Is it worth it? 6 months at 2.9%

fatboyonadiet

Amex have offered me 6 months BT at 2.9%, if I BT this and stick it into an interest account paying 5% how much will I make? They haven't said anything about a fee.

Thanks in advance....

Richie(UK)

Hi,

I'm a stoozing newbie myself but as I see it:

* A net return of 2.1% (this assumes that you are either using an offset mortgage or saving in an ISA - either way you don't want to be paying tax or your small margin will get even smaller!)

* The small margins mean that the question of fees will be very important - make sure you are clear on this point.

* The credit limit offered will be of vital importance. Too small and the fees may even exceed any return that you make. I did a very 'rough and ready' estimate with a £10,000 limit : roughly £100 interest. A £50 fee will obviously halve your profit. Also, keep in mind that this is for a whole 6 months - in practice you will lose some of that due to BT delays.

It follows, therefore, that if you only get a £5,000 limit and have a BT fee of £50 you could actually make a small loss.

HTH

Milarky

My first stooze was 2.9% for 6 months only savings rates at the time were 7% gross [5.6% net] so the margin was 2.7%. The smallest margin I've had was 0.6% - when a BT for 3.4% was held at 5% gross [4% net]

Personally, I would say don't stooze unless you make at least 1% [that's a margin of 2% over six months of course]. That would imply a 6% savings rate [4.8% net] as needed to justify doing this...

fatboyonadiet

My credit limit is £4k on this card and I've already filled my ISA for this tax year, so my profit will be quite small then, will have a think.