transfering to another 0% or a total chicken paying it back and just keeping the interest made.

I still doing some serious thinking about whether I will take the risk or not. Though I am quite relieved there are no hideous stories here about people losing thousands.

Clariman

Horseygal wrote: »

Clariman - a great article and brilliant site!! :T Alot of food for thought there.

Thanks

I am curious as to why receipt of state benefits wouldn't be ideal for a stoozer. Are you talking Working Tax Credit & Child Tax Credit here? - it's just most families are in receipt of these. Are there implications with the DWP if they become aware of what you are up to? I know with certain benefits you cannot claim if you have more than £16K in savings but wouldn't a £16K credit card debt cancel that out? Or am I being naive?

I am not an expert on the different state benefits, but having savings above a certain level does mean you become inelligble for some state benefits. At least one stoozer has found this out to their cost and the DWP said "rules is rules" even if you are borrowing to save.

Clariman

sdooley

The income from your stoozing pot can count towards your annual income for tax credits purposes - see the Revenue's tax credits calculator which says:

What is the total amount of any [URL="javascript:DoGlossary('otherincome')"]other income[/URL] including pensions over £300 you and your partner have received [URL="javascript:DoGlossary('beforedeductions')"]before deductions[/URL] from 6th April 2007 to 5th April 2008? (Do not include earnings, [URL="javascript:DoGlossary('maintenance')"]maintenance[/URL] or [URL="javascript:DoGlossary('childrensincome')"]children's income[/URL].)

However they also say:

We do not need to know about any tax free savings, for example

• ISAs
• TESSAs
• PEPs
• Index Linked and Fixed Interest National Savings Certificates, and
• Children’s Bonus Bonds

So if you want to stooze into an ISA, you're ok and you're also ok if you don't have more than £300 savings income a year (that's how I read it, though the £300 might mean just pensions).

johnllew

Clariman wrote: »

I am not an expert on the different state benefits, but having savings above a certain level does mean you become inelligble for some state benefits.

WTC & CTC are unaffected by the amount of savings you have.

sdooley wrote: »

you're also ok if you don't have more than £300 savings income a year (that's how I read it, though the £300 might mean just pensions).

£300 is deducted from all other income (pensions and interest etc) before it is added to earnings in arriving at the total amount to be included in the tax credit calculation.

Anon

In answer to the original question, nearly had a disaster this month - replacement new stooze card only arrived last week which was too short a time to arrange the BT in time. Therefore left paying off my Capital One until the final week and for some reason best known to the banking system my debit card was being rejected - fortunately accepted it 3 days before the deadline and has gone through in the nick of time. Important lesson - ensure that the card is paid off before the deadline!

Anon

sdooley

johnllew wrote: »

WTC & CTC are unaffected by the amount of savings you have.


£300 is deducted from all other income (pensions and interest etc) before it is added to earnings in arriving at the total amount to be included in the tax credit calculation.

Aren't these two statements contradictory? I think I understand you to mean that there is no maximum level of savings to allow you to take tax credits like there is with means-tested benefits. However WTC & CTC can be affected by your savings, because they generate interest, which is taken into account in your tax credit calculation (withdrawl rate of 39p in the £).

johnllew

sdooley wrote: »

Aren't these two statements contradictory? I think I understand you to mean ...

No - I meant exactly what I said: WTC and CTC are unaffected by the amount of one's savings. Those savings may, for example, be in ISAs, National Savings, Friendly Societies and other exempt vehicles. It is taxable interest from savings that affects WTC and CTC; something quite different.