Credit card “stoozing” sounds illegal, but believe me as you read on you will probably find that there is a certain justice being brought about when it is applied to making money from credit cards and it’s all above board.
So what is “stoozing”? It is when you apply for two separate credit cards, which are offering a promotional deal with a 0% interest fee period, making sure that at least one of your new credit cards will let you transfer the balance into a bank account, so firstly make sure that you have a high savings account open at your bank, if not then simply transfer the money into your current account and open up a savings account afterwards.
So you will probably be wondering why have the second card? if you cannot transfer the balance straight into your bank account. Well what you have to do is ask the issuer of the second credit card to balance transfer from the first card onto the second credit card, this may seem back to front but this will move money from the second credit card to the first one, this transaction is seen as moving a negative balance on to the other credit card, so will work in reverse. Once this is complete you will then ask the issuer of the first credit card to transfer this on again to your high interest savings account.
Once this is all complete you will start to earn interest on money that has been basically given to you as an interest free loan.
There are things to watch out for though, because as you know things are never that simple when it comes to credit card companies. The first rule is always remember to pay the minimum payment each month and only pay the minimum as paying more will only eat away at your profits. The next stage that you will have to remember is a couple of months before the end of your 0% interest free period, start to search for a couple of more credit cards that have the 0% facility. Once your research has found two ready replacements, then about 5-6 weeks before the end of the first two credit cards, you should apply for the two replacement cards.
As soon as you receive both of these credit cards through the post, you will then use them to balance transfer the amounts in the new credit cards over to the first credit cards and clear them. If you may find that the balance transfer is not going to be processed in time, then your emergency battle plan should then come into effect, though this will mean taking the money from your savings account to pay the bill. This must be done because no matter what paying interest is not what you are doing this for.
Once the first set of credit cards are cleared make sure that you cancel the accounts with the credit card issuers and always ask them to tell the credit agencies that this has been done.
Your old debt will now be in the hands of the new credit cards with the original amounts still sitting pretty in your savings account, gaining more interest from the next set of 0% interest free credit cards and once they are coming to an end, you just simply follow the plan of action as before, but remembering to keep check of the terms and conditions on the credit cards that you have bought into.
More financial tips and advice can be read on financialbuzz.co.uk.