Stoozing: making money with a credit card

make money credit cards

The 0% deal is one of the most useful and most used credit card rewards around.

0% offers are best known for giving cardholders the opportunity to borrow for free or repay credit cards, high-interest overdrafts or loans for less but they can also be used to make money using crafty techniques known as stoozing.

What is stoozing?

Simply put, stoozing is a way to turn a profit on borrowed money.

We've all heard the phrase 'you need to have money to make money'.

Stoozers agree but with this addendum: 'you don't need to have it forever'.

Of course, there's some small print between borrowing at 0% and pocketing extra cash.

First, there's the fact that this money-making trick requires successful applications to some of the UK's top credit card deals.

That means stoozers need an excellent credit rating to get going. To see what that phrase actually means click through here, to our credit check and repair guide.

Second, stoozing requires discipline and faultless credit card behaviour. For example, while carrying out this trick cardholders cannot:

Anyone who won't be able to stick to those basic rules will never be able to make money through stoozing.

For those that can, here's how it's done.

Pay attention class: this is just a little bit complicated.

Stooze 1: 0% purchases + savings

The premise of this technique is extremely simple: just use a 0% purchase credit card (more information here, for those unsure about these deals) to pay for as much as possible.

While the credit card balance builds up and the cardholder continues to make the credit card's minimum monthly payments, the cardholder puts all the cash that they're not spending - i.e. their current account balance which is usually used for everyday expenses - into a high-yield savings account.

In other words, as a credit cardholder, the stoozer is spending for 'free'.

As a saver, however, they're raking in interest.

Still confused? Here's how it works step by step.

How stoozers use purchases deals:

Making a profit:

To make money, cardholders need to continue with this trick for as long as possible.

Here are some of the longest introductory periods on purchases currently available:

0% on PurchasesRewards
aa dual credit cardAA Dual Credit Card
0% for 32 mths
Representative example: When you spend £1,200 at a purchase rate of 18.9% p.a. (variable), your representative APR will be 18.9% APR (variable).
AA Credit Cards are provided by Bank of Ireland UK. AA Financial Services Limited is a credit broker and not a lender.
nectar purchaseNectar Purchase
0% for 31 mths
Up to 2 Nectar points each £1 spent
Representative example: When you spend £1,200 at a purchase rate of 18.95% p.a. (variable), your representative APR will be 18.9% APR (variable).
dual offerDual Offer
0% for 30 mths
Earn Nectar points
Representative example: When you spend £1,200 at a purchase rate of 18.95% p.a. (variable), your representative APR will be 18.9% APR (variable).

For a wider selection of credit card deals see our main table here.

Unfortunately, though, the longest 0% purchases deals often require excellent credit ratings.

It's worth noting that collecting credit card rewards during this technique can also boost profits, although the 0% deal remains the most important card facility.

In addition, 0% purchase credit cards are no good for using for cash transactions like ATM withdrawals, checkout 'cash back', foreign currency, shopping vouchers, gambling (including buying food and drink at a casino) etc.

Paying to make these transactions eats straight into profits.

Finally, to make this technique profitable it's very, very important that the cardholder keeps up with minimum monthly repayments, is very careful not to exceed the credit limit and doesn't spend the savings amount so the balance can be repaid in full before the 0% period ends.

Stooze 2: 0% money transfer + savings

Just as above, with this technique the cardholder 'borrows' money from a 0% money transfer credit card and stores it in a high-yield savings account.

When the 0% balance offer is up, they simply take the cash out of the savings account, pay off the credit card and pocket the interest.

The downside is that making a mistake - for instance, withdrawing money from the ATM with the credit card which is expensive and not covered by 0% purchase or 0% balance transfers - could easily capsize the whole technique and make it worthless.

With that in mind, then, here's it works step by step.

How stoozers use 0% money transfers:

How to do it profitably:

As with the deal above, a money transfer, also known as a super balance transfer, can be hard to get hold of.

Here are a couple of the current options available. Click through to the provider websites for specific application criteria:

Money Transfer to Current AccountTransfer Fee
virgin money 41 month balance transferVirgin Money 41 Month Balance Transfer0% for 41 months
Representative example: When you spend £1,200 at a purchase rate of 20.9% p.a. (variable), your representative APR will be 20.9% APR (variable).
clubcard balance transferClubcard Balance Transfer0% for 40 months
Representative example: When you spend £1,200 at a purchase rate of 18.94% p.a. (variable), your representative APR will be 18.9% APR (variable).

For more options see our main table here.

To make a profit from this form of stoozing, the high interest savings account must offer a rate of interest higher than the balance transfer fee of the credit card.

For example, if there's a 4% fee for moving the balance, the savings account needs to offer more than 4% interest over the duration of the 0% period.

Here are the sums (approximately!) for transferring and saving £1,000 for 12 months:

The problem at the moment is that there's a dearth of savings accounts with high enough interest rates to make a significant amount of cash.

Our guide here on how to get the best rate on savings is worth a look and could help but it's a tough market and stoozers need to bear in mind that they'll need to be able to access all the cash quickly to repay the card: great rate or not a four year bond isn't going to work out.

It used to be possible to move another balance from a 0% balance transfer credit card to a super balance transfer credit card, hugely increasing the money available to earn interest on but also increasing expenses substantially.

Now the extra costs mean that's difficult, if not impossible, to make a profit from these types of credit card offers.

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