Stoozing-is it really right?

nearlyrich

Originally Posted by meheraltaf
The stoozers seem to feel bad.....:D , all them pouncing on my innocent post, so surely it is not so straightfoward a way of investing or saving! It surely is clever-but reservations on credibility. And the more people attack me here, the more convinced I would be....:D

Well I am a stoozer (got £34k on deposit currently) and I don't feel bad, the extra interest has helped to offset the costs of my childrens university fees.

I hope you don't feel my post was attacking you in any way, I was just pointing out that I don't feel it's morally wrong to do to the banks what they have been doing to consumers for years, me included in my less savvy years.

You are a debtor when you stooz-am I right?

Yes, you are a debtor but as the money is on deposit in my bank account offsetting the debt it's not the same as owing money to a CC company or bank when you don't have the money to pay it off.

EdInvestor

Hello again meher


I suspect you've not really understood the basic idea of stoozing.

This explanation is from www.stoozing.com :

Stoozing is a way of making money by exploiting credit cards which have an introductory period during which no interest is charged.
There is fierce competition in the credit card industry, so many lenders have introductory periods of between 5 and 12 months during which they charge 0% interest on the card balance. This allows the Stoozer to borrow money for 'free' and to move it into a high interest savings account.

At the end of the 0% introductory period, the money is withdrawn from the savings account and used to pay off the full credit card balance. The interest gained from the savings account is your 'profit'. As with any other savings account interest, taxpayers need to pay tax on the interest earned.

An alternative way of making money from Stoozing is to put the borrowed money into an offset mortgage instead of a savings account. This reduces your mortgage payments, 'earning' you money in that way; usually tax free.

As you can see an offset mortgage is itself a form of stoozing, where you place your cash on deposit in an accountfrom which you also take a loan.The interest paid on the deposit reduces the net interest paid on the mortgage and an additional stoozed amount can increase the saving .

The idea is that at all times the debt on the credit card is offset by a credit, as the amount borrowed is lodged in a deposit account which is earning a higher rate of interest than is being paid on the debt.

Another name for it would be "arbitrage", which has been around in the financial world since it started. No moral principle involved as far as I can see.

GlennTheBaker

CTT wrote:

You are right. I have to try and be tolerant of stupid people in 2006 and must accept there stupid questions.

Must be difficult being on a higher intellectual level to everyone else. Oh well, maybe one day we can all be as clever as you.

meheraltaf

no nearlyrich, I know you from the discussion board..you are too sweet to attack anyone...;)

My being stupid or naive is not a reason for people to get so worked upit's my problem, not anyone elses...:D ... Martin has given us this opportunity to discuss and understand. I dont deal with any of the finances-my husband seems to do a good job of it. He tried to introduce me to MSE with the hope that I will learn this concept of money saving, bless him.

And here I am learning-frankly, I dont use credit cards either so obviously stoozing is a shock to my lifestyle-very simple.

Ed,thanks, I will go through some links, promise, my homework before continuing to be stupid. And good you brought up off set mortgage, well, that is different- is it not, it is still your money, the money you have been lent from the mortgage at the end of the day or rather your loan which you are repaying on a monthly basis. It is simply there at your disposal just in case you need it.

And also on an offset mortgage, you pay the interest-it is not freebie, so no q of morality issues here. And in any mortgage dealings, the lender has a wonderful security-the property and a bonus-the interest they receive-mortgage is one fascinating concept for the economist I guess because it makes those nations wealthy-what about stoozing-freebie -very different.

promise I wont be back till I read every link given....thanks everyone.

Edinburghlass_2

Well if its good enough for :money: and our two respected Board Guides on cc, its good enough for me and big thanks to all the cc posters for their help over the year.

Special thanks must go to Martin for tipping us off early on the Capital One 18 months cc at 0% interest rates

meheraltaf

I havent yet read grumblers link on what Martin thinks, my problem with articles are that I dont understand the jargon-:o-which is why I read posts to understand and when people write their views, I understand that better. Does Martin recommend stoozing? Ok, will surely read what Martin says and will be back. This is my first venture into this finance part board-looks like it will be the last-I better stick to educating myself rather than questioning..:D

innovate

meheraltaf, tens of thousands of UK people have been making use of 0% offers for years, the %age of stoozers amongst those who do is minute.

If you question the 'properness' of stoozing, should you not also ask whether anything that involves a 0% credit offer "is really right"? And whether it is "really right" that lenders use our money to offer others interest-free credit, instead of paying us interest for our money?

(I am a stoozer )

bethom

CTT wrote:

You are right. I have to try and be tolerant of stupid people in 2006 and must accept there stupid questions.

How dare you be so nasty. If you want to pick on someone, show some balls and pm me.

You disgust me.

Tim_L

This is a bit of a sterile discussion, and I have a feeling there's some trolling going on here.

Let me repeat: there is no issue of morality with stoozing, full stop, except for those taking the Biblical or Koranic exhortations (for example) on usury as literally applicable to commercial transactions, and even for those people this is more properly a matter of religious law rather than absolute morality (in the same way as it is not immoral to eat proscribed meat, it is forbidden).

Religious thinking does develop over time, but in terms of absolute morality I think I would personally suggest that (to take a couple of examples from Christianity and Islam) forbidding the use of condoms by African Catholics and fanning the flames of AIDS, or amputating hands for theft or stoning to death women who are believed to be adulterous would rank as slightly less moral in absolute terms than borrowing a few thousand pounds for 9 months from a credit card company.

Anyway, we can argue until doomsday on the merits of religious dogma relating to a personal choice to become a borrower or a lender, but anyone accepting a credit card for any reason has already decided to be a borrower, just as anyone opening a current account has decided to be a lender.

Stoozing is a commercial transaction with a lender or lenders who accept to lend money at 0% interest. They agree to do this because it is good business, and builds their market share. They are aware that some debt will come over to them at high rates which will pay the cost of the money. So the person offering 0% believes that they can make more from the expanded customer base than the cost to them of the money.

The money from stoozing is then paid into high interest deposit accounts, which once again is a commercial transaction entered into by both sides willingly. The person paying the interest believes he or she can make more from the money than the interest they are paying.

Using stoozed cash to offset debt, or using it to earn money cannot be viewed as immoral unless you assert that the lender or the operator of the savings account is operating in an immoral way. Which can only really be the case if you have a moral objection to commerce full stop, in which case fine, but most of us don't.

To then drag in the argument the idea that stoozing may bring hardship to other family members in the event of the death of the stoozer is frankly completely irrelevant.

Anyone can get into financial trouble, but as a rule people who stooze are less likely to, because it is something that tends to attract reasonably well organised and financially savvy people. The fact of having a 55K debt does not mean you are in financial trouble: if you have 55K of savings paying more interest than the cost of the debt, then you have an income stream, and a means of paying the debt if you die. A tenner a month of life insurance on top will more than deal with this level of debt anyway.

But if you are foolish with money, if you spend beyond your means and don't make provision for your dependants, then you're going to get into some degree of trouble whatever you do. This is nothing to do with stoozing, it's just that you're a fool.

Please spare us your judgements on morality unless you are prepared to enumerate your moral objections and their sources in a reasoned argument, as I have done here and in my previous post. It is not really acceptable to ask others to prove a negative until you have made your own arguments.

CTT_2

Moglex wrote:

Well, if you want to appear so holier than though and super intelligent, you might like to learn the difference between 'there' and 'their', lest some think you a stupid person

Put those claws away girl!