Advice please on using credit cards to pay interest on mortgage

homersimpson_3

Presently have no credit cards but mortgage and would like to reduce amount of interest on this. My mortgage is apparently flexible- can pay off lump sum and borrow on mortgage account but would need to double check this.
Which cards are the best to apply for? Can I make money by applying through websites (e.g R points) etc? If so which sites should I use? How much do credit cards usually lend you (do they base it on % of income?)
What pitfalls should I avoid? . What if the credit card company ask for all the money back. Are the savings to be made worth then contacting mortgage compnay and telling you need £x amount out of mortgage accounts to pay off credit card at end of 0% deal? Are the savings really worth messing about with your mortgage and cedit history. Does being in debt to credit card companies and not paying off debts for months (only paying minimum payments) damage your credit history/ability to get credit in future?
Thanks

Reaper

Wow, that'a a lot of questions. Start here: https://www.stoozing.com
If you have any questions after reading that lot then by all means come back and ask.

grumbler

Agree with Reaper!
However I already have my answer ready. Here it is:

Toooo many questions for one post and toooo general questions….

homersimpson wrote:

Which cards are the best to apply for?

Those with the highest limit, longest 0% period and fee-free balance transfers. Just look through this board and through CREDIT CARDS section.

Can I make money by applying through websites (e.g R points) etc

Yes you can. The others are GreasyPalm, Cashbin, LineMyPocket, MyShopingRewards, MutualPoints, BigHair, FundsForMe, …… Do not expect to make a lot - usually just a few pounds.

If so which sites should I use

Choose a card, then check all of them. Offers change.

How much do credit cards usually lend you (do they base it on % of income?)

It depends. Income is an important, but not the only factor. Different companies have different policies.

What if the credit card company ask for all the money back.

You must have easy access to ‘stoozed’ money.

Are the savings to be made worth then contacting mortgage compnay and telling you need £x amount out of mortgage accounts to pay off credit card at end of 0% deal? Are the savings really worth messing about with your mortgage and cedit history.

:mad:

Does being in debt to credit card companies and not paying off debts for months (only paying minimum payments) damage your credit history/ability to get credit in future?

I do not think so (not 100% sure).

Reaper

homersimpson wrote:

Does being in debt to credit card companies and not paying off debts for months (only paying minimum payments) damage your credit history/ability to get credit in future?

grumbler wrote:

I do not think so (not 100% sure).

Your credit history does not record how much you pay off each month, just whether you paid at least the minimum amount on time. So the amount you pay has no bearing. However having lots of existing debts makes it harder to get more, and requesting lots of new credit in a short period of time (whether or not it is granted) also damages your rating.

However the former can be repaired at any time simply by paying it back and canceling the cards, and the latter becomes pretty unimportant after a few months have passed. So unless you need a glowing credit rating for some reason (eg just about to get your first mortgage) then it is worth taking a small hit considering the money to be made/saved.

homersimpson_3

The https://www.stoozing. com page and Martin under article ‘REVENGE! Make Free Cash from Credit Cards’ website says take the money from credit card, pay into high interest savings account with easy access. Pay minimum amount each month of 0% credit card and you will get interest paid on savings account. Transfer debt to another 0% credit card or if not possible pay off debt at end of introductory period. Hence money for nothing.
But Martin's article ‘REVENGE! Make Free Cash from Credit Cards’ also says
“Anyone with a flexible mortgage, where money can be deposited and then taken out at will, should simply pay all the cash into that. The interest reduction on your mortgage will outweigh even the best cash ISA returns”.
Martin seems to be saying it is better to use money from card to pay off mortgage rather than putting into savings account and then at end of introductory period you take money back from mortgage account to pay off debt.
What if mortgage provider says no you're not having £x out of mortgage account. Is there are reason why they could or would say this? If so you end up with a huge debt on credit card!
What’s the best route? .

Reaper

homersimpson wrote:

Martin seems to be saying it is better to use money from card to pay off mortgage rather than putting into savings account and then at end of introductory period you take money back from mortgage account to pay off debt.

That's because the % rate you are saving if you have an offset/flexible mortgage is greater than you could earn putting it in a savings account. However if you do not already have one of these types of mortgages you are not necessarily better off switching to one (there is some maths involved - see the Mortgages forum where there is a Sticky thread if you want more detail).

What if mortgage provider says no you're not having £x out of mortgage account. Is there are reason why they could or would say this? If so you end up with a huge debt on credit card!

If you have a flexible/offset mortgage then the whole point is that it is entirely up to you how much you over pay and you are free to take overpayments back out at any time. If you have an ordinary mortgage then you can not freely take money back out and therefore it is unsuitable as a home for stoozed money. A basic principle of stoozing is that you must always be able to repay the money at short notice in case you are unable to keep it going.

grumbler

homersimpson wrote:

What if mortgage provider says no you're not having £x out of mortgage account. Is there are reason why they could or would say this? .

Martin's advice applies to those with flexible mortgages. Most mortgages are not flexible. Offset mortgages give you full flexibility, but they are usually more expensive.
If your mortgage is not flexible your best choice are easy-access saving accounts (ING, A&L online saver), cash ISAs and regular saving accounts.

SAVINGS section
Starting Saving...the ‘Savings Fountain’ article

emh_2

Reaper wrote:

Your credit history does not record how much you pay off each month, just whether you paid at least the minimum amount on time. So the amount you pay has no bearing. However having lots of existing debts makes it harder to get more, and requesting lots of new credit in a short period of time (whether or not it is granted) also damages your rating.

However the former can be repaired at any time simply by paying it back and canceling the cards, and the latter becomes pretty unimportant after a few months have passed. So unless you need a glowing credit rating for some reason (eg just about to get your first mortgage) then it is worth taking a small hit considering the money to be made/saved.

Another thing to bear in mind, although it depends how much you are stoozing.. When I recently remortgaged my property to pay for an extension, I was asked if I had any outstanding debts. The only debt I have is £30k from credit card stoozing which is sitting nicely in savings accounts. Thought I better declare it. Mortgage adviser told me she would have found out about it even if I hadn't declared it, and the irony was that although the money was in a savings account, the mortgage computer would not take it into consideration when deciding whether to give me the extra money for the extension. I failed the application until she decided to take the credit card debt off understanding what I had been upto, and then I passed.

just something to consider...

smartsaver

We had the same problem. 70k in the banks 70k on credit cards. Britannia were unhappy that we may spend our 'savings'. When we adv the under writers we were going to invest this in an offset Mortgage there were ok with this. If we spent the money we would pay with a higher interest mortgage...
As it is we are payong very little in interest...

Martinslovechild

smartsaver wrote:

When we adv the under writers we were going to invest this in an offset Mortgage there were ok with this.

Smartsaver, not sure I follow. What did you do to the underwriters?

smartsaver

We provided the underwriters with details of our savings accounts and said we would move this money to our offset mortgage.

If had we decided to leave the money where it was or spend it, the building society would gain as we would be paying a higher rate of interest than on a non flexible mortgage. I have to say we already had a mortgage with this company.

The building society manager worked out we were 'stoozers' and was impressed and amazed by our stoozing pot which was 81k at the time and will be again soon thanks to IF and EGG anniversary .

He said he had heard of people doing this but had never seen it in action before. Maybe there are not so many of us.