by Thomas Mayne

Created on: August 17, 2009   Last Updated: August 19, 2009

Stoozing

Free money sounds really great, but as with lots of schemes, is it a scam?
Well no, it is not. I speak from experience as I have certainly made over 1500 from playing the system with 0% APR credit card offers. Of course, as with many things, there was once a 'heyday' of stoozing (as it is called) when 'rate tarts', as they are known, never had it so good.

With the advent of balance transfer fees, normally 2-3%, the effectiveness of stoozing is much diminished. Add to that the current dire level of savings rate and you could argue that stoozing is simply no longer worth the effort. However there is a certain satisfaction (and monetary gain) to be garnered from spending a ten minutes on a website and five minutes on some admin to turn a profit at the expense of big business.

Here's how you do it... timing is critical. Firstly you need to establish a credit card which allows you 0% on purchases for say 14 months. I would suggest an MBNA card. Check their terms and conditions, for fees and when they will begin to charge you interest. The next bit requires some discipline. Do all your normal spending on the credit card but only specify the minimum payment on your direct debit. As your wages accumulate siphon them off into a high interest account. Do not advance cash on your credit card and you must be disciplined. At the end of the interest free period, use the money in the savings account to pay off the credit card. The residue in the savings account is your profit (minus your direct debit minimum payments). Result ...you have made money for free!

When the 14 months is reaching its end you must then look at the rate you are getting on your savings. If it is more than the balance transfer rate then why not apply for another credit card, this time focusing on the longest 0% rate for balance transfers with the lowest balance transfer fee. Move your debt over and at the year you will still be in profit, although not by as much. Also watch out for special offers as occasionally the banks will run a promotion, like no balance transfer fees, although they are rarely open for long.

Now you might think it is still too little to bother with, but with four adults in the house, it becomes more interesting. As an alternative to a savings account, consider a regular saving account or a current account which offers a high rate for the first 2500. Always check terms and conditions and make sure you stick to them.

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