Stoozing's the art of making money by cleverly manipulating credit cards - it was really popular in the early 2000s only to die in the wake of the credit crunch as great deals became hard to find. But now, with some of the best 0% spending deals we've ever seen and bank accounts paying interest of up to 5%, stoozing's BACK!
Here's our step-by-step guide showing exactly how you do it, the best 0% spending cards and interest-paying bank or savings accounts to use, and what to watch out for.
Best buys: Cards for spending
The premise - borrow free, earn £100s!
Stoozing's the art of making money out of 0% deals. It became the vogue of money nerds when credit card companies first launched 0% deals.
Martin broadcasted the first set strategy for it around 2000, and it works like this: Lots of cards lend new customers money at 0% (see options here). By grabbing this cash then saving it at as high a rate of interest as possible, you're earning interest on money they've lent you for free.
In stoozing's heyday, the amounts people could get were huge, with the biggest stooze-pot we heard about being £80,000 of 0% credit card debt (multiple cards, continually rolling onto 0% deals) which saved that stoozer nearly £5,000 a year as the money was offset in his flexible mortgage.
We're not quite back to the heyday of stoozing but with the credit card market the hottest we've ever seen, with plenty of long 0% spending deals and bank accounts paying interest of up to 5%, stoozing's definitely back.
And so is the true poetry of stoozing - which is when one bank has a great deal for borrowing AND one for saving, so you can profit from its own cash. This is as rare as it is beautiful but you can now do it with Santander 123 bank account and credit card.
Warning: Stoozing is ONLY for those who are debt-free & financially savvy. If you're not, avoid it as mistakes can be costly. If you're looking for more than just 0% spending, or you've debts, see our Credit Cards page for full options.
Who can do this?
Though lucrative, this technique is tricky, and not suitable for everyone. If you decide to give it a go, read this article in full, and make sure you understand the process, as mistakes can have a high cost.
Be credit card debt-free
Only use this technique if you don't have any credit card debts and have a decent credit score. Those who already have debts on plastic should use all available new credit to reduce the interest. Read the Best Balance Transfers guide.
Ensure you're on the ball
Do it right and this is risk-free. Yet stoozing isn't for the forgetful, ill-disciplined or inattentive. If that's you, stop reading now, as getting this wrong costs.
Consider cashback instead
If you're a little forgetful, or would just prefer a simpler way to make free cash, a more foolproof (but less lucrative) way to profit is simply using a cashback credit card and paying it off in full every month. For the current top picks, read the Best Cashback Cards guide, and see our Credit Cards page for more options.
How to stooze...
In a nutshell, the idea is to do your normal spending on an interest-free credit card, and let the dosh you'd normally be using build up in a savings account, earning interest. This is currently helped by the longest-ever interest-free spending card we've seen.
STEP 1: Get a card offering 0% on new purchases
The aim is to get the longest 0% spending deal you can and with possible added cashback rewards to boost your stoozing gains (don't confuse these cards with 0% balance transfers, which are for shifting debts).
Which cards'll accept you? The only way to find out is to apply, but that marks your credit file. So our Free 0% Purchases Eligibility Calculator shows your odds of getting each card, to minimise applications without hitting your file. All these cards are in it, except Tesco, which we can’t check for you.
The top 0% cards
The most profitable plastic here are the cards where the longest 0% spending period is combined with the most lucrative rewards programme.
Depending on your credit score and the amount you spend, this can be done with multiple cards. But it's best to start at the top and work your way down this list.
Longest 0% deal but doesn't have rewards
Post Office* - 25 months 0%
This new Post Office* card has the longest 0% period on spending we've seen - provided you make at least one purchase in the first three months, otherwise you'll get 16 months 0%. But, this shouldn't be an issue if you're using this card to stooze - your aim should be to start spending on the card immediately.
Need to knows
- If you don't make a purchase in the first three months, you'll only get 16 months 0% on spending.
- Make sure you fully repay the card by the end of the 25 months or you'll be charged 18.9% interest on any remaining balance.
- If you're accepted you'll get the full 25 months 0% deal. Unlike some cards, Virgin Money doesn't give poorer credit scorers a lower number of months at 0%.
Next longest 0% deal
Virgin Money* - 24 months 0%
This Virgin Money* card is one month shorter than the market-leading card above, and gives you a full two years to spend without paying the balance off in full.
Need to knows
- Make sure you fully repay the card by the end of the 24 months or you'll be charged 18.9% interest on any remaining balance.
- If you're accepted you'll get the full 24 months 0% deal. Unlike some cards, Virgin Money doesn't give poorer credit scorers a lower number of months at 0%.
Next longest 0%, plus up to 3% cashback on spending, but £24/yr fee
Santander 123* - 23 months 0%
For MoneySaving poetry nothing beats getting the Santander 123* credit card and use it for stoozing with Santander 123 bank account (more on this below). Not only has it got a whopping 23-month 0% spending period, but it also offers up to 3% cashback on certain spending.
Need to knows
- You earn 3% cashback on fuel & rail spending (max £9/mth), 2% in department stores & 1% in supermarkets. See a full review of the cashback you can get with Santander 123.
- It has a £24 annual fee, although if you have a Santander 123 bank account it's refunded in the first year. See the Best Bank Accounts guide for full details on the 123 current account.
- Once the 23 months is up you'll pay 12.7% interest on spending (16.5% representative APR, including the annual fee).
Long 0% deal, plus you earn rewards on spending
Tesco* - 21 months 0%
The Tesco* Clubcard Credit Card offers 21 months 0% on purchases. Plus, the card also rewards you with Tesco Clubcard points on spending.
Need to knows
- You'll earn five points for every £4 spent in Tesco stores/fuel and 1 for every £4 spent elsewhere, which you can redeem for Tesco Clubcard Rewards.
- After 21 months fully repay the card or you're charged 18.9% APR interest. Poorer credit scorers might get 21.9% or 25.9%.
Long 0% spending deal, but not everyone will get it
Halifax* - Up to 21 months 0%
This Halifax* card also offers up to 21 months 0% on purchases, but only 51% of applicants have to get the advertised deal - the rest could get 16 or 14 months. Fortunately, you can check how likely you are to get the card but it won't tell you how many months you'll get.
Need to knows
- You can't apply for this card if you already have a Halifax card.
- We say 'up to' 21 mths as some may get 16 or 14 months 0% depending on credit score.
- After 21 months, the interest jumps to 18.9% but some might get 21.9% or 25.9%.
Next longest 0% deal and you'll get the full 0% period if accepted
Clydesdale/Yorkshire* - 20 months 0%
This card from Clydesdale* gives 20 months 0% on spending and is a good alternative if you can't get the cards above. But it doesn't offer additional perks, such as reward points, like the Tesco or M&S credit card. So if you're after a card with a few perks look at the other cards listed.
Need to knows
- Yorkshire Bank* also offers the same 20 month 0% deal, as it is part of the same banking group (National Australia Group).
- Make sure you fully clear the card by the end of the 20 months or you'll be charged 18.9% interest on any remaining balance.
Good if you're an M&S shopper, earn M&S points on spending
M&S* - 19 months 0%
The M&S* card also offers 19 months 0% on all spending, and is a good alternative if you can't get the cards above. Plus you'll earn M&S points on your spending, good if you like to shop there.
Need to knows
- You'll earn 1 point for every £1 spent in M&S stores, and 1 point for every £2 spent elsewhere. These points are then converted into M&S vouchers every three months.
- After 19 months, the interest jumps to 18.9%, so make sure you repay the card before the 0% period ends.
Don't get card protection insurance
Payment protection insurance is commonly sold with credit cards – the idea is it'll make some payments for you, usually for a year, if you are unable to (eg, if you lose your job).
When properly using a card for stoozing, there's no need to tick the box for this policy. It's unnecessary. If there's a problem, you can pay off this debt with the savings.
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STEP 2: Follow the Golden Rules of Stoozing
Once accepted, use the card for everything you buy; replacing all credit card, debit card, cheque and cash spending up to the credit limit – though never withdraw cash as you're charged interest.
As all spending is on the credit card, cash isn't withdrawn from your current account, allowing unspent wages to build up. This means the debt on the credit card will be matched by extra cash in your current account – and this forms the stooze pot you can use to save.
However there are a few safety rules for doing this:
Don’t exceed your credit limit. That can result in you losing the 0% deal and hurting your credit score.
This isn’t an excuse to overspend. We’re just using it as a method to build up savings to match the stooze pot.
Only make the MINIMUM repayments. Don't try to repay this card in full. Just set up a direct debit to make the minimum monthly repayments, usually around 2% of the outstanding balance. Don't miss any payments, or you could lose the 0% promo offer, messing up your entire stooze.
Never withdraw cash on these cards. That isn’t at the cheap rate, you will pay interest even if you clear in full, and it can impact your credit score.
STEP 3: Earn max interest on the debts
You now have debts on the credit card, and approximately same amount in credit in your current account.
It’s time to maximise the interest you earn by moving the money into the highest interest savings vehicle possible. Don't wait for the cash to build up, just siphon it off into the savings account as soon as possible.
Just ensure it's easy access, so you can pay the card off whenever needed.
Where to save the cash
The top savings rates right now come from current accounts as banks are fighting to lure in new banking customers (bank accounts are big business for banks as once you're a customer they can cross-sell you a range of financial products).
Alternatively, to combine risk-free easy access and a high rate, use the top-paying tax-free cash ISA. These allow every UK adult to save up to £15,240, and pay no tax on the interest earned. If you've used up your ISA allowance and don't want to use an interest-paying bank account, put the money in the best-paying Instant Access Savings account.
Anyone with a flexible or offset mortgage, where money can be deposited and taken out at will, should simply pay all the cash into that. The mortgage interest reduction outweighs even the best cash ISA returns.
Top paying current account
If you're stoozing a larger amount, the Santander 123 account gives up to 3% interest if you have between £3,000 and £20,000, plus you can earn up to 3% cashback on your bills. You'll need to pay in at least £500/month and set up a minimum of two direct debits (plus pay the £2/mth account fee).
To get the full benefit you may want to move all your cashback eligible bills over. And with this bank account you can make sweet poetry too, as you can combine it with Santander's 123 23-month 0% spending card. It's got a £24 annual fee but that's refunded in the first year if you have this Santander 123 bank account too.
Another alternative is the TSB Classic Plus account which pays the highest interest on smaller amounts, paying 5% on the first £2,000 that’s in your account. Plus, if you switch current accounts to them, you'll get an extra £100. You'll need to pay in £500 every month to hold the TSB account.
Top cash ISAThe current open-to-all highest-paying cash ISA that allows access whenever you need it is the Defined Access E-ISA account from Virgin Money. It pays 1.51% AER variable, from a £1 and you can transfer in previous years' ISAs too.
For full details, plus all the alternatives, see the Top Cash ISAs guide.
Easy access savings account
The highest-paying standard savings account is the Online Extra account from BM Savings*, paying 1.6% AER. There's also a bonus on the account, which means you're effectively guaranteed a minimum rate for a fixed length of time – but after 12 months, when the bonus drops, you'll need to switch accounts to a higher payer.
The credit card debt is now at 0% and the savings hopefully at 3% or 5%. Now, diarise the date the 0% ends, and sit back while earning interest.
STEP 4: Increase your profit
When the end of the 0% period approaches, you can choose to simply pay off the debt with the savings and bag the gains. Or you could shift the debt again to another cheap balance transfer to keep earning interest on the savings.
If you take the second option, always try to grab the balance transfer card with the lowest fee possible. Balance transfer fees used to be around 2-3%, but are now a lot lower so that can make it worthwhile - some even have no fees to transfer a balance. Check the current top low-fee balance transfer offers.
Plus, you can restart the whole scheme with another new card at the same time. It's possible to do this whole system with two, three or four cards consecutively.
Will it hit your credit score?
Most lenders' scoring systems aren't sophisticated enough to detect that you're playing this free cash gain.
Yet multiple, clustered applications, and high outstanding debts, even at 0%, will diminish your ability to get competitive credit, so always spread card applications out.
In stoozing's early days, some people got huge amounts at 0%. Now lending criteria is tighter, so it's best to start small and not overstretch yourself (read the Credit Scoring guide).
The Stoozing Calculator
IMPORTANT NOTE: The longer you take to build up the full amount of debt, the less accurate the figure below will be. Also, if you switch to a 0% balance transfer after the initial interest-free period, you'll need to take any one-off fee into account.
A note for the curious: Where does ‘stoozing’ come from?
This isn't a fly-by-night system. Martin first broadcasted a strategy for this in early 2000, as 0% credit card interest rates began. Many who started back then now report £1,000s in total gains.
As the number of 0% cards increased, so did the number of people taking advantage. The commonly used name is 'stoozing', used to describe any technique to profit out of playing credit card companies' deals.
We gather a couple of years after the technique started, the term gained common usage in The Motley Fool website's forums, due to a contributor there called Stooz. Yet regardless of whether it's ‘free cash' or ‘stoozing', either way, hopefully it'll be cash in your pocket.