play with tesco & first direct

alecsa

Hoping to get confirmation that my plan is sound..

I've recently applied for a Tesco credit card 0% purchases for 16 months, and was approved for £3500. I've also applied and was accepted for a first direct 1st bank account and plan to open a Regular Saver account with them, that comes with a 6% interest (fixed term for 1 year). My plan is to put the grocery shopping on the Tesco 0% purchases for the next year and save the money (up to £300 monthly I believe) in the First direct savings account. Then after a year pay off the Tesco card in full. Is that a good plan, am I missing something? Tesco won't be charging any interest as long as I make min payments, right?

Thank you.

mrs_T

Yes, this is called slow stoozing. Don't repay in full after a year, you have 16 months 0% credit available so just find the next best high interest saver and move the lump sum to that. At the end of the 16 months 0% you may wish to move your cc debt to another 0% card and continue earning interest on the stoozed amount if you can find an account that beats the fee on the next 0% card. Some people like to pay a pound or two over the minimum each month as they say it prevents a marker on their credit score, I don't do this and have not had problems getting new cards when I want them.

alecsa

Thanks, well I don't like balance transfers as they tend to come with a 3%+ transfer fee (right?), that is why I am planning to pay it in full.

And I don't like credit card debt either, all those money in the Tesco credit card will be sitting in the FD savings account for one year.

mrs_T

If you look here you can get 26 months 0% for less than a 3% fee http://www.stoozing.com/credit-cards/balance-transfer-cards.php so you only have to earn 1.5% annual interest to beat that. Of course the money should be in a savings account or offset against other more expensive debt like a mortgage.