Frequently asked Questions

How much money could I make from Stoozing?

Between £400 and £2500 per year would be typical, but more is possible. It depends on how much money you can borrow from credit cards (CC) and what interest rate is being paid on your savings. e.g. if you borrow £30,000 from Credit cards (CC's) and save that in an account for one year that pays 4.7% gross, you will earn £1,410 before tax. For a normal rate taxpayer this would be around £1,100 after tax and £850 for a higher rate taxpayer. Use the stooz calculator to try your own figures.

Can anyone make money from Stoozing?

No, I am afraid not. To benefit from Stoozing you have to be in a position where you do not need to borrow the money and you also need a great attention to detail. However you may benefit from low rate credit cards to reduce your interest by becoming a Rate Tart. For other credit card tips see MakeSenseofCards.com

Are there any risks in Stoozing?

Yes there are. Please see our Stoozing Risks section for more details.

Is it legal?

Yes. You are simply taking advantage of introductory offers made by the credit card companies.

But is it moral?

The question of morality is down to personal judgment. Some people feel that taking advantage of such an introductory offer without intending to be a long term customer is immoral. Others see this as perfectly legitimate. Yet others believe that making money from credit card companies has a certain poetic justice to it. Make your own judgment.

Will Stoozing affect my mortgage application?

Yes, it probably will affect your mortgage application but will depend on the lender. The more money you borrow, the more cautious your mortgage lender will be. They certainly will see how much money you have borrowed on credit cards and it will affect how much they would lend you. You should consider suspending your Stoozing at least 6 months before making a mortgage application i.e. to pay off all your Stooz cards and close them. Some Stoozers have had initial problems when applying for a mortgage, but have resolved it by being totally honest with the lender, describing their stoozing activities and providing evidence that their Stooz Pot covers their credit card borrowing's. However, the risks are still there. Its also worth noting a recent mortgage application will damage your credit rating for up to 6 months after, so stoozing is not possible during this time.

What do I need to look for in a Stoozing card?

First and foremost, you need to find a card which offers an introductory 0% on Balance Transfers. This allows you to move the money somewhere else so that you can earn interest on it. The longer the 0% introductory period the better, because it gives you more time until you have to start thinking about the next card and making another application and balance transfer. You should always try to have at least one card that provides a route to make payments into a bank account. Egg and MBNA cards can do this, but check the credit card tables for updates.

You also need to understand whether there is a fee for Balance Transfers and what the nature of that fee is. Since May 2005, most lenders now charge a fee for balance transfers, but not all do. For a list of ones that still do Balance Transfers without charge, please refer to our No Fee Cards section on the 0% Credit Cards page.

A typical Balance Transfer (BT) fee is 2% of the BT, which means a £200 fee for a BT of £10,000. Is this worth it? With a 6 month 0% introductory period for BT's and you saved the money in a savings account of 5% per annum, then you would earn less than that £200 fee in interest after tax. So no. If, however, the introductory period was 12 months, then your interest after tax would be about £390 (based on a lower rate tax payer)

In general you are not going to make much money out of a card that charges a BT fee unless the fee is capped. Some cards have a maximum BT fee of £50 which still can be prohibitive for small balance transfers but is fine for larger ones. Taking our example of a £10,000 BT, with a £50 capped fee, would give earnings over 6 months of about £145 after tax for a lower rate tax payer (£195 after tax - £50 fee).
N.B. It is crucial that you know whether your card offers 0% on BTs, Purchases or both, because you need to treat them differently.

How do I choose a good savings account for my Stooz money?

You need an instant access savings account with a high rate of interest and one that you can operate simply e.g. online or over the phone. Take a look at our Stooz Pot Savings table for some suitable accounts.

Can I Stooz to offset 100% of my mortgage?

Yes you can, but payments are still required to reduce the debt. In addition, when you have Stoozed money over 100% of your mortgage then you need to divert any additional Stoozing amounts to normal savings accounts, as most offset accounts will not offer interest back on the amounts over the 100% level.

Where can I find out about Offset Mortgages?

Providers can be found at the websites listed in our offset mortgage table

Can I make the occasional purchase on my Stoozing cards?

Yes and No. If your card is a 0% on Balance Transfers with a normal rate for purchases, do not use it for purchases. When you make your minimum monthly payments the credit card company allocates that payment against your lowest rate debt i.e. they will reduce the 0% Balance Transfer amount, not your purchase amount. This means that you will be charged interest on your purchase every month. You have no way of avoiding interest for the rest of the introductory period unless you pay off the full balance and start again.

However, if your card offers 0% for Balance Transfers and 0% for Purchases then you can make purchases. Watch out for another little catch. Quite often credit card companies make the 0% period shorter for purchases than they do for Balance Transfers so they could still catch you out and get you to pay interest. Compare purchase and BT rates on our tables.

How do I get the money from the credit card into my bank account?

As stated in the guide, you need a credit card that can pay directly into a bank account. There are not very many cards around that allow this, so the ones that do are the Stoozer's prize possessions. They are commonly known as Super Balance Transfer cards or SBT These cards make the payment in one of two ways. They either allow a Balance Transfer from a bank account or they allow you to write a cheque.

Before making such a payment for the first time, you must check that you are not going to be charged interest or a fee for the balance transfer or cheque. Balance Transfers are sometimes free during the introductory period, but credit card cheques normally attract a charge (either interest or a truncation fee), so be doubly careful with credit card cheques. Since May 2005, most lenders do now charge a Balance Transfer fee but some do not. You need to do your maths to work out whether any BT fees will lose you money (see the FAQ question, above, on choosing a credit card). For details of cards that do not charge a fee, please see our No Fee Cards Section.

What if the balance transfer will put my other credit card or bank account into credit?

Experience suggests that the credit card company neither knows nor cares whether your other cards or bank account goes into credit. credit over £10,000 can raise concerns of money laundering on your account, so levels below this would be advised.

Do I have to do my balance transfer at the same time as my application?

No you don't have to. You can request it later at a time that suits you. If you specify a balance transfer on your application then it is conceivable that the card issuer will try to offer you a card limit that is more than your balance transfer request. However, there is no guarantee that they will. Also, sometimes the application process may take a long time which means it is difficult to be 100% confident that they will process your application and do a balance transfer in time.

My credit card company has sent me some cheques. Will they charge me for using them?

For the definitive answer, check your own card's Ts & Cs. Most credit card companies charge you for using cheques, so rip those up. They either treat them as a cash advance or they charge you a transaction fee. However, there are sometimes exceptions. Mint have been known in the past to not charge for cheques so they can be used very effectively for paying money straight into a bank account.

My Credit Card company offers payment protection insurance. Should I take it?

This has no value to the stoozer, because the stoozer should always be in a position to pay off the complete balance at any time. Even if the stoozer was made redundant the full funds would be sitting in a savings account and the credit card bill could be cleared immediately. Over the course of 1 year, this insurance would cost a Stoozer £900 to carry a £10,000 balance, whereas it would only earn approximately £470 stoozed.

What happens at the end of the interest-free period?

You can either pay off the full amount from you 'Stooz pot' (the bank account where you have saved your borrowed money) or you can balance transfer it to another card. Use the menus at the top to read the guides.

Can I get an extension to my 0% introductory period?

There is no harm in asking and experience shows that some lenders do look favourably on such requests.

Who are the Credit Reference Agencies and who uses them?

Credit Reference agencies are independent businesses who collect, manage and provide access to information about each person's credit history. Most financial providers will consult one or more of these before agreeing to lend you money. The main 2 agencies are Experian and equifax.The statutory charge for this is only £2, although they both offer enhanced services which cost you more. However, the basic £2 report is all you need to get an understanding of your current credit history.

Their websites are Experian (free trial) equifax

Do I have to pay anything during the interest free period?

Yes you do. You must still make the minimum monthly payments on your card. Many new stoozers overlook this. The simplest thing to do is to make the minimum monthly payment from your Stooz account. However, some Stoozers prefer to make the payment from their current account on the basis that if they can meet the minimum monthly payments from their day-to-day spending then they are saving even more money.

Can I make balance transfers between my card and my partner's card?

This seems to work OK for most people.

Why is it called Stoozing

It was coined after Stooz on The Motley Fool's Credit Card discussion board. While there are many people using this technique, This sites owner and Fool contributor called Stooz has been doing it since 2000.

Who first called it Stoozing?

DavidB007 referred to "doing a 'Stooz'" on 8/1/2004. The first post referring to Stoozing was by Blarm on 1/2/2004

Still got questions? ask them in the FREE stooz Forum

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