Stoozing: Free Cash from Credit Cards - Is it appropriate to promote in 2011 ?

2sides2everystory

I am a founder stoozer - I even invented my own system for it. I had £70,000 on credit cards continually stoozed for 6 years from February 1999 - Maybe I should have bought a house with it instead of playing safe with Premium Bonds and the like ... but that was then, and now is a totally different climate - one we envisaged six seven or eight years ago actually because despite the "surprise" of sub-prime credit in backwater parts of the USA which only grabbed our attention in 2008, USA credit card issuers had started charging fees and becoming much tougher with credit years before we did in the UK. Some of the same issuers closed down their US markets as a spent course, and only then tried their hand in the UK in the early noughties.

I am struck from time to time about how the title of this sub-forum has become less and less appropriate in the last few years. Despite loozing a good third of my credit lines through lack of use, I still have credit card limits higher than ten "normal" MSE'ers put together but do I stooze on credit cards? Don't be daft. I stooze a little on my tracker mortgage and sometimes make 4% on borrowed mortgage money but unlike borrowing on promotional deals on cards in 2011, there's no risk of penalties or making expensive mistakes when promotional periods end.

Judging from many of the questions asked by people who visit this sub-forum and who are still keen to get started stoozing or who already have started and have got stuck and are asking "Now what" type questions, I do think it is time this part of the MSE forum was pulled. Those clever enough to keep safe whilst stoozing do not need the section. Those not clever enough shouldn't even have been given the idea in 2011.

What do others think?

dizzie

Agree that this is only for people who understand it and are disciplined. I also stoozed on credit cards in the past but due to low interest rates, there came a point for me where the rewards became small enough to make me think that the work and monitoring involved did not justify it. However like you, I have been able to take advantage of low interest rates on mortages. We have an offset tracker at 0.5% above BoE BR and at one point had our offset savings maxed out at the 85% allowable offset limits. When rates dropped, I moved the offset savings to external savings accounts (which even after tax on the interest have earned me a fair bit). Now all I need to do is keep an eye on what BoE do each month and be prepared to pile savings back into the offset if rates shoot up.

co123456

Obviously not as profitable as in days gone by, but a good skill to have in case a drop dead must have deal presents itself. I'm done Stoozing at the moment however I do find some of the skills learnt transferable.

Loophole spotting.
understanding T&Cs.
Diary planning.
Not taking "no" for an answer.

At the moment, cashback credit cards are more profitable for me. When this changes, and when I have a mortgage, I'll be back on the horse.

Martinslovechild

I agree with all of these comments. The odd stoozing deal does still come along now and again (I was recently offered a knockout deal with Santander for existing customers only, 0% for 16 months with no fee - frankly, it was rude not to accept!!).

Low interest rates on savings accounts and increasing fees on Balance Transfer cards essentially combined to ensure that stoozing is simply not worth the effort most of the time, but for people whose mortgages or loans are costing them more than 3% per annum, I still believe that stoozing has its place - particularly for those people with offset mortgages who can earn an 'equivalent rate' of anywhere from 5% upwards if they deposit their stooz pot into their mortgage offset fund.

spikyone

Martinslovechild wrote: »

I agree with all of these comments. The odd stoozing deal does still come along now and again (I was recently offered a knockout deal with Santander for existing customers only, 0% for 16 months with no fee - frankly, it was rude not to accept!!).

I got sent this too, got very excited about keeping my stooze for 16 months, then got given a credit limit of £1100
So it looks as though I'll be dipping into my savings to clear the rest of it then!

alexanderalexander

2sides2everystory wrote: »

I am a founder stoozer - I even invented my own system for it. I had £70,000 on credit cards continually stoozed for 6 years from February 1999 - Maybe I should have bought a house with it instead of playing safe with Premium Bonds and the like ... but that was then, and now is a totally different climate - one we envisaged six seven or eight years ago actually because despite the "surprise" of sub-prime credit in backwater parts of the USA which only grabbed our attention in 2008, USA credit card issuers had started charging fees and becoming much tougher with credit years before we did in the UK. Some of the same issuers closed down their US markets as a spent course, and only then tried their hand in the UK in the early noughties.

I am struck from time to time about how the title of this sub-forum has become less and less appropriate in the last few years. Despite loozing a good third of my credit lines through lack of use, I still have credit card limits higher than ten "normal" MSE'ers put together but do I stooze on credit cards? Don't be daft. I stooze a little on my tracker mortgage and sometimes make 4% on borrowed mortgage money but unlike borrowing on promotional deals on cards in 2011, there's no risk of penalties or making expensive mistakes when promotional periods end.

Judging from many of the questions asked by people who visit this sub-forum and who are still keen to get started stoozing or who already have started and have got stuck and are asking "Now what" type questions, I do think it is time this part of the MSE forum was pulled. Those clever enough to keep safe whilst stoozing do not need the section. Those not clever enough shouldn't even have been given the idea in 2011.

What do others think?

I have read through your post a couple of times and it is still not entirely clear to me what point you're making.

I am well aware that the general economic situation is very different in belt-tightening 2011 to what it was in the heady days of 2006. In relation to stoozing, however, there are only two things you need: 0% interest credit cards, and savings accounts offering interest. These existed in 2006, and they exist in 2011. Admittedly there is less money to be made now -- credit limits and interest rates are both lower -- but that's not a reason not to stooze at all.

You refer to penalties and expensive mistakes when promotional periods end -- you're right that a stoozer should be careful to avoid these, but these issues existed in 2006 too. Possibly they're a little tighter on it now, but credit card company's weren't exactly charities back then. I don't see what's really changed on that front.

Also, the anti-stoozing suggestions you proffer are aimed at rookie stoozers who might muck it up. It seems clear that you are a very experienced stoozer -- so why have you personally stopped stoozing? It would seem unlikely that you'd fall into any of the common pitfalls of missing minimum payments or failing to clear the debt.

Martinslovechild

alexanderalexander wrote: »

I have read through your post a couple of times and it is still not entirely clear to me what point you're making.

I am well aware that the general economic situation is very different in belt-tightening 2011 to what it was in the heady days of 2006. In relation to stoozing, however, there are only two things you need: 0% interest credit cards, and savings accounts offering interest. These existed in 2006, and they exist in 2011. Admittedly there is less money to be made now -- credit limits and interest rates are both lower -- but that's not a reason not to stooze at all.

You refer to penalties and expensive mistakes when promotional periods end -- you're right that a stoozer should be careful to avoid these, but these issues existed in 2006 too. Possibly they're a little tighter on it now, but credit card company's weren't exactly charities back then. I don't see what's really changed on that front.

Also, the anti-stoozing suggestions you proffer are aimed at rookie stoozers who might muck it up. It seems clear that you are a very experienced stoozer -- so why have you personally stopped stoozing? It would seem unlikely that you'd fall into any of the common pitfalls of missing minimum payments or failing to clear the debt.

I think the point he is making relates to the differential between savings rates and BT fees.

Back in the good old days of 2006, 0% balance transfers had £0 fees (aside from one or two deals which charged a very small fee, e.g. Capital One's 18-month 0% deal which levied a £50 fee on an £18,000 balance transfer). At the same time, savings rates were anything up to 7% (for fixed-rate bonds) and therefore the differential between the two was around 7% (before tax).

However - roll the clock forwards to 2011 and Balance Transfers often levy a 3% fee while savings rates are also around 3%. After tax, you'd effectively be making a loss.

That's why I was saying that those people with offset mortgages can still make an 'effective gain', particularly higher-rate taxpayers; however, most other people will make a loss if they choose to invest their stooz pot in the savings market. Of course, you could chance your arm in the stock market to attempt to make more of a profit, but that would only be recommended for more serious players.

alexanderalexander

Martinslovechild wrote: »

I think the point he is making relates to the differential between savings rates and BT fees.

Back in the good old days of 2006, 0% balance transfers had £0 fees (aside from one or two deals which charged a very small fee, e.g. Capital One's 18-month 0% deal which levied a £50 fee on an £18,000 balance transfer). At the same time, savings rates were anything up to 7% (for fixed-rate bonds) and therefore the differential between the two was around 7% (before tax).

However - roll the clock forwards to 2011 and Balance Transfers often levy a 3% fee while savings rates are also around 3%. After tax, you'd effectively be making a loss.

That's why I was saying that those people with offset mortgages can still make an 'effective gain', particularly higher-rate taxpayers; however, most other people will make a loss if they choose to invest their stooz pot in the savings market. Of course, you could chance your arm in the stock market to attempt to make more of a profit, but that would only be recommended for more serious players.

Thanks for the post -- I see now that stoozing involving balance transfers would be fairly ineffective for some people these days, although simple stoozing will still work.

I was interested to see you mention people putting stooze cash on to the stock market. Although I'm sure some people must do it, it seems to be a bit of a taboo subject on this forum. Obviously it's far more risky than savings accounts, but then again the stock market is the only way to get real growth.... I can see it could work for someone who could (i) be reasonably confident that their availability of credit won't dry up suddenly and (ii) could absorb any losses without being put in serious financial difficulty. It'd still be a gamble though....

splatt30

I'm still stoozing.
But off an offset mortgage which we fixed before interest rates plummetted at 5.98%. It's not worth paying the fees to move the mortgage and to be honest I love the flexibility of it so much, I don't think I'd want to (ie we "loaned" ourself £10K we'd paid off the mortgage to buy our new car and are paying it back at £300 per month. Much cheaper overall than any of the other loans we'd have been able to get)
My virgin card is forever offering BTs and 0% purchase offers and with a limit of £17K can keep an reasonable stooze pot without recurrent applications. Fingers crossed for the Barclaycard 20 month BT come June when my other first direct BT ends and I'll be happy.
But agree, for most, it's tricky to make it work other than slow stoozes on purchases, and then it's not going to be big bucks!!

Wyndham

I'm still stoozing, but slow stoozing. I'm not making as much as I have in the past, but I still feel that even a pound in my pocket rather than someone else's is good

Still making a couple of hundred a year.....

The_Enforcer

I've not stoozed before, but became aware of it a couple of years ago. I didn't feel it was the right time back then because I was gearing up for a house purchase and all the financial uncertainty that entails. In the meantime I've been using cashback credit cards, and therefore if I took out a 'straightforward spend on a 0% card deal' now it would merely compete with and reduce the returns from those cards (until I clear the respective cashback payment thresholds). I would have liked to have taken out an Egg Money card, which offered a different type of stooze not involving purchases, but I see that those are currently unavailable again to new customers, due to Barclaycard takeover.

However, I am considering applying for the M&S 0% 15 months card on the basis of the sterling travellers cheques loophole, which if I have understood it right in simplistic terms involves:

1. Obtain M&S 0% card
2. Buy maximum amount of sterling travellers cheques possible (at 1% charge)
3. Pay travellers cheques into a bank account (although I've read that not all do I currently have 4 bank accounts so at least one of them should accept them)
4. Transfer cash into savings (or mortgage/offset mortgage thingy)
5. Make minimum monthly payments on card for 15 months at 0%
6. Pay off remaining debt on card before 0% period ends (or do balance transfer of debt to another card if, unlike at present, balance transfer fee %/amount is significantly less than savings % at that time)
7. Keep interest earned on savings

I thought this sounded worthwhile, having read this thread, am I wrong in that assumption?