Stoozing Newbie

MrOrchard

Apologies if I'm over simplifying here, but I'd like to take advantage of my "good name" in CRA terms to take advantage of a 0% on purchases credit card, for example the Tesco card.

http://www.tescobank.com/personal/finance/finance/creditcards/clubcc/index.html?cmpid=aggregator/moneysupermarket/creditcard/clubcard

I would probably get a pretty high credit limit, but am unsure how I would actually go about taking the money from the card to my savings account, watching the interest roll in then paying it off.

What are the tips and tricks here?

EDIT: I've actually seen that the M&S Card would seem to be the best option, given that I can buy sterling travellers cheques up to the limit for a 1% fee, then just pay these into my account. Does this seem right?

JimmyTheWig

I'll give an example...

Lets assume that you normally pay for your weekly shopping on debit card.
Once you get your 0% on purchases card, pay for your weekly shopping on that.
Transfer the amount you spent on card into a savings account.
When the credit card statement comes, pay the minimum amount (some people like to do a direct debit for this; some suggest paying £1 more than the minimum as the minimum gets marked on your credit file).
Your savings account will earn interest.
Your credit card won't charge you interest.
When the promotional period is coming to a close, take the money out of savings and pay the credit card balance.
You will be left with the interest that you have gained.

Remember...
* Always pay at least the minimum, on time, each month.
* Don't go over your credit limit.
* Don't buy things that you wouldn't have done otherwise, just because you've got your stoozing card on you.
* Consider the effect of having this credit card balance when making other credit applications (particularly mortgage).

psychic_teabag

I'm also new to stoozing, and got a natwest card when they had an 18-month purchase offer recently. (Plus you get points.) But with interest rates falling, I'm not so sure now : my partner's 3% cashback aqua card seems a better deal. So having built up a bit of a balance, we'll probably let that sit and use aqua from now on.

That sterling travellers cheques thing seems like an interesting ruse : buy them for 1%, getting 3% cashback ? Doesn't it cost the vendor around 5% for a credit-card payment ? Perhaps there's a surcharge to pay when using credit card ? Or would credit card just view them as a cash advance? Pity aqua offer a fairly low credit limit.
EDIT: sorry, I see there's a separate thread talking about this t.c. thing.


I think you can a higher introductory cashback period on some cards (5% for first 3 months ?). perhaps that would work even better with this ruse.

Matt-B089

JimmyTheWig wrote: »

I'll give an example...

Lets assume that you normally pay for your weekly shopping on debit card.
Once you get your 0% on purchases card, pay for your weekly shopping on that.
Transfer the amount you spent on card into a savings account.
When the credit card statement comes, pay the minimum amount (some people like to do a direct debit for this; some suggest paying £1 more than the minimum as the minimum gets marked on your credit file).
Your savings account will earn interest.
Your credit card won't charge you interest.
When the promotional period is coming to a close, take the money out of savings and pay the credit card balance.
You will be left with the interest that you have gained.

Remember...
* Always pay at least the minimum, on time, each month.
* Don't go over your credit limit.
* Don't buy things that you wouldn't have done otherwise, just because you've got your stoozing card on you.
* Consider the effect of having this credit card balance when making other credit applications (particularly mortgage).

This is spot on. I also have the same Tesco credit card for 0% on purchases. Basically you're using their money in place of yours and where yours would've gone on food, fuel etc. it's now going into a savings account earning you interest. So you're not actually moving money off the credit card into your savings, more like diverting yours into savings whilst they're paying for you.

UsernameAlreadyExists

Sorry to hijack, but is it possible to take advantage of "stoozing" (i've literally only just learned that's what it's called from reading this thread) with an offset mortgage?
I have no "savings" account as such as it's all in the same pot offsetting the mortgage interest.

The only thing that springs to mind is running up the card to the max (so the higher the limit the better) and paying it off as slowly as possible without being penalised?

cashcatcat

sorry to crash thread - how do u post a new thread i dont have an option at the top. do you have to reply to so many first ?thanks and sorry

mrs_T

If you are registered and logged in there should be a blue "new thread" button above the line saying "Threads in forum:"

JimmyTheWig

UsernameAlreadyExists wrote: »

Sorry to hijack, but is it possible to take advantage of "stoozing" (i've literally only just learned that's what it's called from reading this thread) with an offset mortgage?
I have no "savings" account as such as it's all in the same pot offsetting the mortgage interest.

The only thing that springs to mind is running up the card to the max (so the higher the limit the better) and paying it off as slowly as possible without being penalised?

Absolutely.
Assuming you pay more interest on your mortgage than you could get (after tax) on a savings account then this would be ideal.

UsernameAlreadyExists

Thanks.
I can't help but think I am missing a trick here somewhere, but can't quite figure out how to best capitilize on it

I have a Natwest One account on the lowest interest rate tier (facility is 50% or less of house value) so that's 3.90% (at time of writing)

I also fully utilize an Amex Cashback credit card that I think is paying something like 1.25%? (it changed quite recently) and spend far more than enough each month to cover off the annual fee, and it's cleared by DD every month so I pay no interest there.

I also still have a Barclaycard World (used to be Egg) cashback card for the times when the Amex isn't accepted, but fairly often I don't spend enough per month to cover the £1 monthly fee - but as I am still in plenty enough cashback credit, I don't care about that until it starts costing me.

So how can I start to benifit from stoozing? Any ideas?

zerog

UsernameAlreadyExists wrote: »

Thanks.
I can't help but think I am missing a trick here somewhere, but can't quite figure out how to best capitilize on it

I have a Natwest One account on the lowest interest rate tier (facility is 50% or less of house value) so that's 3.90% (at time of writing)

I also fully utilize an Amex Cashback credit card that I think is paying something like 1.25%? (it changed quite recently) and spend far more than enough each month to cover off the annual fee, and it's cleared by DD every month so I pay no interest there.

I also still have a Barclaycard World (used to be Egg) cashback card for the times when the Amex isn't accepted, but fairly often I don't spend enough per month to cover the £1 monthly fee - but as I am still in plenty enough cashback credit, I don't care about that until it starts costing me.

So how can I start to benifit from stoozing? Any ideas?

Wait until you have a large amount to spend, e.g. holiday booking, new furniture. Spend this on the Amex/Barclaycard to get the cashback, stock up on groceries, top up your oyster, fill up your car to boost the balance too. Then instead of paying it all off by DD the next month, apply for a new 0% card and BT the entire balance. This will pay off the Amex but you won't have to make more than the min payment for the new card.

JimmyTheWig

zerog wrote: »

Wait until you have a large amount to spend, e.g. holiday booking, new furniture. Spend this on the Amex/Barclaycard to get the cashback, stock up on groceries, top up your oyster, fill up your car to boost the balance too. Then instead of paying it all off by DD the next month, apply for a new 0% card and BT the entire balance. This will pay off the Amex but you won't have to make more than the min payment for the new card.

But you'd have to pay the (normally) 3% Balance Transfer fee to do this, which would be more than the cashback on the Amex card.
Would be better to get a card which is 0% for purchases and spend on that.