Stoozing: Make Free Cash from Credit Cards article discussion

mike_wall15

I was linked to this post from the money saving article in this week's email.
I've had a look into the possibility of stoozing but I don't think it's a rewarding as it first looks.

Firstly, as mentioned, the main problem with Martin's calculator is that it doesn't take into account the falling balance (due to paying the 3% minimum payment each month). You'll be earning interest on a falling balance each month.

The MBNA and Virgin offers highlighted incur a 3% fee. This takes out a big chunk of your profit.

The quoted interest rates at the bank accounts are gross and not net. Unless you earn very little (in which case you won't be able to get a big enough credit limit in the first place) or have an ISA to use, the amount of interest you get after tax won't be so huge.

We also have to expect the interest rates to fall after the recent 0.25% base reduction. If there are more falls then that'll eat more into your profit.

I roughly calculated by using a savings account I already have (5.8% gross) that a £3k balance would only make me about £30 in a year.

I would push people towards a cashback card (capital one currently have one) or a 0% purchases card. The great thing about the 0% purchases card is that you don't have the 3% fee. I'm sure people easily spend £250 a month, and if instead of paying this off you invested into a bank account, then I believe you'd make £60 in the year after a £3k spend.

Another problem with stoozing is that you are applying for credit and will be unsure of what limit you will be given by the company. You'll need a decent amount to make any money.

And finally, do people know if this is classed as a balance transfer or a cash advance? Usually a cash advance would only be for half of your credit limit, so suddenly you can't stooze as much as you wish. It depends on how they are classing it. Somebody who has applied for MBNA or Virgin should be able to tell me.

Cheers

Mike

YorkshireBoy

mike_wall15 wrote: »

I've had a look into the possibility of stoozing but I don't think it's a rewarding as it first looks.

It's certainly harder than it was, but I still make/save between £1,000 - £2,000 per annum at it (which is the equivalent of a [up to] £3,000 pay rise so not to be sniffed at).

Firstly, as mentioned, the main problem with Martin's calculator is that it doesn't take into account the falling balance (due to paying the 3% minimum payment each month).

This calculator does, and is very accurate: http://www.stoozing.com/calc.htm

The MBNA and Virgin offers highlighted incur a 3% fee. This takes out a big chunk of your profit.

But sometimes only once! MBNA/Virgin are very good with (fee-free) repeat offers. I've personally had 9 month fee-free offers which have made me well over £600 a time. I've also had 4 x LTSB 6 month fee-free repeat offers which have netted me £400 each time. It's almost worth getting the card, using it for purchases for 3 months, and then waiting for the end of the 0% on BT period before asking for a 'deal'!

The quoted interest rates at the bank accounts are gross and not net. Unless you earn very little (in which case you won't be able to get a big enough credit limit in the first place) or have an ISA to use, the amount of interest you get after tax won't be so huge.

Unless, of course, you have an offset mortgage or a non tax paying spouse, or use 3/6 month bonds at 6.8%, or drip feed regular savers at 7-8%+.

We also have to expect the interest rates to fall after the recent 0.25% base reduction. If there are more falls then that'll eat more into your profit.

Agreed, unless again, you have an offset mortgage or fixed rate savings.

And finally, do people know if this is classed as a balance transfer or a cash advance?

You'll have to read the small print to find that out...but in the case of MBNA/Virgin, it's definitely a BT (but for how much longer?).

mike_wall15

Some very good points above, and thank you for the answer with regards Cash Advance/BT :beer:

You are certainly making the most of your stoozing in a big way, maximising every avenue open to you to decrease all areas that are eating into your profit.
You are the ideal stoozer, but I think it's worth noting for somebody starting out that they are unlikely to achieve such high profits as you are.

Clariman

mike_wall15 wrote: »

Some very good points above, and thank you for the answer with regards Cash Advance/BT :beer:

You are certainly making the most of your stoozing in a big way, maximising every avenue open to you to decrease all areas that are eating into your profit.
You are the ideal stoozer, but I think it's worth noting for somebody starting out that they are unlikely to achieve such high profits as you are.

I seem to be contradicting you on a few posts just now (nothing personal ), but there is plenty of money to be made by newcomers if they are prepated to make the effort, search out the best deals and make the most of the deals they currently have. You have to turn it into a part time hobby but it is fun and profitable.

Clariman

YorkshireBoy

Clariman wrote: »

...there is plenty of money to be made by newcomers if they are prepated to make the effort...

Classic example on the stoozing site yesterday...

http://www.stoozing.com/cgi-bin/forum/YaBB.pl?num=1197392436/0#0

'Caveman' is a newcomer to stoozing. He was given a £2.5K limit on NatWest, appealed with supporting information, and it was increased to £10K. Now that's a result!

MarkinBlackpool_2

My first post on stoozing!
Was just wandering about a couple of things.
If I get a £5k limit CC and transfer it to a bank account to earn interest or in my preferred case buy Premium Bonds, what would be the minimum monthly repayment?
Whatever the repayments are, isn't this a drain on what should be disposable income for the sake of £150 interest a year?
Ie £50 repayment a month less to have a pint with?

YorkshireBoy

MarkinBlackpool wrote: »

If I get a £5k limit CC and transfer it to a bank account to earn interest or in my preferred case buy Premium Bonds,

A £5K SBT will cost you £149 in fees. That's your 'stake' money for your gamble on 13 Premuim Bond draws. Still interested?

what would be the minimum monthly repayment?

Answered in the T&C's, and on many threads on here lately, but in essence around 3% for the first and £25 for subsequent payments.

Whatever the repayments are, isn't this a drain on what should be disposable income for the sake of £150 interest a year?

Yes. However, most people wouldn't gamble on PB's with their stooz pots...they'd save the money in an instant access savings account or offset their mortgage with it.

strawberryberry

Just been given the bad news my car is not worth fixing so il have to get a newish one fairly quick so trying to sort out finances i really begrudge paying interest on loans and have always saved up in the past but this has come as a shock.
Thought id start with a cash back card and then do a 0% balance transfer nil fee then stoozing after a few months. Sounds ok but cant seem to get nil% and nil fee. Peterborough b/s you have to be a member and nearest branch is miles away reading small print they want to see passport etc in person so that seems out.
Anyone seen any other offers ? I know you havent got a crystal ball but on past experience is it more likley that there will be an offer after xmas / If i apply for cash back now but dont spend on it until i get a car that should give me enough time to get the free balance transfer card.
I have already applied for a 12 month 0% interest free card with mbna yesterday.

dkmatkinson

Anyone know what to do once you've got the credit card, and the cheques as it looks like I'm going to get charged if I pay the money into another account? thanks!

YorkshireBoy

dkmatkinson wrote: »

Anyone know what to do once you've got the credit card, and the cheques as it looks like I'm going to get charged if I pay the money into another account? thanks!

According to the T&C's (and the summary box if you find T&C's 'heavy'), the cheques are 0% for 15 months (with a fee).

However, why bother with cheques? Simply ask Virgin to BT your (ficticious ) current account overdraft to the card. They'll then send the cash to your current account.

This particular card/offer has been discussed at length on this board. I suggest you read the other posts before continuing, because you wouldn't want to come unstuck as the penalties for getting it wrong are substantial.

Good luck.