Friday, June 13, 2008

Credit Card Stoozing

Here's another idea for making extra money - credit card "stoozing". There are various versions of this, so I will describe the version that I am familiar with. To start off you need 2 credit cards, one of which should have an introductory 0% rate balance transfer offer (card 1) and another which allows you to pay into a bank account (card 2). From card 2 pay up to 90% of the credit limit of card 1 into a high interest bank account, or some other account which pays a high rate of interest. Then immediately transfer the same amount from card 1 to card 2. You can then cancel card 2. You will then be earning interest on the amount you transferred for the duration of the introductory period. Before the introductory period ends, you can either repay the balance from the high interest account, or if you are confident that your credit rating will allow it, apply for a further 0% balance transfer card to pay off the original card before you start paying interest. You can obviously continue this as long as you like.

However, there are some golden rules that you MUST keep to for this to work:

  • Do not use this method if you already have debt - whatever you pay in interest will be more than anything you gain in a high interest account, so you would actually gain more by paying off your debts first.

  • Make sure you pay off your 0% card before the introductory period ends otherwise you will start paying interest, which defeats the object.

  • Be aware that every application for a credit card leaves a trace on your credit history, so do not attempt this unless you are confident that you have a good credit rating. If you are rejected for your first application for a 0% card then do not immediately apply for another one. This will only damage your credit rating. It is best to leave it for several months (or longer) before trying again. If you are rejected again, then it is best to leave it altogether.

For more information and the latest on the best 0% credit cards visit the excellent

No comments: