Are You A Stoozer?
'Stoozing' is a term that entered the English language at the start of the 21st century. It refers to the practice of making money by moving money from credit card to credit card to take advantage of preferential interest rates. Stoozers are similar to credit card tarts and credit card jumpers.
Who Can Be A Stoozer?
To be a successful stoozer, you have to be free of credit card debt. If you are not, there is no point in stoozing, as you will have to pay any profits you make in interest. Stoozing is similar to using an interest-free period to buy an appliance, even if you have the money in your account.
How Stoozing Works
To stooze successfully, you will need a high interest savings account in which to stash your cash. Then you need to source a credit card with a 0% introductory balance transfer period. Most cards of this type offer the discount for up to 12 months. It is worth getting a card with as long a discount period as possible.
The other key aspect of the new credit card is what is called a super balance transfer facility. This allows you to pay money into your bank account without incurring an additional charger. A card which allows you to use cheques at no extra charge will also work well.
Cashing In
Once you have both the credit card and the savings account, transfer the amount of credit you have on the card to the savings account. Use either the super balance transfer facility or a fee free credit card cheque to do this. You will earn interest on the money while it remains in your savings account.
Meanwhile, make sure that you make the minimum repayment to the card company every month. Unless you are very organised, it might be worth setting up a direct debit or standing order so that you don't forget. At the end of the interest free period, pay back the credit card from the savings account. Any interest earned remains in the account.
If you wish to repeat the cycle, you need to apply for a new credit card at least six weeks before the interest-free period is due to end. Instead of withdrawing money from your savings account, you can use the balance transfer facility on the new card to pay off the old card. Some people use this system with several credit cards at the same time, though you need good organizational skills to manage this.
Penalties For Stoozing
Stoozing can damage your credit rating if you forget to make payments on time, or if balance transfers are late. Applications for multiple credit cards within a short period are also penalised.
However, people who are well organised and who make repayments on time can earn a good deal of cash by using this method.
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