Get free money from your bank card – ‘Stoozing’
Stoozing is at it again. It was revealed this week that rising interest rates mean you’ll get free money from your credit card for the first time since before the financial crisis, using a tactic called ‘stoozing’, but you may need to act soon to take advantage.
What is stoozing?
Before the financial crisis, a group of people used their bank cards to make themselves tons of pounds richer. They simply used the introductory 0% interest range on a new bank card to get some money, then put that money away somewhere that paid the interest. The distinction between what they pay you in interest and what they charge you with the bank card is your income. Easy!
Turn higher interest rates into free money
a standard 0% bank card stability switch You do not deposit cash in your checking account, it is used to maneuver debt from a special bank card. Against this, change cash bank cards do just that. Once your card is accepted, you simply designate a current account of your choice for the money to be transferred to, then you get a set period in which you can pay it back interest-free.
However, while interest may not be charged, there is a charge.
The good news is that these days the fees are typically 4% of the money you exchange, and that’s less than you can earn with a hard and fast fee bonus.
At the time of writing, one of the highest paid one year financial savings bond You pay 4.18% interest, which means £41.80 interest for every £1,000 you save, and a small profit for every pound you switch to financial savings.
However, you may need to act shortly to benefit:
A closing window at no cost of money
In recent months, both the length of time you receive before interest is charged on a new cash-change card and the rates offered on fixed-rate bonds have been declining: just last month, savings from a highest paying year The account provided 4.33% interest, which is now down to 4.18%. On top of that, last year you might choose a money transfer card that offers 18 months at 0% interest, whereas now you’ll struggle to find one that offers more than 12 months.
If both drops get much lower, you’ll find yourself paying more in fees than you earn in interest.
James Andrews, private finance professional Explain top stoozing: “For people willing to go the extra mile, there are ways to make a lot more money before they need to pay the bank card company again.
The first is pretty simple: At the end of the 0% cash change card’s introductory period, switch that balance to a new 0% credit card instead of using your savings to pay it off.
There are still several free stability change cards on the market, with 0% intervals of over a year, which allow you to repeat the 0% trick for at least another year.
If you can’t find a free offer to sign up for, be sure to check to see if the rate of the stability change is lower than the interest rate of the savings account you’re using.
And when you’re feeling particularly fancy, you can even try wearing a 0% buy card to add to your financial savings pot.
These cards cost no interest on new purchases for a set period, currently up to two years for the best deals, and there are never any fees associated with them.
If you used them to make regular purchases, then move the money you would have spent on them from your current account to a savings account, you can earn interest on this until the 0% period runs out. ”
Three things to keep in mind
There are three potential pitfalls that could cause your good plan to silence your cash-freeing strategy to fall apart.
The main one is that while there is no interest due to the 0% cards during the introductory period, you still have to make payments.
These will be the minimum amount each month, but it won’t be anything at all.
In the event that you do not meet the minimum cost due, you may lose your 0% privileges in addition to having a black mark on your credit score report.
The second factor to consider is what happens at the end of the 0% interval.
If you don’t already have the savings available to clean up your stability, or can’t access it for whatever reason, then you’re left with considerable debt that unexpectedly adds up to costly interest.
Lastly, you will have to be cautious when making purposes for the new playing cards. Perfect cards are only available to people with excellent creditqualification – and to make matters worse, using a bank card and then being declined for it really makes it more difficult to get a special one.
A simple spherical method that consists of making use of a eligibility checker or card combination instrument to maximize your chances of being accepted on the first day of travel.