Can you stooze with cash-back cards?

Dualcyclone

I just wanted to know whether it was possible (or legal, even) to 'stooze' with cash-back cards?

The idea is that I setup a DD to pay off the balance in full each month, but I put the money directly into my One Account.

That way, I'll be saving on interest, and earning a bit of money on cash-back; so its kind of like a double whammy.

Cheers!

Richard019

Nothing wrong with it at all. A cash back card is just the same as a normal credit card. Until the payment due date the money is yours to do with as you want (just make sure there's enough available to repay it in full).

On a similar theme, I've just moved my Sky billing date to the day after my statement is produced for the same reasons you've given. I'd not really considered it as stoozing due to the short term nature of it but I suppose technically it is.

ragingbass

I'd agree, I dont know if it's stoozing as such, just using and paying off your credit card properly. It's a little more like slow stoozing I guess?

Depending on how much your balance is each month, I doubt you'd make any serious interest from this though because the funds aren't in there for long enough?

That said, with interest rates being so low at the minute the cashback cards look a lot better now than they did a few months ago.

Richard019

ragingbass wrote: »

I'd agree, I dont know if it's stoozing as such, just using and paying off your credit card properly. It's a little more like slow stoozing I guess?

Depending on how much your balance is each month, I doubt you'd make any serious interest from this though because the funds aren't in there for long enough?

That said, with interest rates being so low at the minute the cashback cards look a lot better now than they did a few months ago.

If I've read it properly he'll permanently have 2-6 weeks worth of 'shopping' on it with the money all offset against his mortgage. It all depends on his mortgage rate rather than any savings rate which is a bonus as it's tax free that way. Can you get fixed rate offset mortgages?

ragingbass

Sorry, my mistake, was thinking about my own situation with savings. I think the same principle applies though, whether it's a savings account or whether you're offsetting.

I think you can get fixed rate offset mortgages, but I haven't looked into it too much. I think they've generally got a hefty premium on them so I've always steered clear. Tax free or not though, I'm not sure this technique makes as much as stoozing or slow stoozing?

Let me try some figures, but it's early in the morning and I'm not at my sharpest, so you might want to check these

Scenario: Monthly CC spend £2000 over 12 months, so always £2000 offset against mortgage (ignore timing of CC payments and you may sometimes have more, sometimes less). Let's say offset mortgage interest is 5%. Let's also say cashback on CC is 1%.

Each month you'd earn £20 on the new cashback purchases (£2000 * 1%)
Each month you'd "save" £8.33 on your mortgage ((5% / 12 months)*2000)
So each month you'd be making £28.33 and at the end of 12 months when the cashback pays out, you'd be £340 better off.

If I plug in the same figures into http://www.stoozing.com/slowcalc.htm and set the minimum monthly payment to 2%, that says I get a profit of £500.33 after the 12 months. The thing to note there is, you'd need a hefty credit card limit to stooze this much over 12 months.

Like I said, check those figures and I've also made a few assumptions there!