Cash back v 0% for 12 months

dbartlett

I might be being a bit thick, but can someone explain Martin's flowchart on credit cards, that says that if you do not pay interest on the credit card (ie pay it off in full each month) you should get a cashback card offering up to 5% for first three months then 1.5% thereafter, RATHER than going for 0% deal on purchases.

Why would you not get a 0% on purchases deal instead. The ammount you would normally pay off put into a high interest savings account at 6.5% thus earning 6.5% on all your purchases. Even after tax, this is going to work out better than 5% followed by 1.5% isn't it????

Then at the end of the 0% deal, simply make a transfer from your savings account to pay off the balance.

Has Martin missed a trick here, or am I missing something??

thumshie

This is all covered in Martins Stoozing guide..He's not missed a trick
http://www.moneysavingexpert.com/cards/stooze-cash-credit-cards

His flow chart is more general for people who do not want to change cards after 12 months etc, otherwise he could recommend the 5% card for 3months then change to the next highest cash back and continue!

However there are a few points to make on WHY it might not work out 'better' to use the slow stooze approach you mention:

1. You can't be guaranteed getting 6.5% on your savings-savings rate probably change more frequently than the 'cash back offers'..
2. Your Credit limit may not be sufficient to stooze for the Full 0% period.
3. You have to change card at then end of the period to continue 'earning' while the cashback may continue for years and years..

Using my calcuations of £500 a month you'd get £190(after tax, yes you could put in in an ISA) slow stooze compared to £142 with the credit card.

Bokkens

If you take your savings at the end of the 0% period and pay off the debt this transfer is free.
If you transfer from a new card to the old card and keep the savings in the savings account you will be charged a fee for this transfer and you could well loose all the profit that you have earn.
Which is why 0% cards with longer 0% periods and Egg money are favoured for fast stoozing and purchases for slow stoozing.
just be aware of charges and fees or you could be worse off than when you started.

dmackay41

Hi Folks,

Just received my Amex Platinum card and see in the T&Cs that they review and can increase your limit every three months, subject to prompt payments.
Does anyone know how much they would increase a credit limit by every three months?
Thanks in advance.

dmackay41

dmackay41 wrote: »

Hi Folks,

Just received my Amex Platinum card and see in the T&Cs that they review and can increase your limit every three months, subject to prompt payments.
Does anyone know how much they would increase a credit limit by every three months?
Thanks in advance.

Sorry folks, I put this on the wrong thread. I`ll move it...