The word “stoozing” will probably bring back memories for many people who were taking out credit cards ten to fifteen years ago. It was a peculiar phenomenon where, by borrowing money from one institution before depositing it with another with a higher rate of interest, they could basically make money for nothing. So, is stoozing still possible today?
Stoozing: How It Works.
If you wanted to stooze, here’s how you would do it. Firstly, you would embark on a meticulous search for the most attractive credit card deals; think the 0% introductory rates that, back then, many providers were offering in their bid to attract new customers. You would then take out the cash and place it into the highest-paying deposit account possible. Now, provided that the borrowed cash was repaid to the card before the 0% period elapsed, the stoozer would have made money thanks to the gathered interest.
Examples Of Successful Stoozers
It’s fair to say that many stoozers certainly benefitted from the combination of attractive introductory deals and high savings rates that were abundant in the market at the time. This helped to make stoozing appealing even despite the necessary hefty paperwork and clever timing. One man reportedly pocketed nearly £5,000 a year in interest by stoozing £80,000 just ahead of the credit crunch, while another man used his stoozing proceeds to offset a flexible mortgage, resulting in his monthly mortgage payment being trimmed by £300.
Can You Save £5,000 Annually By Stoozing?
Numerous factors shorten the chances of budding stoozers today – including the lack of credit cards enabling payments to a current account or other bank account for earning interest. By contrast, such balance transfer cards were in large supply during the “heyday” of stoozing. Worse, the few cards that do offer this facility tend to apply handling charges to such transfers. Typically, the currently low savings rates mean that the transfer charge would cancel out any interest rate that would be applicable even before tax.
Nonetheless, there remain good reasons for optimism if you still cling to the possibility of making decent returns from stoozing. For a start, the worst is long behind us as far as the economy is concerned – meaning that credit cards with 0% deals are now much more readily available than they were during the dark days of the recession. Furthermore, saving rates are likely to increase, if gradually – meaning that, yes, stoozing could make a serious comeback before too long. But you don’t necessarily have to wait before stoozing…
A Potentially Effective Stoozing Technique
If your credit rating is good to excellent, you can take out a credit card that temporarily charges no interest on purchases. You can then use the card to make big purchases that you would otherwise have made using funds from your current account. After the end of the 0% interest period, the card will return to the high APR, and you can then earn interest on the cash that you would otherwise have spent.