Stoozing: Make Free Cash from Credit Cards article discussion

nzseries1

avfcforever wrote: »

Thanks for the quick reply jimmythewig

I am not married, and my partner does pay income tax as we are both in full time employment. I have already maxed my ISA for this financial year also so was looking for the best rate where I can access it instantly as have also set up the 10% regular savers account (but there are penalties if you withdraw within 12 mths).. Any suggestions?

If you both pay tax and then you've maxed out your ISA, then Martin's article on the best savings accounts is really good:
http://www.moneysavingexpert.com/savings/savings-accounts-best-interest
I've based my choices of savings accounts on this, and have taken out the Kaupthing Edge account at 6.5% and the Bradford and Bingley account at 6.51%.

Kaupthing also have a really good one year fixed deposit account at 7.15% which I've also taken up.

EDIT: I see jimmythewig already posted the same link. He's a smart man

JimmyTheWig

The trouble is you are not going to be making much money on this deal.

The best you can realistically get is 6.5%, as you need the money within a year. It's a 10 month deal, and you've got to allow at least a month to get your money and pay it back at the end. So 9 months interest at 6.5% is 4.9%. You will then pay 20% tax on this, giving you a net return of 3.9%.

Assuming there is a 3% balance transfer fee, this will leave you with a profit of 0.9%. E.g. that's £90 if you've got a £10k limit. Worth having, but not earth shattering.
Also, what are the minimum repayments? If these are significant and are going to eat into your stooz pot this would make the figures worse.

Just seen you can get a siz-month fixed rate deal of 7.12% from the Bank of Cyprus (http://www.moneysavingexpert.com/savings/savings-accounts-best-interest#fixed). This should help your profit margin.

avfcforever

JimmyTheWig wrote: »

The trouble is you are not going to be making much money on this deal.

The best you can realistically get is 6.5%, as you need the money within a year. It's a 10 month deal, and you've got to allow at least a month to get your money and pay it back at the end. So 9 months interest at 6.5% is 4.9%. You will then pay 20% tax on this, giving you a net return of 3.9%.

Assuming there is a 3% balance transfer fee, this will leave you with a profit of 0.9%. E.g. that's £90 if you've got a £10k limit. Worth having, but not earth shattering.
Also, what are the minimum repayments? If these are significant and are going to eat into your stooz pot this would make the figures worse.

Just seen you can get a siz-month fixed rate deal of 7.12% from the Bank of Cyprus (http://www.moneysavingexpert.com/savings/savings-accounts-best-interest#fixed). This should help your profit margin.

Thanks for your help Jimmy and nzseries... I'll definately check out the Bank of Cyprus and KE accounts..

I am new to stoozing, and have read the guide(s) over and over. Am I wrong in thinking that if I simply use the credit card, instead of my usual debit card to pay for things that I normally would buy, pay the min each month on the credit card, and put the money I would've spent into a savings account (eg Cyprus/KE) then 9 mths time take the money out of the savings, pay off the card and the interest is profit?
20% tax - is that on the savings account?
3% Balance transfer - is this only if I transfer to another 0% card? It I simply pay off the balance then this shouldn't apply, should it?

YorkshireBoy

avfcforever wrote: »

Am I wrong in thinking that if I simply use the credit card, instead of my usual debit card to pay for things that I normally would buy, pay the min each month on the credit card, and put the money I would've spent into a savings account (eg Cyprus/KE) then 9 mths time take the money out of the savings, pay off the card and the interest is profit?

Correct. That's known as slow-stoozing or 'simply spend' stoozing. There's a slow-stoozing guide at http://www.stoozing.com/g_sslow.htm. You can estimate your likely returns using the calculator at http://www.stoozing.com/slowcalc.htm.

20% tax - is that on the savings account?

Yes.

3% Balance transfer - is this only if I transfer to another 0% card?

The 3% fee is charged if you balance transfer FROM another card (ie if fast-stoozing this card you might want to BT from Egg Money), ie if Halifax send money TO another card to settle the debt on there.

It I simply pay off the balance then this shouldn't apply, should it?

Correct.

Frugaldom

Well, I have just had to pay off one of my balances that I had been hoping to transfer to the HSBC offer (13 months at 0% with a 2.5% BT fee) after being told that they cannot proceed with my application because I cannot provide original bank statements as proof of income being paid into bank! :mad: I had already discussed this on the phone with them and was reassured that having paperfree banking was not a problem, just print from screen and send 3 months of statements, which I duly did. These have been rejected as unsuitable, so they asked about statements from savings accounts. Of course, my savings accounts are e-savers, one of them being HSBC, so no statements there, either! I ended up telling them politely what to do with the application and, as a result, will need to wait for the Egg anniversary offer to come around again (if it comes around again!) as I don't want to put through any more searches on my file. I think I may have maxed out on cards for this year

Edited in - just in case it helps, I was shuffling 7, now down to 6 after cancelling one, but would have preferred to cancel a further 2 in favour of the HSBC 13 month offer combined with the ICICI 7.2% for 12 months offer. (ISA allowance was used up as soon as it became available.)

TiVoMD

Hi all,

This is my first post (so please go easy), I have been a long time reader of MSE but recently I have fallen short with my money saving and would appreciate some advice about how I should proceed.

For the last month I have been using my newly opened LeedBS credit card for the purpose of Stoozing and all has been going well purchase wise and I have been placing my actual money in a quick access saving account.

However, ten days ago I needed to go to Italy at short notice, so I had a check on MSE and since I knew I would be charged commission for purchases made in a foreign currency, I choose to get some Euros (€300) via Travelex and collect them at the airport.

Unfortunately, when I returned home and checked my LeedsBS credit card statement, I have been charged a 'cash advance admin fee' for the purchase with Travelex costing £7.44 and now I need to pay the full balance off to avoid any interest charges.

What should I do, just pay the card off in full, or complain and try to get the cash advance & the admin fee removed?

I don't really want to pay the balance off in full as I will have to start again, but I don't know how to best complain whilst keeping my 0% rate.

Many thanks in advance,

JimmyTheWig

TiVoMD wrote: »

What should I do, just pay the card off in full, or complain and try to get the cash advance & the admin fee removed?

There's a third option - carry on as though nothing had gone wrong and accept the interest.

Will you have to pay interest on the 300 Euros cash, or just on the fees?

What's your credit card balance?
How long have you been doing this?
How long left to go on your interest free period?
What's your credit limit?

My point is that if you're only paying interest on £7.44 you might (depending on the above) be better to take that hit (and chalk it up to experience for next time) but keep the rest of your balance at 0%.

Certainly worth a go at getting the fees removed, but I don't hold out much hope. I think it was a cash advance and so you're stuck with them. But nothing to be lost by asking.

TiVoMD

Thanks JimmyTheWig for the quick response, I wasn't sure if I should have posted in the 'Cheap Travel Money Discussion Area'.

JimmyTheWig wrote: »

There's a third option - carry on as though nothing had gone wrong and accept the interest.

Will you have to pay interest on the 300 Euros cash, or just on the fees?

Hmmm, I'm not sure. This is my first opening statement. See below.

JimmyTheWig wrote: »

What's your credit card balance?
How long have you been doing this?
How long left to go on your interest free period?
What's your credit limit?

Balance £1,845.96
This is my first statement, it is a 0% for 6 months card.
Purchases are at 0% until sometime in December, recently recommended by MSE
Total Credit Limit £4,200
Total Purchases £1,620.01
Cash Advances £244.56 (This is how much I paid for the €300)

Interest £1.34
Estimated Interest - Next Statement £4.63

JimmyTheWig wrote: »

My point is that if you're only paying interest on £7.44 you might (depending on the above) be better to take that hit (and chalk it up to experience for next time) but keep the rest of your balance at 0%.

Certainly worth a go at getting the fees removed, but I don't hold out much hope. I think it was a cash advance and so you're stuck with them. But nothing to be lost by asking.

I'll have to ring again and try and complain. The other annoying thing is you can't buy from Travelex by anyother method other than debit or credit card!

This last month has been unusually high for me on my credit card (I usually spend approx. £850/month) as I was able to put all my shopping on this one card, as well as my car & house insurance etc.

Since my credit limit is currently low and wouldn't cover me until December, I wonder if it would be worth making the whole payment anyway, so that my credit limit would increase for the remaining five statements?

JimmyTheWig

Great answers, thanks.
Ok, yes it looks like you are paying interest on the £244. It's a bit close to call.

Lets assume that you're stoozing this money in a 6% account and you aren't paying tax on the interest (e.g. ISA, non-tax paying spouse, etc). £1620 will give you £8.10 a month in interest. You've then got to pay £4.63 in interest to the credit card company. So it's probably worth keeping the balance on there and taking the hit.
If you're paying tax on your interest then that makes it less worth while.

And then you won't be able to do anything with your last month's spending, as your credit limit will be used up, so you'll lose a bit there.

To my mind the figures come out pretty similar whether you pay it off or keep going. So go with whatever makes you feel more comfortable.
If you are paying it off, do so as soon as possible, as they will charge interest daily.


One more question, what's the minimum repayment?

YorkshireBoy

JimmyTheWig wrote: »

£1620 will give you £8.10 a month in interest.

The stooz pot contains over £1,800 doesn't it Jimmy?

Makes the case for swallowing the cash advance interest a little stronger maybe?