The valley of death - seek advice on 0% spending cards stoozing, offers drying up, what to do next?

madbilly

Hi all,

I started stoozing just over a year ago after we moved house and got an offset mortgage. I've got to the point where my available credit on all cards is ~85% of my income, and my utilisation ratio is ~50%, all of which is on 0% spending cards for which the 0% periods start to expire this year. The remainder of my unused credit is with standard credit cards, of which Amex has the biggest credit limit (they're very happy for me to have a colossal credit limit, but I don't use it, which is keeping my utilisation ratio lower than it otherwise would be).

Each time I've got a new 0% spending card we've maxed it out and paid the monthly minimum, putting what we would have paid into our offset savings account. After the minimum payment is taken, I start using that card again to max out the credit limit, and so on month after month, card after card. So far this approach has worked well and we're making noticeable reductions in our mortgage term. However, things are drying up - each time I got a new card the credit limit was lower, and recently my so-called credit score has gone down into "fair". Recently (depending on the eligibility calculator) I've had no 100% pre-approved offers, or only ones with low credit limits or with "credit builder" cards with no 0% spending period. So far I've been avoiding 0% balance transfer cards, because I still had many months left on the 0% spending cards, however I'm wondering if this is the way to go now.

So I'm looking for advice from people who's been through this valley of death and worked out how to come out the other side. 

Do you continue to max out the 0% spending cards, keeping them topped up, or do you aim for a lower utilisation ratio?

Do you wait until the last minute to look for 0% balance transfer cards, or gradually move debt over from the 0% spending cards to the 0% balance transfer cards? 

Do you take advantage of every 0% spending card offer you see, when you need it, or are you selective? Are some of the cards better than others for keeping future offers coming? Should I avoid cards from relatively unknown providers? E.g. I've got 100% pre-approved offers from Asda, Jaja and Vanquish at the moment.

Do any of you have available credit more than your annual income, and how did you manage it without lying on your application forms?!  

Is there benefit in making significant use of non-0% cards, just to show more significant amounts being paid off every month?

Do you have multiple credit cards from the same issuer? I've already got a 0% spending card with Natwest, and one of the eligibility calculators has said I'm pre-approved for another one, but I'm not sure if I should use it.

Why would anyone go for a 0% balance transfer card with a fee on the balance transfer, rather than a shorter one with no fee on the balance transfer? Apart from less admin, what's the benefit of the longer one?

Okay, that's a bit of a brain-dump of questions, and I haven't searched for answers to all of them - I'll go and do that now. However the main point is that I think the honeymoon period is over now, and now I need to properly think about the best next steps.

Cheers

WYSPECIAL

No fee is always going to be better than paying a fee if you can get it followed by the lowest fee with the longest time period. Work out the annual equivalent for any fees and you can choose the best value ones.

When the balance is cleared on one of your cards you may find they offer you another balance or cash transfer offer quite quickly, albeit with a fee. Some of these are tempting some are not. For example one of my cards that I cleared about six months ago when the 0% ended just offered a balance transfer for 17 months for a fee of 2.9% just as another card was coming to an end and needed repaying. As I'm getting more than that on the saved money I rolled it over.

You can't stooze as quickly this way as you can with new offers that have zero transfer fees but at the same time you don't have to keep applying for new cards.

Some cards seem to come up with regular offers that are worth taking when one of your cards needs repaying. If they make you an offer that expires at the end of one month they tend to keep repeating it, or make a better offer, as it expires if you don't take it up. They seem to get more generous around Christmas time each year.

MBNA, Natwest and BoS seem to make regular offers. Barclaycard used to but haven't for me for a while but others on here seem to get offers from them so could be I don't meet their profile at the moment. 

Several lenders seem to allow multiple cards but you won't be able to transfer balances between them.

Personally I never bother looking at utilisation ratio, % of income etc but I don't have a mortgage so don't need to worry about fixed rates ending etc.

madbilly

Hi @WYSPECIA,

Thanks for your reply, there are some good nuggets in there.

I've got the impression that somehow one should consider the longer 0% balance transfer period even though there is a fee from the MSE weekly emails which always focus on these, however perhaps they focus on those cards for debt management reasons rather than stoozing. My gut feeling was always to take the no fee card, when I actually do.

I'll certainly keep my eye out for offers from the providers of my current cards.

My reason for mentioning utilisation ratio and % of income was because I was wondering why I'm becoming eligible for fewer and fewer cards over the past few months, and I could only think it's because both my total available credit and my total debt are going up, and I thought that those factors were considered important but perhaps not.

Cheers

Emily_Joy

Do you have a plan for paying the cards that expire this year in full?

madbilly

Hi @Emily_Joy,

Yes, I do, thanks for checking.

Cheers

Emily_Joy

madbilly said:

Hi @Emily_Joy,

Yes, I do, thanks for checking.

Cheers

Repay, close down to reduce credit available, wait 6 months. New offers will appear.

mta999

Should you close them down to reduce credit available or leave them open to decrease the usage ratio

madbilly

Emily_Joy said:

Repay, close down to reduce credit available, wait 6 months. New offers will appear.

Interesting @Emily_Joy !  Full  repayment  of  all cards?  partial  repayment? 

kempiejon

madbilly said:

Hi all,

I started stoozing just over a year ago after we moved house and got an offset mortgage. 

Do you continue to max out the 0% spending cards, keeping them topped up, or do you aim for a lower utilisation ratio?

Do you wait until the last minute to look for 0% balance transfer cards, or gradually move debt over from the 0% spending cards to the 0% balance transfer cards? 

Do any of you have available credit more than your annual income, and how did you manage it without lying on your application forms?!  

Why would anyone go for a 0% balance transfer card with a fee on the balance transfer, rather than a shorter one with no fee on the balance transfer? Apart from less admin, what's the benefit of the longer one?

I mostly just balance transfer via a mule card to savings accounts so work the stooze differently to that system so no topping up. I don't care about utilisation rates. I do try to group applications together and try and leave a good gap between request for new cards.

What interest rate is your offset mortgage? If you've been slow stoozing building a good balance into your offset then if the balance transfer fee costs, over the period, works out less than the mortgage rate it might be worth it to clear those spending cards down.

I do look for new transfer options in the last few months of current deals. I'm looking at a swap from what was Sainsbury's - now NatWest - via MBNA mule for RBS. 21 months 2.9% fee.

I've been collecting cards for a long time and have over my income in available credit limit. Keep the cards for decades collecting repeat deals and the limits increment up

born_again

mta999 said:

Should you close them down to reduce credit available or leave them open to decrease the usage ratio

Forget about such things. More CRA speaking rubbish.

Jami74

madbilly said:

Hi all,

I started stoozing just over a year ago after we moved house and got an offset mortgage. I've got to the point where my available credit on all cards is ~85% of my income, and my utilisation ratio is ~50%, all of which is on 0% spending cards for which the 0% periods start to expire this year. The remainder of my unused credit is with standard credit cards, of which Amex has the biggest credit limit (they're very happy for me to have a colossal credit limit, but I don't use it, which is keeping my utilisation ratio lower than it otherwise would be).

Each time I've got a new 0% spending card we've maxed it out and paid the monthly minimum, putting what we would have paid into our offset savings account. After the minimum payment is taken, I start using that card again to max out the credit limit, and so on month after month, card after card. So far this approach has worked well and we're making noticeable reductions in our mortgage term. However, things are drying up - each time I got a new card the credit limit was lower, and recently my so-called credit score has gone down into "fair". Recently (depending on the eligibility calculator) I've had no 100% pre-approved offers, or only ones with low credit limits or with "credit builder" cards with no 0% spending period. So far I've been avoiding 0% balance transfer cards, because I still had many months left on the 0% spending cards, however I'm wondering if this is the way to go now.

So I'm looking for advice from people who's been through this valley of death and worked out how to come out the other side. 

Do you continue to max out the 0% spending cards, keeping them topped up, or do you aim for a lower utilisation ratio?

Do you wait until the last minute to look for 0% balance transfer cards, or gradually move debt over from the 0% spending cards to the 0% balance transfer cards? 

Do you take advantage of every 0% spending card offer you see, when you need it, or are you selective? Are some of the cards better than others for keeping future offers coming? Should I avoid cards from relatively unknown providers? E.g. I've got 100% pre-approved offers from Asda, Jaja and Vanquish at the moment.

Do any of you have available credit more than your annual income, and how did you manage it without lying on your application forms?!  

Is there benefit in making significant use of non-0% cards, just to show more significant amounts being paid off every month?

Do you have multiple credit cards from the same issuer? I've already got a 0% spending card with Natwest, and one of the eligibility calculators has said I'm pre-approved for another one, but I'm not sure if I should use it.

Why would anyone go for a 0% balance transfer card with a fee on the balance transfer, rather than a shorter one with no fee on the balance transfer? Apart from less admin, what's the benefit of the longer one?

Okay, that's a bit of a brain-dump of questions, and I haven't searched for answers to all of them - I'll go and do that now. However the main point is that I think the honeymoon period is over now, and now I need to properly think about the best next steps.

Cheers

I'm not using spending cards at the moment simply because I find it easier budgeting if I pay off spending in full every month. I keep my stoozing separate. So my answers might not be all relevant. My stoozing cards are all balance transfer cards with transfers done as soon as they're open and then no more transactions so their balances go down each month. I'm looking to maintain my debt/stooze pot rather than increase it as I think I'm probably at about the limit of what I can borrow.

I start looking for new balance transfer cards about a month in advance of promotion end dates and aim to balance transfer about a week before.

Because I only use fee free balance transfer cards they mostly have shorter promotional periods so I don't transfer out early.

I don't care who the provider is if they meet my requirements (useful limit, 0% interest and 0% fee).

I don't have larger limit than my gross annual income but have come close. I've recently closed three cards that I wasn't using and which hadn't offered me any deals in a long time. 

I nearly always have 3 cards across NatWest/RBS. As soon as the promotion ends on one I pay it off, wait a month and then reopen a new one. They do a 12 month 0%, 0% balance transfer card and give me limits between £8,000 and £10,500. I think I've previously had two cards with Lloyds at the same time.

I would choose fee free first. I think paying a fee for a longer card helps people who have genuine debt that they can't pay off rather than stoozers.