A Guide to Credit Card Stoozing

How to Earn Money by Taking Out 0% Cash Balance Transfer Cards

Sep 21, 2009 Carol Finch

In recent years a lot of consumers have been earning extra cash by a process known as stoozing. This involves using a 0% credit card deal to save money rather than spend.

For some savvy consumers getting a new 0% balance transfer deal is not about repaying debts or buying something interest free. For those in the know this kind of deal can also be a way of making money rather than spending it. The process of credit card stoozing, used correctly, can see a consumer earn interest on money they borrow without having to pay interest on it.

How Does 0% Balance Transfer Stoozing Work?

This is actually an easy process to master but it takes organisation. In order to make this work a consumer will need to:

Find (and get approval for) a 0% balance transfer credit card deal that allows them to take the transfer as a cash sum or as credit card cheques.
Find and open a savings account that pays as high an interest rate as possible.
Deposit the transfer sum into the savings account.
Pay the money back to the card company when the balance transfer deal is close to its end to avoid being charged interest.

Those that make this work for them are then left with a sum of interest in the savings account. Given that it is possible to get balance transfer deals that can last for 12 months+, this can add up to a decent sum that they are basically getting free of charge. Using tax free savings methods could also see them not have to pay interest on the money they earn into the bargain.

How to Make Sure That Credit Card Stoozing Earns Money and Doesn't Cost Money

This process will only work if the consumer makes sure to:

Pay the balance transfer sum back to the credit card provider before/when it is due. If they forget to do this or pay later than the date of their deal close then they may lose some of the money they earned in interest charges.
Make sure to pay the minimum repayment set by the card provider every month. It is essential to do this on time otherwise they may void the 0% deal and the card may start charging its standard interest rate.
Make sure to use a savings account that will allow them to withdraw the cash without penalty when they need to. Some higher interest accounts have withdrawal limits or conditions that, once broken, could result in a cut in interest paid.

A few years ago, stoozing on a regular basis was very popular with some consumers. Some went from deal to deal and others had multiple deals going on simultaneously. It's hardly surprising that card companies got wise to what was going on and they, and the current economic climate, have made it harder to do this on a constant basis. Taking out credit card deal after deal may also not look so good on a consumer's credit record so this kind of practice may be best used on a one-off or occasional basis.

The copyright of the article A Guide to Credit Card Stoozing in Personal Budgeting/Finance is owned by Carol Finch. Permission to republish A Guide to Credit Card Stoozing in print or online must be granted by the author in writing.

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