stoozing Have I got this right.

tazandtommy

Morning, I am looking into starting stoozing and just need to clarify.
Questions are in red

• Open a high interest savings account.

• Apply for a 0% credit card.

• Tranfer the balence into the savings account.

Would there be a charge for doing this, I have never had a credit card, but believe there is a charge for getting money out.

• Set up a direct debit to pay the minimum payment

Can you set up a direct debit from a savings account.

• When the 0% offer is up transfer the balance to a other 0% card.

Would it be easier to just pay off the card and apply for a new one, to avoid the transfer fee.

Thank you all sooooo much for taking the time to read this.:kisses3:

JimmyTheWig

You've got the basics of it right, but there's a couple of things missing.

1. If you pay tax and haven't got a cash ISA instead / as well as a savings aco!!!!.

2. Most cards only allow you to transfer a balance from another card. Some, such as the MBNA group (e.g. Virgin), Abbey and Egg, allow you to transfer a balance from a current account (as if to pay off an overdraft). Are you thinking of applying for one of these cards? If so, you could transfer the money into your current account and from there to your savings account. If not, you may find getting the money out of your credit card a little harder.

3. Yes there will be a charge for this balance transfer. Normally 3%.

4. If this is to be your first credit card you may not (depending on income and other factors) get a very good credit limit.

5. You cannot normally set up a direct debit from your savings account. This would have to be from your current account. You would have to withdraw money from your savings account to fund this in the normal way.

6. If you plan to extend your stooz with a new card you will have to pay the fee (as per my point 3) so paying off this card and applying for a new one wouldn't avoid the fee. Transfering the balance to a new card is a handy way of getting the money out of a new card (i.e. the new card wouldn't have to be one where you can transfer the money into your current account) but it makes things trickier in terms of timing. Up to you.

7. Golden rule number 1. Once you've done a balance transfer, DON'T use this card for spending.

8. Golden rule number 2. Don't spend the money in savings as you then won't be able to pay it back!

Clariman

You also need to check out the card's profitability. If you choose the wrong card(s) then you can lose money rather than earn money. Much as I rate the content of this site very highly, it doesn't cover all the considerations for stoozing and it worries me that people enter into it too lightly. So it is good to see you asking questions.

You need to decide what type of stoozing you want to do and you need to check that it is profitable. The stoozing calculator on MSE doesn't take into account the BT fee nor minimum payments which is rather dangerous IMHO.

I wrote the first ever Stoozing FAQ on the Internet (in 2004) because I was really concerned that people weren't aware of the potential pitfalls. I am getting the same feeling again.

MSE sponsors the Official Stoozing Website which I run with Stooz (who the technique was named after) which has a lot of resources and info for stoozers. There are detailed guides there, but the Quick Start Guide will answer many of your questions and leads on to the more detailed guides if you want them.

Clariman

tazandtommy

What does SBT stand for?

If I have a card with a £3000, and transfer the whole £3000 in to my current account, would they bill me for the BT or would they take it off the card. (which would send me over the limit)?


There is no way I am going to rush into this, I am doing it to get out of det not deeper.
I will be asking loads of questions before I even apply for and account of anysort

Clariman

tazandtommy wrote: »

What does SBT stand for?

Super Balance Transfer (as opposed to BT - ordinary Balance Transfer). BT offers were created to allow you to move debt from one credit card to another. However, a small number of lenders also let you move a bank overdraft to a credit card. We call cards that offer this SBT cards because they have that extra capability - a capability that stoozers need. You can find a complete list of SBT cards here http://www.stoozing.com/sbt.php

If I have a card with a £3000, and transfer the whole £3000 in to my current account, would they bill me for the BT or would they take it off the card. (which would send me over the limit)?

You would pay a BT fee on the transfer, but most lenders won't let you transfer 100% of your credit limit. One of the reasons they do this is to prevent the BT fee from taking you over your limit.

There is no way I am going to rush into this, I am doing it to get out of det not deeper.

To be honest, if you are in debt then you'd be better off using 0% cards as a way of reducing the interest charges on your existing debts rather than using them to stooze.

Clariamn
I will be asking loads of questions before I even apply for and account of anysort[/quote]

tazandtommy

Sorry me again when it say 0% is it 0% on purchases and BT, or Just BT how would I know/find out

I would need a card that offers 0% on BT cause I would be transfering the funds in to an account. Thats right isn't it

Clariman

tazandtommy wrote: »

Sorry me again when it say 0% is it 0% on purchases and BT, or Just BT how would I know/find out

You find out whether a card offers 0% on BTs or Purchases or both by reading the Credit Card's Summary Box and/or terms and conditions. The stoozing website has BT and Purchase credit card tables which provide an unbiased list of current credit cards to take the work out of it for you. Also read Martin's stoozing guide for his current top picks. However, always double check the Ts & Cs before going ahead.

I would need a card that offers 0% on BT cause I would be transfering the funds in to an account. Thats right isn't it

For conventional stoozing (or Fast Stoozing), you use 0% on BT cards. For slow stoozing (or Simply Spend stoozing) you use 0% on purchases cards. Read Martin's guide or the stoozing website's Quickstart Guide for an explanation of the different stoozing techniques.

As already mentioned, never make purchases on a 0% BT card and never make BTs on a 0% Purchases card as it will cost you interest. The only exception to this is where a card has 0% offers on BTs and Purchases where the length of the intro 0% deal is the same for both.


Clariman

JimmyTheWig

As this is your first credit card and the whole process takes a bit of getting your head around, you might be better off with a 0% purchases card and doing a slow stooz.

The disadvantage to this is that it takes time to build up your stooz pot and so you don't make as much interest. The advantage of it, however, is that there is no balance transfer fee.
While it is not risk free (e.g. if you miss a payment then you will get charged) you can, in effect, cancel the deal at any time by paying off the balance. With a traditional balance transfer stooz you have to pay the fee up front and it takes 6 months to recoup this in interest. If you want to cancel this after, say, two months you would have lost money.

To do a slow stooz, simply carry your 0% purchases card with you and use it whenever you would otherwise have used cash or debit card.
Then, either every time you use the card or at the end of the month, transfer the amount you have spent from your current account into savings, making the minimum payment on your card.

The concern is that by carrying a credit card you may be tempted to make purchases that you wouldn't have done otherwise and spending much more than you get back in interest on stuff you don't really need.