New low fee 0% money transfer credit cards unlock old trick to help you make free cash.
Stoozing was the name given to the savvy art of using a 0% credit card to make some easy free cash. It was very popular before the credit crunch, but has died off a little in recent years. However, a new set of cracking 0% cards from Virgin Money may help us see a resurgence of this clever credit card trick!
How to stooze
There have been a few different forms of stoozing over the years.
The original idea was incredibly simple. Snap up a credit card that allowed you to move your credit into your bank account, something called a money transfer. You would then move that cash into a savings account, and just pay off the minimum on your balance each month until the end of the 0% period. If all had gone to plan, by the time the 0% period ended you would have more than enough money in the savings account to clear that outstanding balance, with a healthy chunk of interest to enjoy too.
However, card providers cottoned onto the trick and started charging some significant transfer fees for money transfers, generally around 4%. That fee would make a pretty large dent into your profit from stoozing, making it a lot of hassle for very little return.
Can you stooze with Virgin Money?
However, Virgin's latest batch of cards which allow money transfers have some eye-catchingly low transfer fees. Could this be the boost to stoozing that we have been looking for?
Here's what the new deals look like.
|
Credit card |
0% money transfer period |
Money transfer fee |
|
36 months |
2.39% |
|
|
34 months |
2.29% |
|
|
32 months |
1.69% |
Here’s how much money you could make using the top Virgin Money money transfer deal, moving £5,000 and putting it into the top three-year fixed rate ISA from RCI Bank which pays 2.7% AER.
|
Credit card |
0% money transfer period |
Money transfer fee |
Cost of moving £5,000 |
Interest after 12 months |
Interest after 24 months |
Interest after 36 months |
Profit from stoozing |
|
36 months |
2.39% |
£119.50 |
£135 |
£273.65 |
£416.03 |
£296.53 |
Remember you will also need to keep up with the minimum repayments in order to keep the 0% offer.
The minimum repayment on this card is £25 or 1% of the remaining balance.
Who can stooze?
The art of stoozing can be tricky so it won’t be for everyone.
It’s only really feasible for people that are free of credit card debt and have a good credit rating.
You will also need to be disciplined enough not to spend any of the cash in the savings account, ensure that you keep track of when the 0% deal ends and be able to keep up with the minimum repayments to avoid losing your 0% deal.
You should also bear in mind that having large outstanding debt on a credit card makes you less able to borrow money at a competitive rate for something else like a mortgage or home improvement.
Other cards that can make you money
Stoozing can work with 0% purchase credit cards too.
You just need to aim for the longest-lasting 0% deal, do your normal spending on it and shift the money you would have used to pay for it into a high-interest savings account.
The benefit of this type of stooze is that there is no one-off fee that will eat into your profits. However the longest-lasting 0% purchase offer is just 27 months so you will have less time to make money before interest charges kick in.
If stoozing sounds like too much effort you might want to try a cashback credit card instead.
These allow you to earn money as you spend. The American Express Platinum Cashback Everyday Card for example pay 5% cashback in the first three months on spends up to £2,000. That means you can earn up to £100 – tax free.
Read The best cashback credit cards for more.
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