Is Stoozing Worthwhile?

edited 30 November -1 at 1:00AM in Stoozing: Free Cash from Credit Cards
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CottaCotta Forumite
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Hi All,

I've read through most of the artciles on here and I have to ask if this process is worthwhile? What returns are people making and is a lot of effort being required?

From what I understand it's a lot of switching etc for very little in return and if you get it wrong the penalty will account for more than any gains that may have been made. I'm happy to be proven wrong and I await with interest your views.

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  • edited 28 June 2014 at 9:43AM
    hugheskevihugheskevi Forumite
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    edited 28 June 2014 at 9:43AM
    I've read through most of the artciles on here and I have to ask if this process is worthwhile?

    Generally yes, although it depends on individual circumstances and may need some work and/or imagination to get a decent return.
    What returns are people making and is a lot of effort being required?

    The returns depend on a number of factors - what accounts/investments the stoozed money is being used against, marginal income tax rate, and so forth.

    The amount of effort required depends what you want to do. If you just put all the stoozed money into a cash ISA then the effort is minimal but so are the gains. If instead you use the money to take advantage of the various current account and regular savings accounts as well as referral and cashback bonuses and such-like on the credit cards the returns are better but that is more effort.

    Stoozing can lead to some amusing adventures too - I fondly recall the time I bought about £10,000 of Travellers Cheques from M+S, and exhausted them of larger denominations so a lot of them were in £10 cheques...so much signing...I probably wouldn't do things like that again, too much work, but also fun in a way too.
    From what I understand it's a lot of switching etc for very little in return and if you get it wrong the penalty will account for more than any gains that may have been made.

    There is no reason to get it wrong - it is simply a diary entry for x months later.

    As to little return, it depends what you do with it. Regular saving accounts pay as much as 6% whilst costs of switching might account for maybe 1% p/a averaged out and taking into account balance transfer fees.

    Personally I just use the stoozed cash for extra liquidity (which is different to the standard method of putting saving into accessible accounts, but as I have a secure income I don't feel the need to hypothecate the saving), so it has gone toward whatever investment I am working on a particular time. That has meant at various times pension contributions, debt repayment, ISA savings and mortgage repayments. My rate of return has varied between about 5%-7.5% (after tax) on stoozing funds which are generally about £30-£40,000 which has been consistent for several years now. Taking 1% for expense of balance transfer fees, that has been an annual return of about £1,750. In many ways, I treat the stoozing debt just like a mortgage with an interest rate of about 1%, except it isn't secured on house and you can never be certain you can transfer the funds so have to be ready to pay if required.
  • jamesdjamesd Forumite
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    It really depends on what you do. I invested stooze money in early 2009 and made a profit of about 30% of the money borrowed in a year. Like hugheskevi I use the stooze pot as a source of money for whatever else I'm doing at the time.

    It's not particularly hard to keep on top of things if you do something like setting reminders and using a spreadsheet to track what you've been up to.

    A slow stooze with a 0% for purchases card used for all possible spending is the easy way to get a profit from low return things like savings accounts. Not particularly profitable but not hard either.
  • ricky_vricky_v Forumite
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    My stooz pot is ~£3200 earning 4% net interest, which is £128 a year or just over £10 a month. Most of the pot is at 0% for another year.

    With stoozing you can either do the boring method of savings account, or by doing the lottery for free by putting it in premium bonds, or off-setting your mortgage rate, as the previous posters have said it can be easily used as a pot of money for whatever investment you fancy.
  • stevemcolstevemcol Forumite
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    Happy days before balance transfer fees, using EGG money for SBT and good savings interest rates (ICICI account though I did have a heart flutter when the offshore bank crisis hit!). Not sure I could be bothered now.
    Apparently I'm 10 years old on MSE. Happy birthday to me...etc
  • edited 19 July 2014 at 9:38AM
    adindasadindas Forumite
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    edited 19 July 2014 at 9:38AM
    hugheskevi wrote: »
    My rate of return has varied between about 5%-7.5% (after tax) on stoozing funds which are generally about £30-£40,000 which has been consistent for several years now. Taking 1% for expense of balance transfer fees, that has been an annual return of about £1,750. In many ways, I treat the stoozing debt just like a mortgage with an interest rate of about 1%, except it isn't secured on house and you can never be certain you can transfer the funds so have to be ready to pay if required.

    How did you get ROR of 5-7.5% if most of the current account where you could put reasonable amount of money are just paying 3% gross. Are you talking about a large sum of money, above £20,000 (say). I am very familiar with almost all (if not all) of high interest rate current accounts in the UK. I only know one RSA paying 6% (gross) but this is only limited to £300 per month.

    So how did you get return of 5-7.5 (net) Are you talking about a large sum of money, above £20,000 (say) ??
  • hugheskevihugheskevi Forumite
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    How did you get ROR of 5-7.5%

    At first it was used to reduce a mortgage at 5% (quite a few years ago).

    Then it was used to preserve a cash ISA with 5% interest rate taken out back in 2009 - that sadly comes to an end this month.

    Then it was used to enable higher personal pension contributions. Most of that was into investments, and my average rate of return on those pension investments over the period is about 7.5% p/a (on top of tax relief), although that is very volatile.

    Some was also used to enable voluntary contributions to my Defined Benefit pension, which has a risk-free rate of return of about 5% (on top of tax relief).

    Using risk-free current and savings accounts was unattractive as I'm a higher rate taxpayer, and cash ISAs are woeful. Hence stoozing is just extra money to put toward whatever investment I'm currently focusing on. That could be viewed as risky, given it is basically leveraged investing, but the risk is small as I can afford a loss should one materialise and in the long-run I should end up comfortably ahead.
  • edited 20 July 2014 at 8:38AM
    adindasadindas Forumite
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    edited 20 July 2014 at 8:38AM
    hugheskevi wrote: »
    At first it was used to reduce a mortgage at 5% (quite a few years ago).

    Then it was used to preserve a cash ISA with 5% interest rate taken out back in 2009 - that sadly comes to an end this month.

    Then it was used to enable higher personal pension contributions. Most of that was into investments, and my average rate of return on those pension investments over the period is about 7.5% p/a (on top of tax relief), although that is very volatile.

    Some was also used to enable voluntary contributions to my Defined Benefit pension, which has a risk-free rate of return of about 5% (on top of tax relief).

    Using risk-free current and savings accounts was unattractive as I'm a higher rate taxpayer, and cash ISAs are woeful. Hence stoozing is just extra money to put toward whatever investment I'm currently focusing on. That could be viewed as risky, given it is basically leveraged investing, but the risk is small as I can afford a loss should one materialise and in the long-run I should end up comfortably ahead.

    Well, it is clear now that you are not talking about stoozing but about investing in fund. I though you were talking about delicate technique that the serious stoozers (as below) have not known.

    I fully believe the serious stoozer here will disagree with you if what you have done to be called stoozing.
    http://stoozing.com/forum/YaBB.pl?board=gen

    Also look at here about the definition of stoozing
    http://en.wikipedia.org/wiki/Stoozing

    Many peer to peer lending, or zopa will give you the return you mention. But that is not a stoozing. The fact that you want to take risk is your thing, but calling what you have done as a stoozing is misleading.
  • hugheskevihugheskevi Forumite
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    Well, it is clear now that you are not talking about stoozing but about investing in fund.

    I think that was clear from my initial post where I said:
    Personally I just use the stoozed cash for extra liquidity (which is different to the standard method of putting saving into accessible accounts, but as I have a secure income I don't feel the need to hypothecate the saving), so it has gone toward whatever investment I am working on a particular time.

    jamesd found it clear enough:
    I invested stooze money in early 2009 and made a profit of about 30% of the money borrowed in a year. Like hugheskevi I use the stooze pot as a source of money for whatever else I'm doing at the time.
  • HerbalusHerbalus Forumite
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    Well, according to the MSE email, "stoozing is back".

    Not that there are any new products that haven't been available for the last....year?

    But good to see it given a little more prominence.
  • benj1ebenj1e Forumite
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    We've been doing this for some time now- but be warned, with the tighter rules when it comes to remortgaging, our new lender wasn't pleased to see a £3000 debt on the credit card and it had to be paid off quickly......
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