Should I Stooze Again – even if I don’t need the money

I received a letter from one of my stoozing credit cards offering my a 0% Balance Transfer Offer for 24 months. If I don’t need the money, but should I take it anyway?

I’ve stoozed before over the years and it’s always worked out for me – I get the cash now to invest elsewhere, I make the monthly payments and when the time comes for the remaining balance to be repaid, I either pay for it out of cash. It’s a simple way to make some free money, risk free*.

Quick Recap – What is Stoozing?

Stoozing is where you borrow money cheaply that you don’t really need and use it to earn a better return elsewhere. In the past, I took out 0% APR deals and pumped the money into my offset mortgage at 5.25%. On £10,000 that’s £525 a year in savings. You could also invest that money in the stock market if you like risk and sell your investments to make the payment at the end.

There’s often a balance transfer fee (in my case 2.9%) which needs to be factored in but it’s fairly easy to construct a calculation of what the cost is and the value of that money.

Risk Free Return

To calculate the value of the money, it’s good to know where will the money end up. In the old days my mortgage was 5.25%, so a 2.9% fee breaks even within a year. Beyond a year you are in the money. My mortgage is the only permanent debt that I have and at 1.79% it’s not that high. In fact, with the 2.9% balance transfer fee and using that money to overpay my mortgage works out at around the value as my mortgage (2.7% saving vs. 2.9% fee). This means if I did stooze it would end up costing me money (based on the RFR of 1.79%).

0.2% – My 2 Red Cents

On £10,000 this works out as £20 – a trivial sum in the scheme of things. But what is the real value of having that easing of cash flow? I feel that I could, with a bit of extra cash, invest the money and do better than 1.79%. I’ve even been a bit naughty recently and used my arranged overdraft at usurious rates of 39.9% – always only for a few days and also cost benefit analysed (money invested in side-hustle) – but the fees have ended up costing me a few quid. Stoozing would also be cheaper than the personal loans I’ve taken recently which were at 2.9% and 8.9% APR – so this is a cheaper money.

Credit Record

Another thing to consider is that I want to re-mortgage my £130,000 mortgage in 2 years and I need a squeaky clean credit record to get what I want which is an offset mortgage at 0% APR for £260,000. I can then use this extra money to invest and become even richer! (That’s the dream anyway but the truth is that I’d like to get a good rate, offset if possible, maybe increase the mortgage size and save money overall). Will stoozing affect my chances?** The truth is; it’ll probably only help as it shows that I’m a responsible debtor.

So Should I Stooze Again?

I did say recently that I have a very strong cash flow position at the moment but, there’s always ways to invest your money. I’m also considering buying an electric car with company cash and the money might soften the blow. I’d be interested in other people’s opinions on this. I was considering stepping away from the precarious life of a monetary bulimic who as soon as he has money in his current account is splurging it on investments here there and everywhere.

So what do you think? Stooze again or just not bother?

Thanks, GFF

*It’s not exactly free, and it’s not exactly risk-free – especially if you get into the spending habit and end up deeper in debt.

**Credit checking agencies don’t give a toss about how much wealth you have – just how much debt you have and how likely you are to pay them back. They will care more about unpaid parking tickets than you having a million pound ISA portfolio.

13 Comments

  1. We have been stoozing for many years but the most we can borrow, keeping within a reasonable proportion of the credit limits, across a few cards is less than 1% of our net worth so it doesn’t seem worth the hassle anymore. Still I keep doing it to ‘preuse’ annual ISA allowance in advance of an expected large inheritance but once that happens I will repay the cards and stop stoozing once and for all. Unless like you I see a good offer that makes me reconsider..

    Liked by 1 person

  2. Maybe put the stoozing profit into a Junior ISA or SIPP as it will be a more meaningful proportion of a child’s net worth and they are unlikely to already have enough money? Fidelity don’t charge any child account fees if you stick with OEIC funds.

    Liked by 1 person

    1. JISA and JSIPPs – that’s a whole different story.
      The Lady objects to giving enough money to the kids for them to blow once they are 18. JSIPP is confusing, access from 2070+ for my kids. Too far away IMO

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      1. Nice thing about opening a Fidelity Junior SIPP now is that it might give them a protected retirement age of 55. We do both but the JISAs have done rather better than expected so any new contributions go into their SIPPs. I figure it’s a simple way of getting excess money out of our estate rather than taking our AIM portfolio ISAs to protect against inheritance tax.

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  3. I’ve been doing this of late mainly for cashflow purposes as my tax position was getting messy having gone freelance gently.

    Prior to that I do did have fee free infinity stooze going on dumping the funds in stablecoin interest accounts but unfortunately that door recently closed and I can’t be bothered to invest too much serious effort into it anymore.

    Liked by 1 person

  4. I stooze when I can get a 0 fee and 0% for a decent period. Any free cash that I get is usually allocated to treats or the smaller monthly bills. I keep a legacy credit card with a high credit limit for transfers and I’ve been known to perform a large money transfer and at the same time use a 0% and 0 fee balance transfer offer on to a new credit card. The result is about 10k of cash on 0% for at least a year.

    Sometimes there arealso cash incentives or Amazon vouchers for taking out a new 0% card. Double free money.

    Liked by 1 person

  5. Don’t forget about the free money for switching bank accounts either. Halifax are offering £125 and I’m switching an old Tesco current account that was going to be closed soon anyway. Just make sure you meet any funding requirements.

    Liked by 1 person

      1. It’s always good to have a couple of spare current accounts for switching purposes. I never switch my main account. The switching gains aren’t huge but along with some stoozing it will probably pay for a lot of my son’s Christmas presents. The Halifax offer looks good as you don’t need a certain amount of directs, you just need to fund it by a certain amount each month which is really simple with faster payments …. straight n then straight out again.

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