Stoozing from my CC

mt77

Hello all,

Yesterday I received a letter from my credit card (Barclaycard) offering me a 90% money transfer of my credit limit to my current account, minus any outstanding balances on my CC (£6000 credit limit). This is at 0% until May 2014, with 1.9% fee.

This got me wondering whether I could make some profit by stoozing about £5000 from my CC to my Santander 'First Home Saver' account, which is currently paying 3% interest before tax.

Some rough calculations I did yesterday:
* £95 fee on £5000.
* £60 interest gained on £5000 stoozing (but my total balance in Santander account would be around £46,000 after the transfer, so not entirely sure about the interest calculations on this).
* I would, of course, pay back the minimum required each month / the entire balance by May 2014 (therefore not incurring any interest charges. Or, in worst case scenario, withdraw the £5000 and pay back CC before incurring any interest charges from Barclaycard).
* Prior to this offer I was already saving quite aggressively such to the point where I plan on having just shy of £50,000 in my First Home Saver account by next April 2014 (which is the absolute limit of the account before Santander stop paying interest). Paying in around £2,000 a month.

Are my calculations correct? Am I missing anything from here? Any other considerations before taking this out? I have never done stoozing before, so I am unsure whether it is worth my wile to go for this offer. Grateful for your opinions.

Best regards

MT

centaurandrew

So it would cost you £95 to take the £5000 out.

You'd put it in an account earning 3% interest for 6 months, which would earn you £75. As a basic rate tax payer you'd get the £60 you quoted.

So you'd make a £35 loss?

JimmyTheWig

mt77 wrote: »

Am I missing anything from here?

Only the fact that the fee is greater than the interest gained. I.e. you'll lose out on the deal.

mt77

I had a feeling it was a bad deal. I was getting confused with the interest I would earn from the £46k balance (and reaching £50k earlier). Though as you say, it still is a bad deal. Thanks for bringing me to my senses. Never trust a banker eh?!

Best regards

MT

Eonel

mt77 wrote: »

I had a feeling it was a bad deal ........ Never trust a banker eh?!

Even as a stoozer myself, OP should still keep perspective here.

It is a great deal for those with real debt at full rates of interest. Cash Transfers were not conceived for you to profit from.

YorkshireBoy

centaurandrew wrote: »

So you'd make a £35 loss?

The loss is worse than that, due to the lost interest on cash used to make the 2.25% minimum payments...

Stoozing Profit Prediction

Data entered by the user
Balance to be transferred (pounds)...... 5000
BT card interest rate (%) .............. 0
Introductory period (months) ........... 6
Balance Transfer Fee (%) ............... 1.9
Maximum BT Fee (pounds)................. No Maximum
Min Monthly Payment Type ............... Percentage
Min Monthly Payment Amount (% or pds) .. 2.25
Savings interest rate (AER %) .......... 3
Tax rate ............................... Basic Rate

Your Results
Balance Transfer Fee paid (pounds)...... 95
Stooz pot balance at end of intro ...... 4420.04
Credit card balance at end of intro .... 4444.72
Gross Profit before tax on interest .... -24.68
Tax on interest to be paid ............. 14.06
Your Profit (pounds).................... -38.75

Created using the Stoozing Calculator at www.stoozing.com.
Reproduced on Moneysavingexpert with permission.

If you get any more offers, run them through the stoozing calculator here before acting on them...

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