£48k stooze: managing the minimum payments

westernpromise

I have acquired £48k of credit cards' money and stashed it. The first post-BT statements are now starting to come in.

The monthly repayment bill looks somewhere between £1,000 and £1,500, which I can't afford to fund from my normal income. So I'm minded to transfer the repayments back to my current account each time.

One catch is that First Direct (£10,500) don't allow you to BT to the same card twice. This means that I can't BT the minimum payment back to Egg and thence into my bank account. I routed the original 10.5 into my current account that way in the first place, so I clearly can't do that again.

3 questions for the experts.

- I've got an HSBC card too. Do they apply the same rule? Can't see it in their GT&Cs, but they are the same outfit - did I just miss it?
- Am I going to have to route the FD minimum payments via each of my other cards and thence to Egg to get the money back on deposit?
- How long after being given a C1 18-month card is it worth applying to them for a credit limit increase? Ideally, when one of the shorter 0% deals expires, I'd like to swap some debt over to the C1 card rather than apply for another card. They gave me a derisory limit, possibly because I'd just acquired 4 new cards at that point.

smartsaver

I' not sure what you are trying to achieve here but it sounds complicated! Why not pay the minimum payment out of your stooze pot? You can move money around from card to card but you have to be careful as most only allow BT's at 0% for a short period (read the T&C's).

We have just moved £1500 from Sainsburysto Halifax one to eek another 6 weeks at 0% on it. When moving money araound read your own T&C's as can differ from person to person.

deemy2004

no comprende either ....

You pay from your current account by BACS , Debit Card or direct debit.... So transfer from your stoozed pot to your current to service the monhtly minimums.

Shinds

What I've done is setup a 2nd Current account - From which I make all my min' monthly payments....

Every month I transfer about £1000 from my Stooze pot into this account, to make the payments...

Also.. all the cards are setup with Direct Debit, so I don't miss a payment..

westernpromise

smartsaver wrote:

I' not sure what you are trying to achieve here but it sounds complicated! Why not pay the minimum payment out of your stooze pot?

I'm trying to avoid depleting the stooze pot by doing this. Over 6 months I'd have to give about £7 or £8k of it back, which by rights should be eaning me interest. So I'm trying to figure out what's the easiest way of doing this, short of actually giving any money back.

empfun

westernpromise, hows about working more hours or selling your unwanted items? Many possibilities about.

smartsaver

westernpromise wrote:

I'm trying to avoid depleting the stooze pot by doing this. Over 6 months I'd have to give about £7 or £8k of it back, which by rights should be eaning me interest. So I'm trying to figure out what's the easiest way of doing this, short of actually giving any money back.

I'm not sure stoozers have 'rights' after all it is us who are working the system to our advantage. You may find a way to transfer the minimum payments between cards BUT I doubt it will be easy and it is risky (unless you have read and memerised all your T&C's verbatum) and will involve alot of work for a small reward.

With an EGG card you can SBT your payments back into your current account. If you do this reguarily it may harm your credit rating as your 'debt' will not appear to be decreasing. You mention C1 have given you a low limit , the next time you apply for a card you may find you are refused. Slowly and gently is the art of stoozing.

peterbaker

Forgive me, but you sound like you are maxed out on this and reluctant to be less than maxed out.

Also, westernpromise you said:

The monthly repayment bill looks somewhere between £1,000 and £1,500

That's a worrying approximation. You must always know to within £50 not £500 I suggest what your cashflow forecast is.

A long time ago, I concluded that to keep a permanent sum "stoozed" (I kept mine in premium bonds for 5 years just to see how the credit card market developed) I needed a damn good cashflow spreadsheet plus total credit lines of about three times the amount stoozed. My stooze spreadsheet automatically calculated cashflow and a rolling monthly CC interest expenditure six times each month. And that was when we had the much better potential interest free periods that abounded on cards of old - because many included up to 56 days interest free for any full payment including balance transfers irrespective of promotional offers. Those days are mostly gone. If your total credit line is £48K then be prepared to reduce your stooze to around £16000 well before the 0% deals run out. Don't be tempted to mess around too much with next level of promotional deals (the 6.9s and 7.9s and 8.9s) that may follow just to try to keep £48K stoozed. They will not be worth it and you are extremely unlikely to even break even until you get offered big money on 0% terms again.

Be very careful or you will soon end up making mistakes and spending all your time calling credit card companies pleading for leniency when you suddenly incur £150 interest by being a day late with a FULL payment just when the interest rate switches from 0% to something nasty, etc. etc. Good that you have DDs setup, but unless you have cleverly changed the last DD on 0% to be a full payment and funded it you will very quickly be in a mess.

As others have advised, I think EGG is still best for SBTs to keep your current account DD min payments funded (if you are not already maxed out on EGG that is!). If you have Egg Green but no Egg Blue then maybe it won't cost you too much adverse credit score to apply for a Blue to use exclusively as the SBT card (Blue is never good for balance transfer balances of any kind except for a few days it takes to execute a near-simultaneous "in and out").

You not only need large credit limits to stooze large amounts but you also need a lot of cards to give you flexibility. Half a dozen cards isn't going to give that flexibility. Having only one possible critical path through your cashflow forecast is bound to go wrong eventually. Thats when the buzzards get their claws in with big interest.

When we old-stagers started our big stooze ideas, there were few companies that reported the level of outstanding debt to the reference agencies. Now lots of them do. Thesedays you must be prepared for your borrowed £48K to be totally visible to any bank that chooses to click a mouse on your name. It may even look worse on particular days because some credit reference outstanding balance records are weeks out of date.

My experience of First Direct VISA for stoozing leads me to say "Don't even think about it". They have always been very hard-nosed about balance transfers and used to have a weird system of transacting them through your FD current account that is mind-blowing. I guess it would be rude not to use the initial 0% they offer but after that I suggest put the FD card away and forget it. Better then to trade your FD card limit for an overdraft limit on your FD current account at that point. Thats what I did. Very useful extra flexibility for stoozing is the emergency value of more than one big overdraft facility!

Hope that helps!

Finishrich

If you can't fund the minimum payments out of your normal income then the only way is to use the stooze fund to pay them, just as Deemy said above.

westernpromise

peterbaker wrote:

Forgive me, but you sound like you are maxed out on this and reluctant to be less than maxed out.

Yep, basically I have 5 cards with £48k on them, all of which is on deposit at rates between 5.25 and 5.5%. I have a reminder set up in MS Money of when the various 0% deals expire.

I also have 3 other cashback cards, which I use for normal spending and pay off in full by DD. The limits on those add up to £13k. I've reduced that by about £5k recently, because I didn't need it all. Occasionally I have to put business class flights to the Far East on my credit cards, so at £5k a pop I do need a bit of headroom. The total, £61k, is about 60% of my gross income.

The 5 stooze cards are all set up for the min payment to be made by DD. What I am trying to do here is optimise those min payments. I've previously stoozed much less ambitious amounts, treating the min payments as a savings plan - i.e. I paid out of income, so I owed the card less, but kept the entire original BT on deposit.

I can't afford to do that with £48k. So my inquiry really was whether anyone has sussed out a better way of servicing the card debt than by depleting the stooze pot itself. You know - inventive configurations of one's bank accounts, devious routing or timing of cash movements, etc....

It sounds like the most reliable way is simply to use the stooze pot. If that's the consensus among the big stooze players here, fair enough.

Incidentally, I'm only 'vague' about the amount of those min payments because I don't have the paperwork in front of me. I've entered the correct amounts into MS Money for the next 9 months.

A long time ago, I concluded that to keep a permanent sum "stoozed" (I kept mine in premium bonds for 5 years just to see how the credit card market developed) I needed a damn good cashflow spreadsheet plus total credit lines of about three times the amount stoozed.

This is interesting - why so high? Do you mean that

stooze limit plus
normal expenditure plus
overlapping cards as you roll the position over
=
3 times stooze limit?

If your total credit line is £48K then be prepared to reduce your stooze to around £16000 well before the 0% deals run out.

I'm really doing this to do a live test of the relative merits of a big stooze pot versus a succession of smaller deals.

In theory, one could run a pot of eg £15k for years on end, using up 0% cards in succession. This means, though, that the returns are spread out over several years too, and it assumes that the deals will be available in perpetuity. What I am trying to do here is collect the money sooner rather than later, returning all the £48k in 6 to 18 months as necessary if necessary. If the 0% deals are indeed still around in 2 or 3 years' time, I can always reapply as a new customer, with a credit history that will look pretty similar to that of a 'gradualist' player (i.e. a lot of cancelled cards in my wake).

Good that you have DDs setup, but unless you have cleverly changed the last DD on 0% to be a full payment and funded it you will very quickly be in a mess.

If I can't transfer the balance, I just move the money online by switch. It appears to be more or less instant.

I guess it would be rude not to use the initial 0% they offer but after that I suggest put the FD card away and forget it.

Or cancel it, as they charge you £20 a year if you don't use it for anything.

Martinslovechild

I tend to pay all my minimum payments directly from my salary. This works for me at present as my car loan was paid off over a year ago meaning that the £600 per month that I now pay in minimum payments is little more than what I previously paid per month on the car loan.

Additionally, the £600 payments were lower than anticipated; as MBNA require only £5 per month as a minimum payment, my bill would otherwise have been nearer to £900 per month - certainly a more difficult amount to find out of my monthly salary.