barclaycard / nationwide stooge

leeroy2009

opened 3rd nationwide account (flexdirect) last week, now showing in my accounts, no money in the 3rd account yet.

just logged in to Barclaycard, can have £2500 transferred to a current account for 12months at 1.90% transfer fee.

never stooged before, but this looks like it should be my first what do you guys think?

and can a calculator head work out what ill make over the year at the basic rate of tax? taking into account the transfer fee? nationwide paying 5% on £2500 for a year

Tixy

Its stoozing

Is the barclaycard currently empty and you won't use it all for anything else?

The transfer fee will be £47.50.
The interest you will earn after basic rate tax, assuming an AER of 5% would be £100 I think.
Overall profit £52.50.

That assumes
1) that you leave in the interest paid on savings each month and that you earn that same APR on the increased balance (to mean that you get the AER rate overall).
2) that you fund the minimum repayments from somewhere that you are not earning any interest. If the monthly minimum payments are funded from the nationwide account reducing the £2500 in there then the profit would be reduced.

leeroy2009

cheers for that tixy, I think ill take £1700 off the Barclaycard and top it to £2500 out of my Santander 123 account (just to lower the transfer fee and increase the overall profit)

the minimum payments will come from my cash reserves held else where.

Barclaycard wont be used for anything else, have 3 or 4 other cards that I currently use (cashback 0% purchase deals etc)

thanks for taking time to help me, ive used your above figures to calculate what profits I will see by only borrowing £1700 off Barclaycard, and im surprised there allowing a current account transfer at such a low rate, that's the lowest offer ive ever had from them and the reason why I have never stoozed before.

vns

leeroy2009 wrote: »

and can a calculator head work out what ill make over the year at the basic rate of tax? taking into account the transfer fee? nationwide paying 5% on £2500 for a year

Calculation you need: =£2500 * 0.05 * 0.80

which is basically £2500 the capital
0.05 = 5% interest
0.80 = 100% of your earning minus the 20% basic tax.

simples!

(The actual amount will be slightly less, because it does not account for the lack of compounding on the interest - but you shouldn't worry yourself with that minor detail.)

sivs

Remember you need to credit the flex direct account with £1000 every month otherwise they will not pay you in the interest.

YorkshireBoy

leeroy2009 wrote: »

I think ill take £1700 off the Barclaycard and top it to £2500 out of my Santander 123 account (just to lower the transfer fee and increase the overall profit)

Not sure I understand?...

Taking £2.5K will deliver a £40.89 net profit.

Taking £1,700 will deliver a £27.80 net profit.

Of course these figures (for a BR tax payer) will reduce still further if you could have filled the 3rd (and possibly a 4th?) FlexDirect account with savings from income anytime soon.

http://www.stoozing.com/calculator/stoozcalc.php


EDIT: And of course when stoozing like this, ie paying a fee, you need to take a long term view on returns. For example, what if Nationwide stop paying 5% on more than one account? You won't find out for a month...so that's 1/12th of your (already low) profit gone. Yes you could open another (BoS/LTSB Vantage, etc) account somewhere else if they're still available. Or maybe you have room at Santander?

For 50p a week I wouldn't have bothered personally...unless there's a secondary benefit, ie cashflow.

Herbalus

YorkshireBoy wrote: »

For 50p a week I wouldn't have bothered personally...unless there's a secondary benefit, ie cashflow.

That's a free (half) pint every month!

But yes, the OP needs to realise that by taking less from the Barclaycard and topping the Flexdirect up with money from the 123, he's losing the interest from the 123 so his overall profit decreases.

leeroy2009

ok £2500 off the Barclaycard to nationwide it is then lol, the £52.50 is nearly a tank of petrol or 4 months house insurance or £52 quids worth of free clothes.

I spoke to nationwide the other day and we got talking about the inters paid on more then one or more flexdirect, his reply was as a good will gesture we will be honouring all accounts for the first year.

infact I just had £80 compo out of them for not paying interest on 2 of my flex directs, after they told me that I had not credited the accounts correctly (which of course I did!) so had the back interest paid on both accounts and a £80 compo payment on top of that.