Stoozing-Don't think I get it (Simply Spend)

Bella198421

So i just get a credit card (Already have one) and put all my spends on it, food etc and when i get the bill I just pay the min and I don't take any money out of my Bank Account allowing the money to build up and just take out the min for the credit card which will be a fiver or 2%. How long should I do this for? just for the interest free period or a month or so depending on what I spend (it has a £500 limit). Is there anyway this can go wrong?

Stargazer_Lily

You've got it pretty much right - you use your credit card to put all of your normal purchases on, rather than using your debit card. You then put the money that you would have spent if you had not used your credit card into an interest paying account and only pay off the minimum amount every month. You keep doing this until ou reach your credit limit or the end of your interest free period. If you reach your limit first you do not have to pay off the whole balance of the card - just keep making minimum payments until you either clear enough room to start using it again, your credit limit is increased or you reach the end of your interest free period.

At the end of your interest free period you use the money you put aside to clear the WHOLE balance of the credit card.

How can it go wrong?
1) For every penny you spend on the CREDIT card each month, you MUST put at least that much into the interest paying account. For stoozing to work best you have to be able to clear the balance on your card before the end of the interest free period.

2) You must NOT take out cash using your CREDIT card. You will get charged an extortionate rate of interest if you do which will completely wipe out any interest you earn on your "stoozed" money

3) Make sure that the account you put the money into does not restrict you getting the money out of at the end of it. You must pay off the whole balance by the end of the interest free period and if you can't you will then end up paying a high rate of interest on the outstanding balance which will wipe out your savings.

Lil

YorkshireBoy

You'll find a full guide to slow-stoozing on the stoozing site at:

http://www.stoozing.com/g_sslow.htm


Martin also has an article at:

http://www.moneysavingexpert.com/cards/stooze-cash-credit-cards

Bella198421

I think I'm just scared of using my credit card as I've never had one before

Bella198421

I've got a cash ISA, so I could put any money in that cos I get good interest with that.

Bella198421

I think my credit card only has 59 free days interest , though I did think it was 12mth/15mths.

moominyak

Hi Bella,

The object is to take out a credit card with a promotional 0% rate for purchases (for as long a period as you can find!), spend as normal on the card (instead of using your cash/debit card), then put what you have spent each month into a savings account, only paying back the minimum required to the 0% credit card (usually 2 or 3%).

You will then earn some interest on what is sitting in your savings a/c until the 0% period on the credit card ends (make sure you are certain of the exact date you need to get it paid off by, one day late and the results will be disastrous).

The savings a/c needs to be one where you can deposit and withdraw money with no fuss, Martin recommends the ICICI one, or perhaps to start off you could open one in the same bank as your current account and then use online banking for instant transfers between the two accounts (so instead of paying your credit card bill in full, you pay the minimum payment due and then put the rest of what you have spent in the month into the savings a/c).

You only have a £500 limit on your credit card? If that's so, it may be because if it is your first card there is no real 'credit history' on your file yet. If your limit is only £500 then it won't take you long to reach it.

IMHO I would use the credit card instead of your debit card as above, but repay it in full for a few months to build up a credit history (and to ensure you can keep using the card month after month!).

Once you have a bit of good history behind you, you can then apply for another card with a decent 0% period and (hopefully) a higher credit limit, and start slow-stoozing properly

Hope I'm not teaching you to suck eggs, but you seem to be unsure of where to go next with this, so I hth a little bit

Good luck
Moominyak

moneysavingwannabe

Hi,

I'm new to this too!

Good luck bella!

Just a quick question ..the end date for my introductory 0% is 1/1/2009
Do I have to pay the balance by then or a certain time before then??