Stoozing: Make Free Cash from Credit Cards article discussion

TheShape

ironagedave wrote: »

A) the other rates will only give you net and all offers are variable with interest rates consistently dropping and although ISAs are equally variable, they are less likely to get a hit should rates drop further, I prefer reliability.
12 months so it is affordable and I can do the same next financial year as well rather than risk getting behind on repayments every year because in 4 to 5 years time you will have overlapped 5 times a month on repayments. Doesn't mean I couldn't go for a 28 month one, just my intention is to clear it by the end of the financial year.

A) Depends on your tax status and how much PSA you have available but most ISAs are at significantly lower rates than high interest current accounts and regular savers (a number of which are fixed rate).
Affordable? If you've borrowed money to stooze you could keep enough of this available in instant access accounts to pay off the minimum payments.

If you've decided to stooze as a means to make money it seems strange to me to reduce your return by both using accounts that pay less interest and paying down a 0% debt more quickly than required.

JimmyTheWig

It's not a bad place to start.
As long as you are happy you know what you're doing and you aren't paying a balance transfer fee then there's no reason for this to lose money.

If it's a case of doing this or not stoozing at all, then do this.
If it's a case of doing this or understanding the whole thing a bit better to earn more per card then personally I'd do the latter.

YorkshireBoy

ironagedave wrote: »

A) the other rates will only give you net and all offers are variable with interest rates consistently dropping and although ISAs are equally variable, they are less likely to get a hit should rates drop further, I prefer reliability.
12 months so it is affordable and I can do the same next financial year as well rather than risk getting behind on repayments every year because in 4 to 5 years time you will have overlapped 5 times a month on repayments. Doesn't mean I couldn't go for a 28 month one, just my intention is to clear it by the end of the financial year.

A) I'd rather pay 20% or even 40% on a 5% return than no tax on 1%...any day of the week!

All offers are most certainly not variable.

What's your reasoning for ISAs being less likely to take an interest rate cut?

Makes no sense at all. I'd suggest holding off stoozing until you have a better grasp. If you do go ahead without further research/thought then good luck.

buyhighselllow

TheShape wrote: »

Where have you put the stoozed funds? If you've got £15k of stoozed funds in cash you could be paying the £225 from this if you can't pay it from income, or have you invested/otherwise tied-up the funds? Of course, if some of the spending was for larger purchases not budgeted for you may not have the full £15k but you should still have approx half of this from your 'deliberate' stooze.

As to the return, I put your numbers (£225 flat monthly payment for simplicity) into the calculator below. Your return at a savings rate of 3% should be in excess of £400 for the next 12 months.

http://stoozing.com/calculator/stoozcalc.php

Hi
Yes that makes sense, I have a couple of TSB regular savers coming to and end, 3 Nationwide accounts ( with 1 yr offer plus their regular saver ) with 7 months left to run on the latter..its a case of just rechurning the money through whatever is available, mainly regular savers. I've consolidated onto 2 cards now with 24 months to run on each..I can manage the monthly repayments now without effecting my stooze stash..I just have to see the repayments as a " regular saver" ..I'm effectively saving money in advance and getting interest on it for longer.

meantime

MallyGirl wrote: »

make sure you are putting a card in credit that is happy to be a mule - such as MBNA. otherwise you risk having the transfer bounced back but still costing you the fee (if there is one)

Nationwide told me about six months ago they'd pay a credit balance to a current a/c, but I've not yet tried it. Has anyone else used NW as a mule?

deejbee

I'm not sure if there is another more appropriate thread for this but I couldn't see one.

Anyway, Barclays are offering to transfer up to 10K to my bank account with 6 months interest free for a charge of 1.9%. It seems like a cheap loan but I can't see how it will affect my credit credit rating (which is excellent).

If I were to take the whole 10K which is basically the credit limit of the card when will it negatively affect my credit rating as soon as I take the offer up since my card has effectively been heavily used and won't be repaid in full for the 6 months the offer is on for (when I would repay in full)?
thx.

Z4K1R

deejbee wrote: »

I'm not sure if there is another more appropriate thread for this but I couldn't see one.

Anyway, Barclays are offering to transfer up to 10K to my bank account with 6 months interest free for a charge of 1.9%. It seems like a cheap loan but I can't see how it will affect my credit credit rating (which is excellent).

If I were to take the whole 10K which is basically the credit limit of the card when will it negatively affect my credit rating as soon as I take the offer up since my card has effectively been heavily used and won't be repaid in full for the 6 months the offer is on for (when I would repay in full)?
thx.

Answer to your question is Yes, it will definitely affect your credit score (most likely will update on credit report at the end of the month) It will effect your score quite a bit in fact, since your credit utilisation will be through the roof. I had 998 Credit score and then I did two money transfers totalling 15k and my score plummeted to 734, (dropping from an excellent score to almost a poor score). However I definitely don't regret doing it, my credit score will return to excellent, only a matter of time. Once it has returned I will do the same again. A credit score is useless if you don't spend it, time itself costs nothing to replace.

deejbee

I asked Barclaycard the question in secure messaging:

I am looking at the transfer to bank account offer at 1.9% but I do not see how it might effect my credit rating. For example if I were to take out the limit of £10K on my barclaycard it would show as heavy usage and not paid in full for 6 months (assuming I then paid it in full just before the 6 month period). Please can you forward full details of how it affects credit ratings.

Their reply:

Thank you for your message regarding the credit ratings.

I am pleased to inform you that if you use the card for cash transfer or balance transfer it won't affect your credit ratings.

The offer available for cash transfer is 0% until 01st January 2018 with one time handling fee of 1.9% and the maximum amount you can do the transfer is up to £9734.00.

If you want to avoid paying any interest on the 0% balance transfer, you'll need to pay the outstanding balance before the promotional offer end date.

We hope this information has been helpful.

So they are saying it would not affect my credit rating so I quite confused now.

YorkshireBoy

deejbee wrote: »

So they are saying it would not affect my credit rating so I quite confused now.

They're assuming your question relates to the impact on your credit rating of a money transfer, as opposed to a more typical balance transfer. The reason they said a money transfer wouldn't affect your credit rating (any more than a balance transfer) is that it's not marked as a cash withdrawal with the CRAs...so no-one other than Barclaycard and yourself know it was a 'cash' transaction.

However, your credit rating WILL be affected on two fronts:

1. The fact you now have £9,374 of debt, which you didn't have before, and

2. Your credit utilisation (especially on this card, and overall if you don't have many cards/high limits) will be higher than it was previously.

Is that more clear?

deejbee

Yes thanks very much. It makes sense the way you explained it. I'm not impressed by the way Barclays avoided the question about credit utilisation however. Still, it is a cheap loan.