Stoozing

luckylouise08

Hello all, I have just been approved for a 0% on purchases (for 15 months) credit card. I have decided to go for this type of credit card so I can save all the money that I would have been using to pay off the purchases and stick it into a savings account instead to generate interest. I am trying to save for a deposit to get on the property ladder and would use the interest I build up in the savings account to be the starting point of my deposit then pay the credit card bill before the 15 months at 0% rate ends.

My question is...whilst I am not paying off the purchases during the introductory 15 months at 0% for purchases, will this effect my credit rating in any way? E.g. will my credit score get lower, as it may look like I am not going to potential pay the end debt off when the 0% rate runs out? Would it help my credit score get higher if I pay the credit card off some time in advance before the 0% ends? I will be paying the full amount off the credit card before the 15 months are up definitely. Any advice or knowledge would be very helpful as credit scoring can get very confusing!

Thanks, Louise

jonesMUFCforever

As long as you pay minimum payment every month you should not have any problems.

CLAPTON

15 months

does this mean that all your spends make during the next 15 months are interest free

or does it mean that your spends made during the next xx months will be interest free for 15 months?

exel1966

luckylouise08 wrote: »

My question is...whilst I am not paying off the purchases during the introductory 15 months at 0% for purchases, will this effect my credit rating in any way? E.g. will my credit score get lower, as it may look like I am not going to potential pay the end debt off when the 0% rate runs out? Would it help my credit score get higher if I pay the credit card off some time in advance before the 0% ends? I will be paying the full amount off the credit card before the 15 months are up definitely. Any advice or knowledge would be very helpful as credit scoring can get very confusing!

Thanks, Louise

It will affect your rating in that your card debt to limit ratio will be high for the duration and your total available credit may be high, but there are too many factors outside of this to say whether it will have any significant impact. Do you have credit elsewhere* ?
Generally stoozing does have an impact, but with one card it's very minimal*. Now if you had maybe 5+ on the go consecutively (as I used to in the heyday) that would be different.
The idea of stoozing as you probably know is to pay back the minimum required and then the full balance at the very end of the offer period or BT again to another card, therefore set up a DD to pay the minimum only and leave the rest until as late as possible. Note, CRA's are now recording those who pay minimums, this may or may not temporarily impact your rating (we don't yet know) so it might be adviseable to pay an extra £1 manually each month.

I hope you realise you are not going to make a significant profit this way unless you have a significantly high limit and monthly spend or max out your limit immediately.

Eg. Limit £2k, monthly spend £400 = profit of between £55 and £95 depending on your tax status and account APR.

EDIT : having read your other posts I'm not sure whether you're actually in a position for this. You have a fair rating, £5K debt in a loan and 1 card with a low limit of £1300. That doesn't seem to bode well for getting further credit or a limit high enough to make much at all.

luckylouise08

exel1966 wrote: »

It will affect your rating in that your card debt to limit ratio will be high for the duration and your total available credit may be high, but there are too many factors outside of this to say whether it will have any significant impact. Do you have credit elsewhere* ?
Generally stoozing does have an impact, but with one card it's very minimal*. Now if you had maybe 5+ on the go consecutively (as I used to in the heyday) that would be different.
The idea of stoozing as you probably know is to pay back the minimum required and then the full balance at the very end of the offer period or BT again to another card, therefore set up a DD to pay the minimum only and leave the rest until as late as possible. Note, CRA's are now recording those who pay minimums, this may or may not temporarily impact your rating (we don't yet know) so it might be adviseable to pay an extra £1 manually each month.

I hope you realise you are not going to make a significant profit this way unless you have a significantly high limit and monthly spend or max out your limit immediately.

Eg. Limit £2k, monthly spend £400 = profit of between £55 and £95 depending on your tax status and account APR.

EDIT : having read your other posts I'm not sure whether you're actually in a position for this. You have a fair rating, £5K debt in a loan and 1 card with a low limit of £1300. That doesn't seem to bode well for getting further credit or a limit high enough to make much at all.

Thank you for your response. My financial situation has changed since previous posts. My car finance is totally paid off. I have 20 credit accounts on file, all paid on time and in full each time I get a bill through or completely settled up. I have 2 credit cards, 1 which has a £200 limit and 1 which has £2500 limit. I think i need to go into my bank and have a discussion with them regarding what my best financial options are. I do get your points that i will not make much from saving this way but the amount I spend on purchases at the moment i use to pay off my bills with straight away so it does not see any interest with it not being in a savings account. I am hoping to get some interest built up by also sticking away money left over from my wages into the savings too, to boost the interest and not just the credit card repayment money. I am going to apply for a part time job alongside my full time one, so fingers crossed more income will mean more savings. Thank you for your help. I will put just above the minimum payment in each month during the 0% period.

luckylouise08

I forgot to say the 0% card is the 3rd credit card. I have not yet found out what my credit limit on that card will be, so i will have to wait and see. I will be looking at making any adjustments to my credit limits if i need to e.g. if making my credit limit smaller helps my credit rating, i will do what i need to do. Who knew credit could be so confusing eh!

webbhost

not read any of the replies, but to answer your question, I am doing the same thing (probably with the same card by sounds of it).. I pay "more" than the minimum payment each month, by about £5-10 or so.

The reason for this is, that if the credit card company can see you pay more than the minimum, I think they look at your account as more trust-worthy and this should have a positive impact on your credit rating?

Hopefully this taken in mind, when I apply for the credit card limit to be made higher after a few months hopefully they'll accept it given that they can see I pay back more than the minimum.

sharpy2010

luckylouise08 wrote: »

I think i need to go into my bank and have a discussion with them regarding what my best financial options are.

They will (naturally) only tell you about their own products, so this will not be a particularly enlightening visit, and definitely won't tell you anything that you can't find out just simply looking at their website anyway.