Wannabe Stoozer

MrILikeMoney · 27 May 2018 at 4:11PM

Hi all,

So I have recently come across the whole premise of stoozing and after having a good read, I have applied for a purchase credit card on 0% for 26 months.

Obviously the way to use this card is to make purchases like normal but on the credit card, but i'm just weary at what I can purchase as I want to take it slowly and not lose my 0% interest period instantly. So I dare ask a potentially very stupid question....

I know paying for weekly food shops, fuel, clothes are obvious purchases, but when it comes to your utility bills, council tax, Itunes/Netflix/phone bill subscriptions, i get concerned it wont be classed as a purchase.

I really apologise if this is a question that makes you cringe at how obvious it might be, i guess I am just over-cautious. Many thanks to anyone who can shed a light for me. :j

Ben8282 · 27 May 2018 at 6:06PM

Assuming that the providers of these services actually accept credit cards, the payments will count as purchases. Even if for some reason they were not, you would not instantly loose your 0% rate; you would just be charged interest on the transaction that was not considered a purchase.
As you want to take it slowly, is it really necessary to transfer paying these things to the credit card? Perhaps best just to stick with your normal day to day spending as when the card is full up you would just have to change these things back to how they were previously being paid.
More to the point, what are you planning to do with the money that you are accumulating in your account in order to actually make any profit on this stooze? What is the credit limit on this card?

MrILikeMoney · 27 May 2018 at 6:43PM

Thank for clearing the purchase thing up, i guess i was just far to cautious to be honest.

I wouldn't be planning on flipping everything over to the credit card as like you said, i'd max it out in no time and then be stuck with normal cash flow. It was more of my limit will be £1,500 and if I only left it to the food shop it would only end up going up by about £200 a month. Although thinking about it, i'd still end up maxing out the card long before the end of the 0% period.

Would you recommend just taking it slowly and perhaps not maxing it out entirely, but leaving a 5-10% buffer before the max limit? But i'm currently trying to better my credit score as well so would it perhaps look better to making more than the monthly minimum repayments along the way?

My plan is to use the money that I would have spare by using the credit card and dump it into a First Direct Regular Savings Account giving me 5% return. Anything spare I might look back into P2P, more specifically Rate Setter as I already have an open account there.

Ben8282 · 27 May 2018 at 9:43PM

To be completely honest, I am not sure that stooizing is right for you at this time.
Firstly, you have been given a very low credit limit. Even if you were able to stooze the entire credit limit for 2 years (I am allowing a month either side to ensure the amount is repaid on time) you would make an absolute maximum of £150 over the 2 years.
This however will not happen for very practical reasons. Firstly, as the saver account only allows a maximum of £300 per-month to be deposited, it would take 5 months to build up the £1500 balance in the account. Based on £300 in month 1, £600 in month 2 etc then £1500 in month 5 0 12 this will earn you about £56 in the first year.
As for year 2, assuming the 5% fixed term savings account still exists, it will be the same thing all over again. Total possible profit therefore about £112 over the 2 years.
The fact that you have been given such a low credit limit and assuming you have no debt, this would indicate you are very new to credit and/or have a not very good credit history.
It would of course not be practical for you to use 100% of the credit limit. In addition, if this is your only credit card an almost 100% utilisation and (presumably) minimum payments only being made each month would seriously damage your ability to obtain further credit as it would appear to potential lenders that you are unable to repay even such a small balance.
Stoozing is for those with many credit cards and high credit limits. My own average credit limit over all cards (total credit limits divided by number of cards) is a 5 figure amount. Established stoozers on this forum have total credit limits far higher than I do I'm sure.
I really think you should consider postponing your stoozing ambitions for the moment and instead use and repay the card each month with a view to improving your overall ability to obtain credit and higher limits. Then think about starting stoozing.
Sorry if this is not what you wanted to hear.

MrILikeMoney · 27 May 2018 at 10:52PM

Please don't apologise, it's much better to have an honest and realistic opinion as opposed to an over enthusiastic where the expectations are over-hyped.

After your thoughts i'll be completely changing my approach. I could probably still deposit £300 a month through my income so i'll try to stick to that.

But on a credit card front it's going to be a lot better to focus purely on increasing my credit score to look more appealing to other potential lenders in the future. I'll more than likely take the approach of just using the card for the food shop and fuel and then paying it off each month and maybe in 6-12 months see where i'm at in terms of maybe being eligible for a larger credit/longer term card

muz3562 · 30 May 2018 at 10:38PM

MrILikeMoney wrote: »

Please don't apologise, it's much better to have an honest and realistic opinion as opposed to an over enthusiastic where the expectations are over-hyped.

After your thoughts i'll be completely changing my approach. I could probably still deposit £300 a month through my income so i'll try to stick to that.

But on a credit card front it's going to be a lot better to focus purely on increasing my credit score to look more appealing to other potential lenders in the future. I'll more than likely take the approach of just using the card for the food shop and fuel and then paying it off each month and maybe in 6-12 months see where i'm at in terms of maybe being eligible for a larger credit/longer term card

Id use it and pay it off every month for 6 months and see if there is any increase to the limit then .

MrILikeMoney · 31 May 2018 at 11:28AM

I think that's what i'm going to have to do, and hopefully then I can maybe consider being able to get a card with hopefully a higher limit

kidmugsy · 2 June 2018 at 12:25AM

MrILikeMoney wrote: »

when it comes to your utility bills, council tax, Itunes/Netflix/phone bill subscriptions

Have you considered opening a Santander 123 Lite current account?

Cashback on those bills!

Wannabe Stoozer

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