The Art of Stoozing to Make Money from Credit Cards
Make Money from Stoozing
Stoozing, this is a sophisticated method of making money from credit cards that offer 0% introductory periods, the method requires cast iron discipline in never spending on the cards.
But, I hear you all ask - what is stoozing and can I do it?
Stoozing, in the simplest terms is borrowing money from credit cards that offer a 0% introductory deals and saving that money in a savings account for the duration of the offer on the credit card. Then, the stoozer will apply for another 0% introductory credit card deal from another provider and transfer the whole balance from the first card onto it. This way the cash balance never has to leave the savings account and can be held like this for a long period of time earning 5% + interest!
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Stoozing and Offset mortgages
Offset mortgages allow your savings and current accounts to be used to lower the amount of interest you pay on your outstanding mortgage balance e.g. if you have a mortgage outstanding for £80,000 and a savings account containing £10,000 the bank will only calculate and add interest on the outstanding £70,000; effectively saving you interest by the savings amount, at the same APR as your mortgage. This APR is often equal or greater than their typical savings account. This is similar to overpaying on your mortgage or other loans except the money is not locked in, and still accessible to remove again later.
As the money residing in your other accounts is no longer earning interest, but reducing outstanding debt, it also means the savings money is also not subject to tax unlike a normal savings account. By offsetting in this way with savings, it is possible to greatly reduce the number of years that the mortgage will run for. Instead of paying off the mortgage for a typical 25 year period, with regular capital payments at the existing level, you can shave several years of the completion date. Once you have an offset mortgage, the more savings you have, the lower your mortgage interest will cost. This is where Stoozing comes in. Instead of using your own money locked away to reduce your mortgage, use the 0% balance transfers from the credit cards to put money into your linked savings account using the same Stoozing methods.
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Stoozing cannot last much longer...
The situation can't last though. Already Barclaycard and MBNA have introduced one-off charges on transferred debt, based on a percentage of the amount, and other card providers are expected to follow this strategy. Also, as the PricewaterhouseCoopers' report notes, card issuers are likely to become increasingly selective about which customers they offer balance transfers to and there will be a much stronger focus on customer retention. They may also increase other fees, such as those imposed for exceeding credit limits.
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