How much does the average stoozer make?

deed02392

ricky_v wrote: »

Simply apply for a 0% on purchases credit card, use it for all your purchases, pay off the min +£1 every month, put the amount you've spent on the card that month in a savings account. Repeat until you're near the limit, then just service the card by paying the min +£1 every month. When it gets close to the end of the 0% period either;

a) Balance transfer to a new 0% card, and carry on with min +£1 payments on that.
b) Use the "savings" to pay the balance off in full before interest is charged. Close the card, wait until it shows up on settled on your credit file, then start all over again.

What's the logic behind the +£1? I have a Tesco Clubcard Credit card that I'm using direct-debit to pay the minimum monthly off (£25).

MallyGirl

I do the same. Some people reckon that paying slightly over the minimum looks better on a credit report. I have never felt the need to faff about like that and it has never affected my ability to get credit

ricky_v

To be honist I've never seen proof that paying £1 above the min payment makes a difference, it could be a myth on here, however it doesn't do any harm if you pay £1 more than the min in my opinion.

brendon

scoly wrote: »

I don't think anyone makes money specifically out of stoozing do they?

They can just avoid losing as much.

That's a very important difference.

Stoozing is taking interest-free debt and making interest on it in a savings/investment. So, if you have £20k on a credit card at 0% and £20k in a savings account at 3%, you are making £600 /year. You can't lose as long as you have the money to offset your debt.

YorkshireBoy

ricky_v wrote: »

To be honist I've never seen proof that paying £1 above the min payment makes a difference, it could be a myth on here,

As I replied in another thread a short while ago on the credit ratings board, there will have been set up costs (for both lenders and the CRAs) involved in establishing this higher level of reporting.

They (specifically the lenders) wouldn't have spent this money if they didn't want to know whether people were making minimum payments or not, and if they were was it because they were on a promotional rate or not.

I must admit that, although I've often suggested to others that it's better to pay £1 more, I don't do it myself because it's too much of a faff for me. However, I can say with 100% certainty that if I had 'real' debt, rather than stoozing debt (and no need for mortgages or loans etc), I would be paying more than the minimum...even if it was just £1...and even on a 0% card.

Martinslovechild

brendon wrote: »

Stoozing is taking interest-free debt and making interest on it in a savings/investment. So, if you have £20k on a credit card at 0% and £20k in a savings account at 3%, you are making £600 /year. You can't lose as long as you have the money to offset your debt.

Bear in mind that you're making £600/year only if you can find a tax-free account which pays 3%. In a tax-paid account, most people will receive 2.4% net on this amount (equating to £480/year).

Alternatively, with the money safely tucked away in a mortgage offset account, it is indeed possible to receive an 'effective' interest rate of somewhere around 3% - even though in actual fact you receive £0 in your hand, you benefit from not paying interest on £20K of your mortgage for the period of the deposit.

jamesd

scoly wrote: »

I don't think anyone makes money specifically out of stoozing do they?

Then you really should think again. I made more than £12,000 in 2009-10 by stoozing and using investments with the money. Now I have it helping my total investment pot in a range of ways, including lending at over 20%. Stoozing can be very profitable, though the ways I mentioned are not the risk free ways that are most popular. I use them as well, for uninvested money.

At the moment, not allowing for lending speed, if I was to borrow £10,000 on credit cards I'd be lending to make around £2,500 taxable a year on a mixture of loan maturities from 18 to 60 months. With ways to repay the cards if I needed to, without having to wait for the loans to be paid off. But that's lending to Estonia in Euros and that mandates a tax return so it won't be appropriate for most people.

scoly wrote: »

They can just avoid losing as much. That's a very important difference.

Stoozing is about borrowing extra money that you can repay when you want to. If someone is losing money then that's more a sign that they are being a card tart to cut the cost of unsecured credit which they can't pay off.

deed02392 wrote: »

What's the logic behind the +£1? I have a Tesco Clubcard Credit card that I'm using direct-debit to pay the minimum monthly off (£25).

Some credit cards report whether only the minimum payment was made to the credit reference agencies. That flag is there specifically to help identify people who may be in financial difficulties and forced to make only minimum payments. No need to have that flag set when an extra Pound a month can avoid giving that false impression. It's not particularly time-consuming to set up a standing order to pay a Pound a month a day or so before the normal payment due date for as long as the deal lasts.

iAMaLONDONER

jamesd wrote: »

Then you really should think again. I made more than £12,000 in 2009-10 by stoozing and using investments with the money. Now I have it helping my total investment pot in a range of ways, including lending at over 20%. Stoozing can be very profitable, though the ways I mentioned are not the risk free ways that are most popular. I use them as well, for uninvested money.

At the moment, not allowing for lending speed, if I was to borrow £10,000 on credit cards I'd be lending to make around £2,500 taxable a year on a mixture of loan maturities from 18 to 60 months. With ways to repay the cards if I needed to, without having to wait for the loans to be paid off. But that's lending to Estonia in Euros and that mandates a tax return so it won't be appropriate for most people.

Stoozing is about borrowing extra money that you can repay when you want to. If someone is losing money then that's more a sign that they are being a card tart to cut the cost of unsecured credit which they can't pay off.

Some credit cards report whether only the minimum payment was made to the credit reference agencies. That flag is there specifically to help identify people who may be in financial difficulties and forced to make only minimum payments. No need to have that flag set when an extra Pound a month can avoid giving that false impression. It's not particularly time-consuming to set up a standing order to pay a Pound a month a day or so before the normal payment due date for as long as the deal lasts.

What investments did you make to make as much as 12k?!

jamesd

iAMaLONDONER wrote: »

What investments did you make to make as much as 12k?!

Normal funds held outside an ISA in a fund account. Things like emerging markets funds and UK stock market trackers. When I did the borrowing markets were at low levels/prices so I benefited from the recovery in those prices.

The same opportunity isn't around in those places at the moment because prices are higher today. If you want to copy that, either don't use funds or wait until after the next substantial market drop, rather than the small drop there's been this year so far. Be sure that you can repay or at least BT the card balances if things don't go as you'd like, like a slower recovery in prices than desirable or more drops.

Others have done things like funding their ebay trading or helping out with property deposits for BTL.

None of this is the safe and certain stoozing using savings accounts and offset mortgages. It's the sort of thing you should only be doing if you really can handle the ups and downs and only for a suitably modest portion of your total wealth, so you won't get too badly hurt if it all goes wrong somehow.

What I like to do is keep at least enough to clear the highest card balance in a mortgage offset account. This still lets me invest much of my emergency fund but leaves me with options if it's not a convenient time to repay or if I can't get good BT rate for some reason. And these days my ISA and other accessible investments are enough for me to live on for years, probably until state pension age and on, now. They weren't at the start, so I was more cautious at the start. A mixture is good, don't get carried away with the big numbers and always have a plan for what to do if you can't refinance a card.

apple_mac_user

is stoozing good/bad for credit rating? (currently have good gredit rating)