How to Make Money from Credit Cards

"Stoozing" is Using Credit Cards with 0% Interest to Gain Free Cash

Oct 3, 2008

Many credit cards offer new customers use of the card with no interest for a period of time. Using this, and investing the money saved, means free money!

Anyone can take advantage of credit card companies' offers of a new card at 0% interest. Those who do this pay off the card at the end of the month, and save the money at as high a rate of interest as possible, end up making money from their credit cards. This is now known as “Stoozing”.

Who Can “Stooze”, or Make Money from Credit Cards?

Prospective stoozers need to have a good credit rating in order to obtain new credit cards easily. This should also only be attempted by people who have no credit card debt. Those who do should pay it off as quickly as possible, since credit card interest rates are high, and they would be better off borrowing from a different source. And stoozing is only for the disciplined; those who are forgetful or inattentive will end up paying money to the credit card companies…which is what they want!

Simply Spend Using the Card…then Save the Money

The simplest method of making money in this way is to get the new card, and during the interest-free period, use the card for buying everything. One can then set up a direct debit to repay just the minimum payment. The money which is building up by this method can be put into a high interest savings account, which will earn interest.

This is not a licence to spend more, and one should be careful never to go above the card’s limit. Also, the stoozer should not use the card to withdraw cash, as they will be charged for that.

What to Do at the End of the Interest Free Period

The stoozer needs to keep as eye on his or her diary, and remember when the 0% interest period comes to an end. At this point he can simply pay off the debt from the savings account, and keep the interest…the free money gained from doing this.

However, a better method is to move the debt to another card which offers 0% balance transfers, thus leaving oneself earning even more interest. At the same time it is possible to re-start the whole system again with another new card offering 0% borrowing…it is important not to confuse 0% borrowing with 0% balance transfer – they are different. It is possible to do the whole thing with several cards consecutively for a number of years.

One stoozer borrowed £80,000 in this way, netting himself nearly £5,000 a year in interest!

One needs to be careful to do this successfully, but as a way of making money during the credit crunch – and at other times – stoozing can’t be beaten!

Source

The copyright of the article How to Make Money from Credit Cards in Personal Budgeting/Finance is owned by Helen Krasner. Permission to republish How to Make Money from Credit Cards in print or online must be granted by the author in writing.