============= FAQ ============== This has 3 sections@
* An introduction to making money from credit cards
* HOWTO make money using cashback cards
* HOWTO make money using Stoozing cards
Introduction to Making Money from Credit Cards
1. Someone told me that it is possible to make money from credit cards. Is
this true ?
Yes it is true. Normally credit card companies make money from both
consumers and retailers, but by being careful and following the guidance in
this FAQ/HOWTO it is possible to use them to your advantage and to make
money from them.
2. How can I make money from credit cards ?
There are two ways to make money from credit cards :
a. Cashback. This is where the credit card provider will pay you a small sum
('cashback') for each purchase using your card: typically 0.25% to 1% of
each purchase. Cashback is paid out annually, either by crediting your
account or by sending you a cheque. See below for our cashback guide.
b. Stoozing. Stoozing is a way of making money by exploiting credit cards
which have an introductory period during which no interest is charged. There
is fierce competition in the credit card industry so many lenders have
introductory periods of between 5 and 12 months during which they charge 0%
interest on the card balance. This allows the Stoozer to borrow money for
'free' and to move it into a high interest savings account. At the end of
the 0% introductory period, the money is withdrawn from the savings account
and used to pay off the full credit card balance. The interest gained from
the savings account is your 'profit'. An alternative way of making money
from Stoozing is to put the borrowed money into an offset mortgage instead
of a savings account. This reduces your mortgage payments, 'earning' you
money in that way. See below for our Stoozing Guide.
3. How much money can I make from Credit Cards ?
Typically cashback might earn you between 50 and 200 per annum and
Stoozing could earn you between 400 and 1500. These are not minimum and
maximum figures: they could be higher or lower depending on your own
circumstances and how much effort you are prepared to put in to the
activity. The figures are intended to give you an indication of the
4. Can anyone take advantage of Cashback and Stoozing ?
No, not really. If you are in debt you should focus on paying off your debts
rather than making money from credit cards. In fact, if you have credit or
store card debt, then the cards will be costing you money rather than making
you money. If you are in debt, you should select a credit card based on its
ability to help you to reduce your debt levels. For example it would be
unwise to select a good cashback card if it had a high interest rate. N.B.
0% introductory credit cards can help you repay your debts more quickly as
part of an overall debt reduction plan, but this should not be confused with
Even if you are not in debt, Stoozing may not be for you. Please read the
Warnings in the "HOWTO Make Money from Stoozing".
5. Can I make money from Cashback and Stoozing at the same time ?
Yes you can. However, you should use separate cards for each. The
characteristics required from a Cashback card and a Stoozing card are very
6. Which of the ways of making money from credit cards is easier ?
Cashback is much simpler to operate than Stoozing and has little or no risk
associated with it. Stoozing requires a much greater attention to detail and
more effort, but the rewards can be much higher than cashback.
7. Do I need to consider anything else ?
Before you proceed, here is something to think about. If you have debt on
your credit cards that you can not pay off in full each month, then you will
not be able to make money from credit cards even if you follow the advice
contained in here. In fact, the credit card companies will be making money
HOWTO Make Money from Cashback
1. How does cashback work ?
Cashback is really quite simple. For each purchase you make using your
credit card, the card issuer will pay you a small percentage back as a
'reward'. To make money from a cashback credit card you must pay it off in
full every month, otherwise you will get charged interest. One month's
interest could be greater than a whole year's cashback gains !
2. How much money could I make from Cashback ?
Between 50 and 200 per annum would be typical, but more is possible. It
depends on two factors: how much money you spend on your credit card and
what percentage cashback your credit card offers. For example an annual
spend of 10,000 on a 1% cashback card will earn you 100. A 30,000 spend
on a 0.8% cashback card will earn you 240. With one card currently
available, someone spending 30,000 could get 540 cashback.
3. Can anyone make money from cashback ?
The only way to make money from a cashback credit card is to pay it off in
full every month, otherwise you will be charged interest. Paying a credit
card off every month means that (a) the card holder has to have sufficient
funds available to make the full payment and (b) must be sufficiently
organised to be able to make the payment on time.
4. Are there any risks associated with cashback ?
There are relatively few risks from cashback providing you are organised and
do not overspend. The risks are
i. You are tempted to spend too much because you believe it is earning you
more cashback money. Having a cashback credit card should not mean that you
spend any more money than you would previously have done, otherwise you will
be worse off, not better off.
ii. You can not pay the credit card off in full at the end of the month. If
you find yourself in this position, you will be charged interest on the
outstanding balance which could wipe out all your cashback earnings.
iii. You make a late payment. If you make a late payment you will probably
be charged interest and may also have a late payment fee. This would wipe
out your cashback earnings.
5. What do I need to look for in a Cashback card ?
As you might expect, the main feature you should look for is a high
percentage cashback rate. That may sound very simple, but it is complicated
by the fact that some card issuers provide a flat rate for cashback, whereas
others offer different levels of cashback depending on how much you spend on
your card during the course of the year. Others offer an enhanced percentage
cashback during the first few months.
So what does that mean to you ? Well, it means that if you want to maximise
your cashback returns then you need to understand your spending patterns
i.e. how much you are likely to spend on you credit card in the course of
the year and whether you have any major expenses coming up soon that would
make a card with a good introductory cashback rate beneficial.
If you track your spending using a notebook, spreadsheet or home finance
package (e.g. Quicken or MS Money) then look back to see how much money you
have spent on credit cards historically. If you don't track your spending,
have a look back through a few months worth of credit card statements. If
you don't even have a few months credit card statements filed away then ask
yourself whether you have the discipline and control to be able to make
money from credit cards in the first place.
Don't forget that with a cashback card you will be trying to maximise how
much of your expenditure you will put through the card, so add a percentage
increase on to your historical spending figure. [N.B. This is not advocating
spending more money to earn cashback, merely putting a greater amount of
your existing expenditure through a cashback card !]
What else do you need to look for in a card ? You should try to find a card
with a credit limit that will comfortably take your peak monthly spend. For
example if your normal monthly budget is 1000 but you might have a car
repair bill (500) and pay for a holiday (1500) in the same month then you
will need a credit limit of at least 3000.
As with any credit card, it is very important to understand the service and
the terms and conditions offered by the card. For example, a 24 hour
customer service centre and/or managing the account online might be very
important to you or there might be a 'catch' in the terms and conditions
which will make it difficult for you to operate the account.
Another consideration is how widely accepted your chosen credit card is.
This is not a problem if you have a Visa or Mastercard credit card, but it
is a consideration if your primary cashback credit card is an American
Express credit card. Most major stores, hotels, garages, airlines and travel
companies accept American Express, but small shops usually do not. If AMEX
is you preferred cashback card, have a Visa or Mastercard cashback card as a
6. Where can I find details of credit cards offering cashback ?
There are many sources of information about credit card offers. However,
most financial websites also take advertising so sometimes you need to look
a bit deeper for the best offers. Here are some websites to get you started.
Money Supermarket - Good site that also has unique offers from time to time.
Select the 'cashback' option in the top panel, then click on proceed.
Thisismoney - Website for the Daily Mail. The credit card pages link to
moneysupermarket. The following goes straight to the cashback cards page.
7. How can I maximise my cashback 'earnings' ?
First of all, ensure that you understand your spending profile and choose a
good cashback card (see above).
Secondly, be imaginative ! It might surprise you how many things you can pay
for with a credit card. Most people would expect to be able to use a credit
card for buying food at the supermarket or buying clothes and CDs etc, but
did you know that some local authorities will let you pay your council tax
by credit card ? Your utility suppliers will probably let you pay by credit
card, although many offer a discount for paying by direct debit so that may
be better than cashback. You can pay for your household and car insurances
by credit card. The author/editor of this FAQ paid for a 14,000 kitchen on
a 1% cashback card, earning 140 in the process.
When out for dinner, pay by credit card. Some Fools will put a meal with
friends on their cashback credit card and have their friends give them cash
for their share. This means that cashback is earned on the total value of
all meals, not just your own. Of course, friendship is more important than a
few pounds of cashback, so don't jeopardise any friendships by doing this.
If you have to pay for work-related expenses before claiming them back, then
you may wish to consider using a cashback credit card.
As stated before, whether you use your credit card for your own or your
employer's purchases, it would be a false economy to spend more money than
you need solely to maximise your cashback.
8. Should I cancel my direct debits and pay by credit card instead ?
This is a matter of personal choice. Before cancelling any direct debits,
here are a couple of additional considerations. Some organisations give a
discount if you pay by direct debit, so check before cancelling them - it
may outweigh any potential cashback. Paying by direct debit (or standing
order) is easy because it just happens - it doesn't need your manual
intervention. If you cancel a load of direct debits, you may find the task
of remembering to pay everything by credit card on the phone too
time-consuming. It is possible to set up regular payments using a credit
card (a 'continuous authority') but you are not protected in the same way as
you are with a direct debit. In fact, you cannot stop a continuous authority
unless you can get the payee to stop collecting the money from your account
9. Should I use my cashback credit card if the retailer charges me to use a
credit card ?
Probably not, but it depends on what you want to achieve. It is almost
certain that the charge for using the credit card will be greater than your
cashback so it would cost you money rather than earn you money. However, if
you need to make the purchase using a credit card anyway - to give you a
couple of weeks cashflow - then using a cashback credit card would be better
than using a non-cashback card. Remember - you still need to pay it off at
the end of the month to avoid interest charges.
10. What credit limit will I need ?
As stated above, you will need a credit limit that can cope with the
spending for your peak month e.g. normal monthly budget plus paying for a
holiday plus an unexpected major bill.
11. When is my cashback paid ?
Normally you will be paid on, or shortly after, the anniversary of your card
i.e. 12 months after being accepted for the card. Read the card's Ts & Cs to
12. Do I get paid cashback for Balance Transfers ?
No. I have never seen a card that does, but maybe someone will be the first
! Check your own card's Ts & Cs.
13. How is my cashback paid ?
Normally the cashback is credited to your account, although I know of one
who sends a cheque to the cardholder.
14. Do I have to pay tax on my cashback ?
15. What happens if I close my card before the anniversary date ?
In most instances you will lose any accumulated cashback, so wait until
after the anniversary before closing the card. The author has experienced
one exception to this rule. As with any of these detailed questions, read
the Ts & Cs of your card. If you were considering closing the card because
you were worried about your credit rating, but you did not want to lose any
cashback, then reduce your credit limit while leaving the card open until
16. Is there anything else that would stop me getting my cashback
Most card issuers insist that you operate your account very well e.g. they
may not pay you any cashback at all if you make a few late payments or miss
a payment. Once again, read the Ts & Cs very closely.
17. Will cashback be available for ever ?
Who knows ? As long as the credit card companies can attract new customers
with cashback and find that it is affordable, then one would hope so.
However, the last 12 months (mid 2003 to mid 2004) has seen a decline in the
cashback percentages being offered. In early 2003 many cards offered 1%
cashback and a few 'mean' ones offered 0.5%. By the end of 2003 only a
couple were offering 1% and most offered 0.5%. In 2004 1% offers are pretty
hard to find and many of the 0.5% deals have dropped down to 0.25%. However,
don't be disheartened, there are still good deals to be found. It is still
possible to get 0.8% and 1% cards and some even offer higher percentages for
a short period or for high spending.
HOWTO Make Money from Stoozing
1. How much money could I make from Stoozing ?
Between 400 and 1500 per annum would be typical, but more is possible. It
depends on how much money you can borrow from credit cards and what interest
rate is being paid by your savings account. How much you can borrow depends
on your credit rating, which in turn depends on many factors such as your
earnings and what other debts you have.
For example if you borrow 30,000 from credit cards and save that in an
account that pays 4.7% gross interest per annum, you will earn 1,410 before
tax. For a normal rate taxpayer this would be approximately 1,100 after tax
and for a higher rate taxpayer this would be nearly 850 after tax.
2. Can anyone make money from Stoozing ?
No, I am afraid not. To benefit from Stoozing, you have to be in the
position where you do not actually need to borrow any money. So this means
that anyone in debt can not make money by Stoozing. However, introductory
rate credit cards can play a significant part in reducing debt by
temporarily minimising (or eliminating) interest charges during introductory
Even if you are not in debt, Stoozing may not be for you. There are many pot
ential pitfalls for those who do not have an attention to detail. Before
embarking on Stoozing you need to be honest with yourself. Do you have the
time and inclination to manage your finances with great care ? Do you have
an attention to detail ? Are you prepared to take the time out to read every
line of your credit card's Terms and Conditions ? Do you have a track-record
of managing your finances well ? Are you prepared to devote some time to
researching credit card offers, making the applications and moving money
around within specific time deadlines ? If the answer to any of those
questions is "No", you may not have the right frame of mind for Stoozing.
Another area to consider, is how open to temptation you are. If you would
feel in the slightest bit tempted to spend or gamble (including investing)
the credit card money, then don't consider Stoozing. It is imperative that
the borrowed money is sitting there safely in a no risk account so that you
can pay off the credit card when required.
Finally, how much do you care about your credit rating ? To maximise your
'earnings' from Stoozing, you will probably take on a lot of 'debt'. While
you know that you could pay off all the debt tomorrow because it is all
sitting in a savings account, any future lender doesn't know that. So if you
care about your credit rating or can foresee that you will need credit in
the near future, then forget Stoozing for the timebeing. The more debt you
take on, the more likely that another lender will turn down a credit
request. If such a rejection was just for another Stoozing card, then that
would be fine. However, if the rejection was for a mortgage application for
your dream home then that could be a bit more of a problem.
3. Are there any risks in Stoozing ?
Yes, there are lots of risks, but anyone with the right frame of mind and
attention to detail can minimise or eliminate the vast majority of them. See
the section "Can anyone make money from Stoozing" to help you decide whether
you have the right frame of mind. Here is a summary of the risks. (i) You
spend some of the borrowed money and can not pay it back, (ii) You damage
your credit rating and can not borrow money in the future when you really
need it, (iii) you forget to pay off the full amount at the end of the
introductory period, (iv) you don't know the exact date of the end of the
introductory period (very easily done) so miss the date, (v) a balance
transfer from another card doesn't not pay off the balance in time and you
get charged interest, (vi) a credit card application does not get approved
in time, (vii) you use your Stoozing card for purchases and get charged
interest (You should not use your Stooze card for purchases. This is
explained later), (viii) you damage your credit rating when you need to
apply for a mortgage or other important loan.
4. How does Stoozing work ?
In simple terms, Stoozing is borrowing money from credit cards that offer a
0% introductory period and saving that money in a savings account for the
duration of the offer. At the end of the introductory period the credit card
bill is paid off in full and any interest earned in the savings account is
kept by the Stoozer. Rather than pay off the credit card directly from the
savings account, the Stoozer would normally have another 0% credit card
lined up to pay off the first one. Thus, the borrowed money could stay in
the savings account for a considerable amount of time.
5. Could you give me a step-by-step guide to Stoozing ?
There are many detailed considerations which are covered in the rest of this
FAQ/HOWTO, but the basic process is outlined below.
i. Open up a good savings account that can be easily managed online and that
pays a high interest rate.
ii. Apply for 1 or 2 credit cards that offer a 0% introductory period for a
good length of time. At the time of writing (July 2004), there are 9 month
and 12 month offers around if you look carefully, but a 6 month period is
perfectly workable. The longer the period of the offer, the less work you
have to do to keep the ball rolling.
iii. At least one of the credit cards should have a way of paying money
directly into a bank account : either as a balance transfer or by a credit
card cheque for which there are no charges (see "How do I choose a Stoozing
iv. Ask each credit card issuer for the precise date by which you have to
pay the complete balance in order to avoid any interest payments. Ideally
you should get this in writing. If you get the information verbally, make a
note of the date and time you called Customer Services and the name of the
person you spoke to, so that you can refer back to it if necessary.
v. Read all the Terms and Conditions of your new credit card(s) so that you
understand exactly how the card operates.
vi. Ask your credit card issuer to do a balance transfer from your bank
account to your credit card. The request can usually be made by phone,
online or by completing a balance transfer form sent by your card issuer.
The credit card issuer will put the requested funds into your bank account.
[This is referred to as a balance transfer FROM your bank account because
the assumption is that you are transferring a negative balance from the bank
vii. If the bank account that you specified in the previous step was your
high interest savings account then the money is now where you want it -
earning interest for you. If the account specified was your current account
then you now need to move it into the savings account.
viii. If you have a second credit card that can also pay directly into bank
account then follow the above steps for this card too.
ix. If you have a second credit card that only allows Balance Transfers from
other credit cards (i.e. not from a bank account), then you need to route
the money to your savings account via a card that does allow a bank transfer
(e.g. your 'Card 1' mentioned above). The steps are (a) Ask card issuer 2 to
Balance Transfer from card 1 to card 2 (this moves money from card 2 to card
1), (b) Ask card issuer 1 to Balance Transfer from your bank account to card
1 (this moves money from card 1 to your bank account).
x. At this point you have moved the money from your credit cards into your
savings account and these free 'loans' are earning you interest, so much of
your work is complete. However, during the course of the 0% introductory
period you must still make the minimum monthly payments requested by your
card issuer. These can be made from your bank account or from your savings
xi. About 2 months before the end of the introductory period of your
card(s), you should start researching which cards you should apply for as
replacements for your current card(s).
xii. About 5 or 6 weeks before the end of the introductory period you should
apply for your new card(s).
xiii. As soon as you get your new card(s), ask the new card issuer to do a
balance transfer from your existing credit card(s) so that you pay them off
in full before the end of the introductory period. Keep a close eye on this.
If there is any chance that the balance transfer will not go through before
the end date of your introductory period, then cancel the balance transfer
request and pay the existing cards off from the money in your savings
account (known as your 'Stooz Pot'). Whatever happens, you do not want to
pay any interest at all.
xiv. Once you have paid off your original cards, ask the card issuers to
close the accounts and ask them to inform the credit reference agencies of
xv. At this point you have moved your 'debt' from your first set of credit
cards to your second set of credit cards while keeping all the money in your
savings account. Ensure you that you adhere to the Ts & Cs of these new
cards and pay them off by the end of their introductory periods, exactly as
you did with the first set.
xvi. 2 months before the new cards start charging interest, start
researching cards for your next set . and so the process continues to repeat
itself. And guess what ? Many card issuers will let you apply as a new
customer if you have not had an account with them for at least 6 months, so
if you closed down your old credit card accounts when they came to the end
of their introductory period, then you can reapply for them in the future.
6. But is it legal?
Yes. You are simply taking advantage of introductory offers made by the
credit card companies.
7. But is it moral ?
The question of morality is down to personal judgement. 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 judgement.
8. Will Stoozing effect my mortgage application ?
Yes. 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 effect how much they would lend you. You would be advised to
suspend your Stoozing at least 6 months before making a mortgage application
i.e. to pay off all your Stooz cards and close them.
9. 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%
period 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
You should always try to have at least one card that provides a route to
make payments into a bank account.
Some cards also offer a introductory 0% on purchases. For the most part,
this does not add very much to the Stoozer because as long as he/she can
transfer out the whole balance, why would he/she want to make any purchases
on the card. Besides, why not use a cashback card for any purchases and make
money that way too ! The only time that a 0% on purchases is of use to a
Stoozer is if they do not have a credit card that allows a transfer to a
bank account. Using a 0% on Purchases credit card can allow you to build up
the borrowed money over a period of time. Instead of paying off the card
each month, the balance grows and after the end of the introductory period
the balance can be transferred to a new card.
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.
10. Where can I find the best Stoozing cards ?
Look for the balance transfer information at the following websites.
The Motley Fool. Look for 0% on balance transfers in the "intro interest
rate" column of the table.
Moneyfacts. A rather incomplete list here
ThisisMoney. Links directly to Moneysupermarkets Balance Transfer page
11. How do I choose a good savings account for my Stooz money ?
Very simply, 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.
12. Where can I find the best savings accounts ?
Look at any of the financial websites or in your daily newspaper.
Complete list from moneysupermarket
13. What do I need to consider if I use my Stooz money to offset my mortgage
14. Can I make the occasional purchase on my Stoozing cards ?
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.
Do not use such a Stoozing card for purchases !
Of course, if your card offers 0% for Balance Transfers and 0% for Purchases
then you can make purchases. However, 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.
15. How do I get the money from the credit card into my bank account?
As stated above, 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. These cards make the payment in
one of 2 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 usually 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. At the time of writing (July 2004), Egg and MBNA both
allow balance transfers from bank accounts and MINT provides credit card
cheques without charge. N.B. MBNA do charge for credit card cheques.
16. What if the balance transfer will put my other credit card or bank
account into credit? Surely the credit card company won't transfer money if
they know I'm not actually paying off debt?
Experience suggests that the credit card company neither knows nor cares
whether your other card or bank account goes into credit. What they are
primarily interested in is lending you money in the hope that they will earn
money from you when the introductory period ends. Indeed, some card issuers
encourage it by suggesting that you move some money into your bank account
for other spending.
17. I see some fine print about charging a percentage on cash advances. Will
this charge be made on balance transfers or transfers to current accounts?
For the definitive answer, check you own card's detailed terms and
conditions. However, it is important to recognise that 'cash advances' and
'balance transfers' are 2 different things and are treated very differently.
A cash advance would include withdrawing money by using an ATM or might also
include using a credit card cheque. Balance Transfers are where you move
money from your credit card into another credit card or bank account. Cash
advances almost always attract immediate interest payments from the day you
withdraw the cash, whereas balance transfers are almost always free during
the introductory period.
18. 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.
19. My credit card company has sent me some cheques. What should I do with
them? 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 them up or shred them. They
either treat them as a cash advance or they charge you a transaction fee.
However, there are sometimes exceptions. Currently (July 2004) MINT do not
charge for cheques so they can be used very effectively for paying money
straight into a bank account.
20. What happens at the end of the interest-free period?
See the step by step guide above. 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.
21. 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. If you pay off the full credit card amount
before the end of the 0% period then the credit card company can see that
you are in a position to close the card and move elsewhere. You may be able
to get some attention from their customer retention team in such
circumstances. The following are examples where Fools have got additional 0%
time from existing lenders. Earlier in 2004 HBOS launched a new 9 months 0%
card which they allowed existing customers (Halifax and Bank of Scotland) to
upgrade to. MBNA seem to be the most happy to extend 0% offers, but they
usually make a charge (up to 35) for a subsequent balance transfer. However
35 to pay for Balance Transferring 20,000 for a further 6 months could
still make you 435 before tax ! Fools have also had some success with First
Direct by saying that they are prepared to move between different First
Direct credit card types. It may also be worth saying to your lender that
you would happily move from a Visa to a Mastercard or vice versa.
22. When do I have to pay off the balance without getting charged interest ?
Many new Stoozers assume that they have to pay off a 6 month 0% introductory
offer by the payment date of their sixth statement. Wrong !! - well in most
cases that is wrong. With most card issuers the introductory period and its
end do not coincide with monthly statement payment dates. The introductory
period will normally end a set number of months after (a) your application
date, (b) the date they set up your account, (c) the date they received your
application, or (d) the date of your first balance transfer. If you miss
this date, you will get charged interest. The best thing to do is to contact
your credit card company and ask them what date you must pay off the full
balance in order to avoid interest. Try to get this in writing by emailing
them or writing a formal letter requesting the information. Failing that,
ask for the name and phone number of the person in Customer Services who
gave you the information over the phone. Record this date in your diary.
23. Can I have more than one credit card running at a time with 0% money
earning interest for me? If so, how many ?
Yes you can. However, having too many cards may damage your credit rating.
There are many Stoozers who have 3 or 4 cards. Some even have as many as 10
which they have built up over a period of time. If you want to sustain
Stoozing over many years, then don't forget that you will need to leave some
cards that you can apply for when you current cards run out.
24. 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 credit reference agency before
agreeing to lend you money. The main 2 agencies are Experian and Equifax. By
law they must provide you with all the information they hold about you
within 7 days. 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 and
Some financial companies consult one agency, other consult the other. A few
use neither and some use both.
25. 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. N.B. It is unlikely that your savings
account will allow you to set up a direct debit to make the minimum monthly
payment so you will have to do the payment manually each month (i.e. set up
an online payment each month).
26. If I have to make minimum monthly payments from my Stooz pot, how can I
be making any money ?
You are making money. Don't confuse minimum monthly payments with interest
payments. If you are not being charged interest on your credit card, then
the monthly payments are paying off the actual capital amount that you owe.
So when it comes to the end of the introductory period you have already paid
off some of the card debt.
27. Doesn't making minimum monthly payments reduce the amount that I am
earning interest on ?
Yes. If you pay your monthly payments from your savings account, then you
are slowly reducing the amount you are earning interest on. Many Stoozers
don't see this as a big deal. Others simply set up another balance transfer
to put the money right back again to keep the Stooz pot topped up !
28. How does my credit rating affect my applications?
Quite a lot. The better your credit rating, the more money you can borrow
and move into a savings account to earn you interest.
29. How can I maximise the chances of my card applications being successful?
Pace yourself. Don't get all excited and apply for 6 credit cards after
reading this. You need to convince the lenders that you are in control and
that you can meet your debt repayments. The more applications you make in a
short period of time, the more you look like a desperate borrower. Each time
you apply for credit (a new credit card, a personal loan, a free finance
offer on some furniture, a new mobile contract etc), the lender will do a
credit check. They will see who else you have been trying to borrow money
from over the last 6 years. Experience shows that one credit check per month
is perfectly acceptable as is 2 or 3 checks in one month followed by 6
months with none. Try to do no more than about 10 a year if you can.
When you no longer need a credit card, don't just leave it there with a zero
balance. Close it. Although you may not consider the card as 'active', any
lender will see that you have that amount of credit available to you to use
tomorrow which increases their exposure. Also, if you have some cards that
you still use a bit consider lowering their credit limits.
30. Can I make balance transfers between my card and my partner's card?
This seems to work OK for most people.
31. Why is it called Stoozing.
It is not generally known as Stoozing, but that has become the accepted term
32. Who first called it Stoozing ?
33. I have a new 0% card with a high credit limit. Is there any reason why I
should not transfer the whole amount into my savings ?
No reason not to. Go for it. However, some lenders won't let you transfer
the full amount. They like to leave a bit of headroom to encourage you to
make purchases on your card. If in doubt, give it a go or call them to ask
34. Does card loyalty help in Stoozing ?
Experience would suggest not.
35. Can I move the money directly from my Egg credit card to my Egg savings
No. However, you could move it via another credit card or another bank
36. How do I increase my Stooz pot ?
The best way is to build it up over time, by adding new cards and/or getting
higher credit limits. Many Stoozers find that they get better limits in
their second batch of Stoozing cards because the new lenders want to allow
them to balance transfer enough to close existing cards. However, that does
not go on forever. As you build up higher levels of debts then more lenders
get nervous and offer you lower amounts. It is a question of striking the
right balance that works for you.
37. Is it OK to exaggerate my earnings on a credit card application ?
No. Putting untruthful information on a credit card application is fraud. It
is not unknown for lenders to ask for proof of earnings so you could quite
easily be found out!
- posted 15 years ago