Stoozing: Make Free Cash from Credit Cards article discussion

JimmyTheWig

YorkshireBoy wrote: »

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

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

Oh I see what you mean. Yes it does. They will be "stoozing" the cash advance, too.
Yes, that's about another pound a month, at basic rate tax.

I'd say, then, unless you're paying higher rate tax on your savings that you should take the hit and pay the minimum.

TiVoMD

JimmyTheWig wrote: »

Great answers, thanks.

No problem, you are taking the time to give me advice it is the least I can do.

Thanks to YorkshireBoy also.

JimmyTheWig wrote: »

Lets assume that you're stoozing this money in a 6% account....

Correct, I have it in my ISA at the moment but when I reached that limit (in a few months) I was going put stoozed cash in my Kaupthing Edge savings account.

JimmyTheWig wrote: »

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.

Is this daily interest from the date of the cash advance, the date of the statement or the payment date?

JimmyTheWig wrote: »

One more question, what's the minimum repayment?

Statement date: 15th Aug
Payment date: 12th Sep 2008
Minimum payment: £37.00

Ok, so if I understand everything correctly. On the 12th Sep I make the minimum payment. Then the following month I will have gained interest amounting to the £4.63, but I will have also gained further interest in my savings account and both of these will be compounded month on month until my 0% runs out.

Man this gets complicated quickly when you have multiple types of charges. Thankfully, I haven't any balance transfers on this card!

Speaking of which, would it be a good idea to get an 6 month 0% on balance transfers cards (such as Abby Zero) that don't charge a transfer fee and transfer my £1,845.96 balance to that card?

I'll let you know how my complaint to LeedsBS goes, although I'm not hopeful!

JimmyTheWig

TiVoMD wrote: »

when I reached that limit (in a few months) I was going put stoozed cash in my Kaupthing Edge savings account.

What rate of income tax will you have to pay on this? If it's basic rate or less then you'll be fine. If you pay higher rate tax then this might affect things.

Is this daily interest from the date of the cash advance, the date of the statement or the payment date?

Unfortunately, for cash advances, it is usually the date from the cash advance. But the relevant point here is that you've been charged interest so they will continue to do so daily.

Statement date: 15th Aug
Payment date: 12th Sep 2008
Minimum payment: £37.00

That minimum payment will cut into your profits, but not too badly.

Ok, so if I understand everything correctly. On the 12th Sep I make the minimum payment. Then the following month I will have gained interest amounting to the £4.63, but I will have also gained further interest in my savings account and both of these will be compounded month on month until my 0% runs out.

Correct. I don't think the compounding will have much of an effect, though. The relevant thing is that although you will be paying a higher interest rate on the cash advance than you will gain on your savings, you will only be paying interest on about £250 but you will be earning interest on about £1800.

would it be a good idea to get an 6 month 0% on balance transfers cards (such as Abby Zero) that don't charge a transfer fee and transfer my £1,845.96 balance to that card?

Depends on what you class as a good idea.
There's no fee and no interest, so from that point yes it's a good idea.
But it's a credit search against your name and more credit on your file.
I would suggest you don't go for a balance transfer at this point, but when your interest free preiod is coming to an end apply for a new card (in plenty of time to organise the switch) and transfer the whole balance at that time, getting another 5 months or so for your stooz pot.

andrewf_2

Whoops a bit long this (SORRY!)

Already got the Virgin card at the usual rates listed here. Lucked out when I cancelled an old Sony card (got for two free bluray films) as they passed the £5K limit over to my Virgin card at the same deal

I've set up a spreadsheet to monitor all of this and have been looking at various cards using the calculator over at whats the cost.

Just wanted confirmation I have some figures right.

When paying back the min fee each month, most cards (Tesco as an example) say.............

3% of outstanding balance (excluding 'Tesco Buy Now - Pay Later' promotional offers) or £5, whichever is more............

or similar. Generally they have the 3% or xxx which ever is more (MORE being the used word), so I've calulated the min on the % figure.

However some like the MBNA / Virgin cards and the Abbey Zero card seem to say the opposite way around (LEAST being the used word).

Abbey..........................

Each month you must pay at least the minimum payment set out in your statement. The minimum payment will be the lesser of:

• 2.25% of the balance shown in your statement (minimum £5, or the full balance if less than £5); or
• the total of payment protection premiums plus interest and fees charged on the statement, plus £5....................

In this case will the min pay be only £5?? If so then even though thsi is only for 6 months, the fee free BT and low min rate makes it a very good return

Likewise

Virgin..............................

If the balance shown on your statement is £25 or less, it will be the total amount of the statement balance; or if the balance shown on your statement is more than £25, it will be whichever is the least of 3% of the statement balance or the total of any Payment Protection Cover charges, interest, handling fees and default charges plus £5, provided that it will always be at least £25....................

In this case will the min be £25?

Cheers Andrew

YorkshireBoy

Andrew,

With the Abbey Zero, the minimum payment during a 0% promotion period is indeed £5 per month.

With Virgin (and other MBNA run cards) your 1st minimum payment includes the BT fee, so in the case of Virgin it'll be 'around' 3% (whether it's 3% or 2.98% + £5 will depend on the size of the balance [around £4.7K is the flip point IIRC]).

Subsequent minimum payments are indeed £25...but only during a 0% period.

NickX

andrewf wrote: »

However some like the MBNA / Virgin cards and the Abbey Zero card seem to say the opposite way around (LEAST being the used word).

You are correct.

MBNA run cards such as Virgin and Abbey cards are the exceptions to the rule.

They offer a fixed low Minimum Payment of between £5 and £25 whilst in the promotional period.

All other cards that I am aware of require you to pay between 2% and 3% of the outstanding balance.

So, yes, MBNA and Abbey are the stoozer's friends :beer:

andrewf_2

YorkshireBoy wrote: »

Andrew,

With the Abbey Zero, the minimum payment during a 0% promotion period is indeed £5 per month.

With Virgin (and other MBNA run cards) your 1st minimum payment includes the BT fee, so in the case of Virgin it'll be 'around' 3% (whether it's 3% or 2.98% + £5 will depend on the size of the balance [around £4.7K is the flip point IIRC]).

Subsequent minimum payments are indeed £25...but only during a 0% period.

Thanks. Glad my workings appear to be right. This makes the Abbey a good deal. Know its shorter period but the gains are better than some of the really long periods!

Re Virgin, I assumed that the BT fee would get added to my balance before the min payments were being made, and so I'd just pay £25. I take it from what you are saying that this doesn't happen, rather you have to pay it?

Or is it that the BT fee is classed as a 'handling fee' and so I'm stuck with the lessor of 3% of the balance or £142 + £5 for the first payment?

Andrew

YorkshireBoy

andrewf wrote: »

Re Virgin, I assumed that the BT fee would get added to my balance before the min payments were being made, and so I'd just pay £25. I take it from what you are saying that this doesn't happen, rather you have to pay it?

Assumed, thought, guessed, etc are not words to be associated with stoozing, since getting it wrong can cost an awful lot of money!

Or is it that the BT fee is classed as a 'handling fee' and so I'm stuck with the lessor of 3% of the balance or £142 + £5 for the first payment?

Haven't checked your numbers but the principle is correct, yes.

andrewf_2

Yes 'assume' is a dangerous word . Working in accounts I should know better :rolleyes:

Thanks to the last two of you, I am confident I know what I'm doing. The inital min rates was all that I wasn't 100% on.

Off to get the rest of the cards now.

One last thought. Is it best to take one month of the rate each time, so preparing for the pay off or transfer to the next card before the rate ends. So a 6 month to be treated as a 5 etc?

NickX

andrewf wrote: »

One last thought. Is it best to take one month of the rate each time, so preparing for the pay off or transfer to the next card before the rate ends. So a 6 month to be treated as a 5 etc?

If you are planning on transferring the debt onto another card rather than pay off from stooze pot, then I would advise getting the application for the new card started 5-6 weeks before the end date of the current promotion. You don't want to end up paying interest while you await your new card to be issued.

Doing it this way, you do often lose a month or so of the promotion.

In calculations I tend to take one month off to allow for this and\or delays in actually getting issued with the card.