Stoozing first time queries

ForumUser7

Hi, got a 0% purchases offer. Never ‘stoozed’ before, but considering doing so. My key concern is how this impacts my credit report. How long can you stooze for before it affects it? Is paying the minimum payment only really ok? Thanks 

Brie

If you can afford it all then it shouldn't really have an impact.  

The crucial bits - always have a DD in place to pay the minimum at least.  I suggest £1 more at least.  So if the initial minimum is £49 set the DD for £50.  This will mean that it won't be as obvious that you are stoozing to other creditors.

Never use that card for purchases.  Any purchases will be charged at the full rate from day 1 of the purchase.  Very expensive.

Have a plan in place to ensure the entire BT is paid off by the last day of the offer.  Don't count on being able to get another BT as that might not happen.  So it may be a case of paying enough each month to clear the whole thing.  Or putting money aside to do a big payment just before the end of the offer.  

ForumUser7

Brie said:

If you can afford it all then it shouldn't really have an impact.  

The crucial bits - always have a DD in place to pay the minimum at least.  I suggest £1 more at least.  So if the initial minimum is £49 set the DD for £50.  This will mean that it won't be as obvious that you are stoozing to other creditors.

Never use that card for purchases.  Any purchases will be charged at the full rate from day 1 of the purchase.  Very expensive.

Have a plan in place to ensure the entire BT is paid off by the last day of the offer.  Don't count on being able to get another BT as that might not happen.  So it may be a case of paying enough each month to clear the whole thing.  Or putting money aside to do a big payment just before the end of the offer.  

Thanks @brie.

Just to clarify, the offer I got was 0% on purchases as opposed to 0% on balance transfers. Does the third point still stand (i.e. purchases after accepted the offer) or would you mind explaining that bit again if it is different please? thank you

surreysaver

Brie said:

If you can afford it all then it shouldn't really have an impact.  

The crucial bits - always have a DD in place to pay the minimum at least.  I suggest £1 more at least.  So if the initial minimum is £49 set the DD for £50.  This will mean that it won't be as obvious that you are stoozing to other creditors.

Never use that card for purchases.  Any purchases will be charged at the full rate from day 1 of the purchase.  Very expensive.

Have a plan in place to ensure the entire BT is paid off by the last day of the offer.  Don't count on being able to get another BT as that might not happen.  So it may be a case of paying enough each month to clear the whole thing.  Or putting money aside to do a big payment just before the end of the offer.  

It's a purchases card. So the OP will be building up a balance from buying things.
I've been stoozing for about 25 years. Always only paid the minimum. Never had a problem, so don't see the point paying £1 more than the minimum. Promotional rates are marked as such on your credit file anyway (except for my M&S credit card which for some reason wasn't).

PRAISETHESUN

ForumUser7 said:

Hi, got a 0% purchases offer. Never ‘stoozed’ before, but considering doing so. My key concern is how this impacts my credit report. How long can you stooze for before it affects it? Is paying the minimum payment only really ok? Thanks 

Regardless of what you end up doing, make sure you actually put aside the money to pay the card off at the end of the promotional term. There's no guarantee you'll get another 0% offer, and it's very easy to see stooze money in the bank as savings that you are free to spend, forgetting that you need to pay it back someday.

Brie

If it's a 0% on purchases card then that will normally be for a certain period of time. 

So get the card and any purchases within the first 6 months have 0% interest for 18 months or similar.  So say you spend up the limit in the first 6 months and are always paying back the minimum by DD.  No problem.  But then in month 10 you use the card for something.  Interest will be charged on that purchase from the day of the purchase as you didn't clear you balance in full the previous month.  

And the reason I suggest paying just over the minimum is because it makes it easier to budget.  So if you just pay the minimum the DD will be, for instance, £49, then £48.50, then £47.98.....and so on.  If you set the DD to £50 instead of the minimum it's easy to know that you will always have £50 coming out of your account on that day each month.  It also shows that you are in more specific control of your banking and may make you seem less of a risk for whatever company next checks your credit history.  Might not be an issue for some people but for others is could make them look more stable and more of a good gamble for another card or deal in the future.  

ForumUser7

Thanks all. How long would the fact I carried the balance for several months appear on the credit report for please? Does balance and payment information (how much, min payment etc.) stay on for a year, or is it longer please? 

Jami74

Information on my CRA's stretch back years. However if it's a promotional rate and you are paying back minimum you'll still get a green tick (or however it shows). It does not count against you because you are not missing payments or paying interest. I paid my stooze pots off last January and got a mortgage in March.

Check carefully the terms of the card. Some cards, like MBNA, will only be 0% on purchases made in the first 60 days. These cards are good for making one or two big purchases to pay off over a period of time. Many other cards though will be interest free for the duration of the promotion. If I have a balance transfer card or purchase card that I only put one balance on with no further spending I tend to pay a set amount each month. If I'm using a purchase card and putting all monthly spending on then I set the direct debit to minimum because I don't know the exact amount I'll spend each month. If you pay less than minimum then that will be a mark against you and might end the promotional rate.

I think the 'pay more than minimum' thing is important if you are in debt, struggling to pay and paying interest. In my experience it doesn't seem to have made any difference whether I pay minimum or £1 over. In fact it seems that the more debt I accrue  on credit cards for stoozing the more offers and bigger limits I get offered. 

Altior

Stoozing is likely to be great for your credit report in the long run, assuming you don't make any serious mistakes.

Not for the slow stooze (purchases), but regular stoozing tends to go in waves. Initial blitz, and the credit report will be tanked at the beginning of the wave with regard to obtaining more credit. So don't mix it with any genuine credit applications, esp mortgage. 

As you build up a history of high unsecured debt and clearing it with no issues (hopefully), in the long run it's positive. 

It's actually scary sometimes how much unsecured debt you can obtain as you go along and build up a trustworthy record, as the lenders don't know the liability is yielding high interest in cash bonds, regular savers and the like. They assume you've spent the lot!

LL_USS

@ForumUser7 I am new to this too, and hope to learn a bit here on your thread.

I am waiting for a 0% interest purchase card from M&S, as what came top of the list when searching on MSE. The MSE states three golden rules there for 0% purchase cards:
a) Never miss the minimum monthly repayment, or you could lose the 0% deal.
b) Clear the card before the 0% ends, or the rate rockets to the higher APR.
c) To avoid hefty fees and interest, don't withdraw cash.

However, on the first page of the agreement from the card, it says two more uses
(b) To get cash or make a cash related payment. We'll tell you if there's a limit on the amount of cash you can withdraw each day.
(c) If they're available on your account, to send a balance transfer or money transfer.

It feels they should explain if cash withdrawal does not receive 0% interest. Anyway, I'll only use the card to make purchases.

I've heard from some other experienced stoozers that they pay a little bit over the minimum. Yet I still stick to the minimum at the moment, as I register to pay it automatically by direct debit (otherwise I'll need to calculate the minimum payment for each statement then try to set up the payment a bit higher than that - again, I have no experience of how this works so I'll see how it goes and for now choose the most simple method).

So in the agreement they call this 0% introductory rate for 24 months, and says:
The following annual interest rates will apply for the periods set out below:
• 0% on purchases for 24 months from account opening
• 0% on balance transfers made within 90 days of account opening for 12 months from the date of transfer
This means, I suppose, I can put all purchases on this card within this 24m period. I have no balance to transfer at the moment but if I do, I am not sure if I use it, it has some fees (I can see a bit further down the agreement) and also it's for 12 months rather than 24 months, so another complication there. For a first timer, I'll stick to the basics. Only purchases under the credit limit, no cash withdrawal, no balance transfer, no missing minimum payments and pay off a bit before the 24m expires.

For now I am still reading this 32 pages of the agreement and am still quite nervous. But let's see how it goes.

If you have more technical questions, you may want to ask @Organgrinder, he's been very helpful in another forum here regarding this method.

kempiejon

LL_USS said:

I've heard from some other experienced stoozers that they pay a little bit over the minimum. Yet I still stick to the minimum at the moment, as I register to pay it automatically by direct debit (otherwise I'll need to calculate the minimum payment for each statement then try to set up the payment a bit higher than that - again, I have no experience of how this works so I'll see how it goes and for now choose the most simple method).

Within your direct debit there are usually 3 amounts you can select to pay,
Total balance balance (not for you).
Minimum payment - what you have chosen
Another amount. You pick a monthly amount and the DD claims that - unless the minimum payment is higher when the minimum is claimed.

Your method of saving as you spend is know as slow stoozing, it'll take a while to build a large balance and your monthly repayment amount will vary as you increase the balance.
I balance transfer rather than the slow method and if for example I have £4k balance for 20 months 0%apr I might set to pay £200 per month to clear within the free interest period. It does reduce the total profit a bit because I could just pay the minimum which would be perhaps half that. With half a dozen cards and various expiry dates missing a bit of profit to keep the admin easier seems worth it.