Applying for a credit card to make money off savings.. question

webbhost

Hi all,

Now that I've cleared all of my outstanding depts, im considering trying this idea of having a credit card with 0% and chucking whatever I spend into a savings account instead, so before I go and apply I was just wondering...

1) What sorta amount should I ask for on a card? I don't want to make it sounds over the top and be declined? Should I ask for 2000, 3000, or could I go as high as 5-6 thousand without them asking any major questions?

2) If they ask me what the purpose is of me wanting a credit card with such a high limit, what can I say? Surely if I tell them the truth they will realise they are not going to make any money out of me and probably decline me the opportunity? - I don't know whether I should say to make some big internet purchases or buy clothes etc??

3) If I got a card, and filled it up, how many times if any would the bank be willing to increase my credit limit?

4) what sort of profits have you guys managed to make out of this? I am good with my money so I do not think I will have any problems at all making my minimum payments etc.

5) Assuming once the bank invoices you with your minimum payment, you have 30 days or so to make the payment before its classed as "late" and therefore not getting 0% any more?

Thanks for the info people

CLAPTON

well

if you get 3% tax free then that earns you £30 per year for 1000
if you get 3% but it's taxable the each 1000 earns you £24 per year

if you get a BT type card then you will be charged about 4% for the BT fee so it would cost you £40 per 1,000

basically stoozing is dead; combination of low interest rates and BT fees

Fruit_and_Nut_Case

webbhost wrote: »

1) What sorta amount should I ask for on a card? I don't want to make it sounds over the top and be declined? Should I ask for 2000, 3000, or could I go as high as 5-6 thousand without them asking any major questions?

Which card have you found which lets you specify the credit limit?

System

webbhost wrote: »

Hi all,

Now that I've cleared all of my outstanding depts, im considering trying this idea of having a credit card with 0% and chucking whatever I spend into a savings account instead, so before I go and apply I was just wondering...

1) What sorta amount should I ask for on a card? I don't want to make it sounds over the top and be declined? Should I ask for 2000, 3000, or could I go as high as 5-6 thousand without them asking any major questions?

Usually you don't tell them what limit you want, they give you a limit.

2) If they ask me what the purpose is of me wanting a credit card with such a high limit, what can I say? Surely if I tell them the truth they will realise they are not going to make any money out of me and probably decline me the opportunity? - I don't know whether I should say to make some big internet purchases or buy clothes etc??

They shouldn't ask, but if they do make something up (car, cruise etc..)

3) If I got a card, and filled it up, how many times if any would the bank be willing to increase my credit limit?

Barclaycard increased mine once I passed 30% of the limit

4) what sort of profits have you guys managed to make out of this? I am good with my money so I do not think I will have any problems at all making my minimum payments etc.

Not sure yet, I've been putting my money in a stocks & shares ISA and get the statement every 6 months, but first direct offer an 8% (before tax) savings account (max 300/mo) and HSBC offer 6% (before tax, max 250/mo) then there's 3.5% ISAs so you could make quite a bit depending on how much you have to save lol. remember, you need to leave this money in (on the first direct/hsbc) for a year or you lose interest so you need a 0% card for longer than 12 months, or you need to open the savings accounts a month before

5) Assuming once the bank invoices you with your minimum payment, you have 30 days or so to make the payment before its classed as "late" and therefore not getting 0% any more?

It will say the minimum payment due date on the statement, but you should set up a direct debit to make the minimum payment

Thanks for the info people

Have fun..

chattychappy

1) CCs just give you a limit. They don't ask you what you want.

2) They don't ask you what the purpose of your application is.

3) Typically they consider increasing the limit every 6 months to a year.

4) Not possible to make profits if you are thinking of normal savings accounts. Typically you pay an upfront fee of 4% for a 12 month period. During that time you will have to pay some of it back, making the true APR equivalent a little higher. You won't get that out of savings, especially if you are a tax payer. Different story if you put the money on a horse and win.

5) Banks don't "invoice" you for the minimum payment. It's not a fee or a charge. They send you a statement. You won't get "30 days or so" to make the payment. In my experience, 30 days is the maximum and quite rare. 15 to 25 days is more normal and it's best to allow a few days for the money to arrive. Yes, one day late and you lose the deal and incur additional charges. Some providers might compromise for the first offence.

My advice: forget it. It used to work, but doesn't any more as CLAPTON has said.

Best thing to do is shift your spending onto a 0% purchases card - perhaps one that gives cashback or a Tescos card that gives clubcard points. You can make a small "return" without having to pay a fee.

Have you had a CC before? You refer to having just cleared your debts. Unless you have a good track record of managing credit in general and CCs in particular, you might struggle to get one of the better cards.

YorkshireBoy

chattychappy wrote: »

Best thing to do is shift your spending onto a 0% purchases card...

I read the OP as intending to do just that, ie...

webbhost wrote:

im considering trying this idea of having a credit card with 0% and chucking whatever I spend into a savings account instead

I think the discussion has been sidetracked somewhat, with the introduction of 'fast stoozing' which is, of course, very hard to make a (worthwhile) profit from these days.

System

chattychappy wrote: »

...

Best thing to do is shift your spending onto a 0% purchases card - perhaps one that gives cashback or a Tescos card that gives clubcard points. You can make a small "return" without having to pay a fee.

...

I think that's what the OP meant?

opinions4u

All the questions have been answered well.

You won't get rich doing this but you might pocket a couple of quid a month. Make sure you make payments in good time. One slip up can be expensive and wipe out profit.

And pay £1 more than the minimum payment during the interest free period. This will stop your credit file identifying you as a minimum payer.

One last thing, make sure the debt is cleared before interest kicks in. Know when the 0% ends. Don't assume.

chattychappy

YorkshireBoy wrote: »

I read the OP as intending to do just that, ie...I think the discussion has been sidetracked somewhat, with the introduction of 'fast stoozing' which is, of course, very hard to make a (worthwhile) profit from these days.

LooieENG wrote: »

I think that's what the OP meant?

Weird, I completely misread it!

Gromitt

Fruit_and_Nut_Case wrote: »

Which card have you found which lets you specify the credit limit?

First Direct don't give you a limit, they ask YOU what limit you want and then tell you whether or not you can have it.

webbhost

Hi, thanks for all the feedback everyone.

Slight confusion, Im thinking that I must have missed a vital detail somewhere??

What is this 4% upfront fee that has been mentioned?

And with regards to my previous debts, I had about £1500 on credit card, this was paid off by my brother and I paid him back over the months so my credit card has been gone for quite a while (Good solution above for anyone wanting to save a little)... I paid him back money with interest... He made more money than he would have in savings, and I saved money compared to my normal APR.. I don't believe it would get in the way of another credit card application through as the creditcard itself was paid off a good while ago, and I never missed a minimum payment to my knowledge