Putting Balance Transfer in High Interest account

Paddy678 · 21 January 2019 at 7:24PM

Hi there,
I don't think this is technically stoozing but I wonder if people can see a flaw with it?
I have a reasonably good credit score. Is it a stupid idea to take out an amount of money on an interest-free credit card. And put that money straight in a high interest account and lock it way until the interest free credit period ends.

THen just pay the credit card back and keep the interest. Obviously the interest would have to be more than the credit card transfer fee, but on a long credit card this would be quite easy i think.
Am i missing something?

pcman1985 · 21 January 2019 at 7:41PM

Firstly you would need a money transfer credit card, not a balance transfer credit card.
Money transfers transfers the balance of a credit card to your bank account.
Balance transfers transfers the balance from one credit card to another credit card.

And the answer to your question is yes provided that the interest received on the savings account is more than the cost of the Money Transfer AND you can pay the credit card off in FULL when the 0% period ends.

mrs_T · 21 January 2019 at 7:43PM

This is stoozing. Why not try to find a card that is fee free? You will have to pay the minimum monthly repayment during the interest free period. Good luck finding a high interest account at the moment but TSB classic and nationwide flexdirect are some suggestions.

Paddy678 · 22 January 2019 at 11:25AM

Great thank you, i will have a look at the different options!

Paddy678 · 22 January 2019 at 11:26AM

Thanks, Mrs T, I will have a look at those accounts and also see if I can find a no-fee transfer card. Thank you

PRAISETHESUN · 23 January 2019 at 9:55AM

Also keep in mind you'll need to keep some of the cash aside to meet the minimum monthly card repayments, but otherwise your plan is definitely doable if you can find a card with the right fees/rates.

nomorekids · 23 January 2019 at 10:26AM

Yep, you are correct, this was a "way of life for me" and the "first batch" kids through university to raise extra funds for them. Common to find interest rates 4-6pc at the time. Interest free overdrafts, credit cards, we did it all but the secret nowadays is, is it worth it?

planteria · 3 February 2019 at 1:17AM

the stoozing heyday is certainly behind us, with savings interest rates so low. but i still channel spending to generate cashback and have a 0% stoozepot generating 1.5%+.