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Stoozing: Make Free Cash from Credit Cards article discussion

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  • Kendall80
    Kendall80 Posts: 965 Forumite
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    adindas wrote: »
    BOS is currently offering two creditcards that might be suitable for stoozing
    http://www.bankofscotland.co.uk/creditcards/landing/ppc-multicard/?WT.mc_id=43700009618985321&WT.srch=1&gclid=CKmH8-aoiM4CFecV0wodWpALbQ

    1) Low fee balance transfer offer 0% for up to 32 months from account opening on balance transfers within the first 90 days.
    0% for 12 months from account opening on purchases.
    1.13 Fee (An initial 3% fee applies, we'll then refund 1.87% on balances transferred within the first 90 days

    2) 0% balance transfer fee offer but shorter period
    0% for up to 20 months from account opening on balance transfers within the first 90 days.
    0% for 6 months from account opening on purchases.
    0% fee on balances transferred within the first 90 days.

    Which one produces a better Return, if you could provide a sample of rough calculation to show that one is better then another it will be great.

    Is there any online calculator for this short of comparison ??

    Thanks


    Well the one has a fee the other does not. Seems pretty conclusive to me in terms of balance transfers. Especially if you can transfer the balance to another 0% no fee card upon expiry. Exhaust the zero fee cards first then move to low fee options if you have to. 1.13% is very low annualised on a 32month BT card (but its not zero).
  • adindas
    adindas Posts: 6,856 Forumite
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    edited 24 July 2016 at 12:28PM
    Kendall80 wrote: »
    Well the one has a fee the other does not. Seems pretty conclusive to me in terms of balance transfers. Especially if you can transfer the balance to another 0% no fee card upon expiry. Exhaust the zero fee cards first then move to low fee options if you have to. 1.13% is very low annualised on a 32month BT card (but its not zero).

    Indeed, after thinking it over it seems that it is not a rational comparison. This is not about comparing interest and return but about taking a chance/uncertainty. I could imagine there is no such calculator for this specific purpose available. where uncertainty exist

    0% for up to 20 months is definitely a clear winner just for up to 20 months but what happen thereafter is an uncertainty...

    IF I COULD transfer the rest of the balance again to 0% BT after 20 months has elapsed then 0% for up to 20 months is a clear winner,

    BUT there is no guarantee for such thing ...

    So this is about taking a chance / risk as it is highly likely the boom of stoozing is already over at that time ... And there is no more chance to transfer it to another 0% on BT as it might be that 0% card will not be available in the market by that time.
  • eskbanker
    eskbanker Posts: 37,354 Forumite
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    adindas wrote: »
    So this is about taking a chance / risk as it is highly likely the boom of stoozing is already over at that time ... And there is no more chance to transfer it to another 0% on BT as it might be that 0% card will not be available in the market by that time.
    What makes you think that the stoozing 'boom' will be over within the next year or two? This stoozing board was created in 2005 in recognition of the amount of stoozing activity already underway back then (I was stoozing in 2004 myself) so it's not exactly a passing fad....
  • adindas
    adindas Posts: 6,856 Forumite
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    edited 25 July 2016 at 6:34PM
    eskbanker wrote: »
    What makes you think that the stoozing 'boom' will be over within the next year or two? This stoozing board was created in 2005 in recognition of the amount of stoozing activity already underway back then (I was stoozing in 2004 myself) so it's not exactly a passing fad....

    Sorry I have not been clear on my previous post. The stoozing boom where bansk start offering 0% on BT since last year and like any other finance there is a cycle of a bust where the stoozing is not worthy. It might be bouncing again later when the cycle is booming again ...

    It is a reasonable assumption that in two years time, it is highly likely the banks will stop offering 0% interest on BT and the saving interest also fall at that time making it stoozing hardly worth the effort.

    If the interest in saving and bank account is 2% (say) and BT fee is 2.0% (say for twelve month) who is going to do stoozing. The boom might start again later after the period of bust ...
  • eskbanker
    eskbanker Posts: 37,354 Forumite
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    adindas wrote: »
    It is a reasonable assumption that in two years time, it is highly likely the banks will stop offering 0% interest on BT
    I disagree - my point was that 0% interest BT offers have been around for at least 12 years so on what basis do you believe that's about to stop?

    I agree that there are more 0% fee offers around in recent times but the 0% interest ones have been available for ages....
  • adindas
    adindas Posts: 6,856 Forumite
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    edited 26 July 2016 at 10:49AM
    eskbanker wrote: »
    I disagree - my point was that 0% interest BT offers have been around for at least 12 years so on what basis do you believe that's about to stop?

    I agree that there are more 0% fee offers around in recent times but the 0% interest ones have been available for ages....

    I am talking about the circumstance where BT is used for stoozing, e,g for people who make money using the reasonable margin available between the (FEE+ interest) from CC and (the saving/current account interest + incentive) available on the market. You could recognize it my previous post and query. It takes a novice to ever separate between the fee & Interest when doing a stoozing ...

    It takes highly irrational people to ever think that the bank will stop offering BT in general circumstance. It is the product where they could make a lot of money out of it from fee, default, interest, late payment, etc. But they definitely do not make money from stoozers who know what they are doing in this particular circumstances ........
  • JimmyTheWig
    JimmyTheWig Posts: 12,199 Forumite
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    eskbanker wrote: »
    I disagree - my point was that 0% interest BT offers have been around for at least 12 years so on what basis do you believe that's about to stop?

    I agree that there are more 0% fee offers around in recent times but the 0% interest ones have been available for ages....
    There were a good few years, post credit crunch, where Stoozing opportunities were very limited.
  • eskbanker
    eskbanker Posts: 37,354 Forumite
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    I wasn't taking issue with your general theme that stoozing may become less attractive in future due to the overall financial comparison with saving (although wouldn't necessarily agree with your perception that this is "highly likely"), but was simply challenging your specific assumption about 0% interest ("It is a reasonable assumption that in two years time, it is highly likely the banks will stop offering 0% interest on BT") as you haven't offered any support for this assertion.
  • JimmyTheWig
    JimmyTheWig Posts: 12,199 Forumite
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    adindas wrote: »
    1) Low fee balance transfer offer 0% for up to 32 months from account opening on balance transfers within the first 90 days.
    0% for 12 months from account opening on purchases.
    1.13 Fee (An initial 3% fee applies, we'll then refund 1.87% on balances transferred within the first 90 days

    2) 0% balance transfer fee offer but shorter period
    0% for up to 20 months from account opening on balance transfers within the first 90 days.
    0% for 6 months from account opening on purchases.
    0% fee on balances transferred within the first 90 days.
    So you're getting an extra 12 months for 1.13% fee.
    Note that the fee will be payable on the full balance transfered while after 20 months the minimum payments will have reduced the balance significantly. With a 1% minimum payment, your average balance for those final 12 months will be 77% of what you originally transfered. Which means the fee will be the equivalent of 1.47%.
    Do you think you will be able to make more than 1.47% on your money in a couple of years time?
  • adindas
    adindas Posts: 6,856 Forumite
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    edited 26 July 2016 at 11:19AM
    So you're getting an extra 12 months for 1.13% fee.
    Note that the fee will be payable on the full balance transfered while after 20 months the minimum payments will have reduced the balance significantly. With a 1% minimum payment, your average balance for those final 12 months will be 77% of what you originally transfered. Which means the fee will be the equivalent of 1.47%.
    Do you think you will be able to make more than 1.47% on your money in a couple of years time?

    JimmyTheWig. That is the point, after thinking it over, I prefer taking a chance finding a better deal after 20m elapse (if any exist). If not, no problem at least I have made little profit from 20months stoozing anyway.

    The possible margin on interest rate between saving interest available on the market and this 1.47% (or 1.13%) is too small to be applied to the rest of the balance after 20months.
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