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Credit Card Stoozing is probably one of the best money
saving ideas available for those who have credit card debts or just want to make some free money although surprisingly
it is rarely mentioned. It first hit prominence around 2004.
So what is it?
Basically it is the act of borrowing
money at 0% interest from credit card companies and then typically placing this money in a high interest savings account until
the 0% interest free period ends when the debt is paid back and the stoozer has gained free money through the interest
earned.
Another way though where it can also work exceptionally well is for those with credit card debt and
with the bba saying that over 72% of UK credit card balances are not paid off in full each month this applies to a large %
of the population. The example below shows how much it can save you.
Lets assume that you are currently paying 19.9%
interest on your credit card and owe £5,000. You decide to transfer this to one of the credit cards that are offering
16 months interest free credit. You will get get charged a fee of 2.98% (or similar)
on the amount you transfer to them but then will get no interest charged on the £5,000 for 16 months. This results in
a saving to you of £214 per £1,000 transferred so you will pay £1070 less interest even after the fee.
If you choose to use these interest savings to pay down the debt even better. The thing not to do is use this card
for new purchases or build a debt back up on the credit card you transferred the balance from.
With
UK interest rates so low the stoozing to place in a savings account is quite marginal at present but once interest rates
inevitably rise in the future i am sure it will become big business again.
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