Is this “stoozing”?

mamabuddah

Barclay card are offering me a money transfer , 2.9% fee for 18 months 0%apr.

what if I take £10k (well within my limit) and put it in a good performing ISA as seen on MSE?

By my calculations, I should make some money and it would be easy to pay the £550 odds per month, or £500 and just pay another £1k before the end of the promo period.

am I looking at things too simplistically?…what pitfalls have I missed? I’m sure there are some.

thanks for any advice…or criticisms…all welcome.

PRAISETHESUN

That is stoozing in a nutshell - you take interest free/low interest money and put it into a savings account which pays more in interest than the interest charged by the lender, pocketing the difference. You need to make sure you factor in the transfer fee into your calculations, and also make sure some of the money is accessible to meet the monthly repayments for the card. You need to be diligent as missing even one payment could mean they pull the offer and you need to repay the entire balance

eskbanker

Yes, it's stoozing and no, you're not being too simplistic, if you definitely have access to a decent money transfer at 2.9% fee and 0% interest for 18 months.

surreysaver

2.9% over 18 months is equivalent to 1.93 a year, so as long as the AER (after tax - if the interest is taxable) is more than 2%, you'll be in profit (minus the interest lost by using part of the savings for the minimum payments).
You should explore flexible ISAs if you're going to use ISAs - you can put money in, take it out and put it back in again, which could be useful if paying off 0% credit cards and getting another 0% offer.
Just make sure the money borrowed is in an easy access account so you can pay the card off with no notice if you need to, especially if you're just starting out playing the game

grumpy_codger

mamabuddah said:

...

what if I take £10k (well within my limit) ...?

... it would be easy to pay the £550 odds per month, or £500 and just pay another £1k before the end of the promo period....

Why £550 or £500? For my Barclaycard the minimum payment is 2.25% and I don't think that yours is bigger. Set a DD for minimum payment and, if you wish, make £1 extra manual payments to avoid minimum payments recorded in your credit files (I don't bother).

And, as the interest rates are dropping, consider fixed-rate savings for 12 or 18 months.

My SS shows about £240 profit for 2.25% min payments and 4.2% ISA, but don't take my word for this.