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Stoozing - make free cash Earn interest from 0% credit cards

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You can make £100s of profit by cleverly manipulating credit cards!

During the credit crunch, this got trickier as banks reined in lending. Now the purse-strings are loosening, with some of the best 0% deals we've ever seen - revitalising the art of stoozing!

The premise - borrow free, earn £100s!

Loads 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.

But if you're looking for more than just 0% spending, or you've debts and don't think stoozing is for you, 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 fool-proof (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.

This requires discipline, and is absolutely NOT a way to spend more than you would have anyway – it's a money-making recipe. So don't overspend and never breach the card's credit limit.

STEP 1: Get a card offering 0% on new purchases


Many cards offer new customers short-term 0% offers on all purchases (don't confuse these with 0% balance transfers, which are for shifting debts).

credit card in handOnce accepted, use the card for everything you buy; replacing all credit card, debit card, cheque and cash spending – though never withdraw cash as you're charged interest.

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.

Tesco: 0% for 19 months on purchasesPlus earn Tesco Clubcard points

  • 0% on spending for: 19 months
  • Representative variable APR: 18.9% APR (Official APR Example)
  • Min income: £5,000
  • Card issuer: Mastercard
  • Min repay: Greater of 1% of balance plus interest or £25

The Tesco* Clubcard Credit Card gives 0% for 19 months on new purchases. After this, it's 18.9% representative APR.

  • Spending rewards. Every time you spend, you accrue Tesco Clubcard points – 5 for every £4 spent in Tesco stores and 1 for every £4 spent elsewhere. If redeemed for Tesco Clubcard Rewards, they're worth about 3p each, making this equivalent to a 0.75% cashback card.

Tesco often has special deals where you can collect extra Clubcard points, and sometimes even make a profit. For more information read the Boost Tesco Clubcard Points guide.

Santander 123* - 18 months 0%BUT £24/yr fee

  • Spending length: 18 months 0%
  • Annual fee: £24 a year
  • Interest on spending: 12.7% (16.5% representative APR incl. fee: Official APR Example)
  • Card issuer: Mastercard
  • Min income: £7,500
  • Min repay : Greater of 1% of balance plus interest or £5

The Santander 123* credit card, which was already a cashback best-buy buy offering up to 3% cashback on certain spending, now also offers 18 months 0% on spending (plus you can use our eligibility checker to see if you'll get the card).

But it has a £24 annual fee, so you need to carefully weigh up if your planned spending would exceed this in cashback terms - you'd likely need to be a big petrol spender to 'win', though existing Santander 123 bank account holders get year one's fee refunded.

The 123 card pays 3% cashback on fuel & rail spending (max £9/mth), 2% in major department stores & 1% in major supermarkets. There's also a bonus of 1% cashback for flights, hotels and travel agent bookings made between 1 June and 31 August. See a full review of the cashback you can get with Santander 123.

Once the 18 month 0% is up you'll pay 12.7% interest on spending (16.5% representative APR, including the annual fee), so make sure you've paid it off by then, or you're ready to shift the debt to a balance transfer card.

Santander* - 18 months 0%Joint longest term purchase card

  • Spending length: 18 months 0%
  • Rep variable APR: 18.9% (Official APR Example)
  • Card issuer: Mastercard
  • Min income: N/A
  • Min repay : Greater of 1% of balance plus interest or £5

Another long 0% spending card available is the Santander* 18-month purchase card. If accepted the 0% term won't vary according to your credit score - everyone accepted gets the full 18 months.

Once the 18 months is up it switches to 18.9% representative APR, so make sure you've paid it off, or you're ready to shift the debt to a new balance transfer card.

This card doesn't offer rewards on spending, so if you spend a small fortune in supermarkets or on petrol and the fee's worth it, then the Santander card above may work out better.

Clydesdale/Yorkshire - 17 months 0%Full 17 months on purchases if accepted

  • 0% on spending for: 17 months
  • Representative variable APR: 18.9% (Official APR Example)
  • Card issuer: Mastercard
  • Min income: N/A
  • Min repay: Greater of 1% of balance plus interest or £5

The ClydesdaleYorkshire Gold credit card offers 17 months 0% on all spending. If you're accepted, you'll definitely get the full 17 months, as opposed to the Halifax card below, where some people will get fewer months if their credit score isn't so good.

Clydesdale and Yorkshire are part of the same banking group, which is why they have the same deal on this credit card.

When the 0% deal ends, the rate goes to 18.9% representative APR on any balance you have left over, so make sure you've paid it off by then, or you're ready to shift the debt to a new balance transfer card.

The card doesn't offer any other perks, so if you're after extra benefits or rewards on your credit card spending, look at the other cards listed in this guide, such as Tesco or Santander.

17mths 0%, but only for top credit scorers Halifax, only for 51% of applicants

Barclaycard Platinum
  • 0% on spending for: 17 months
  • Representative variable APR: 16.9% (Official APR Example)
  • Card issuer: Mastercard
  • Min income: N/A
  • Min repay: Greater of 1% of balance plus interest or £5

The Halifax All in One card has 0% on purchases for 17 months. However only 51% of applicants will get this, the rest will either get 12 or nine months at 0%.

Card providers only have to give the advertised representative APRs to 51% of applicants. Halifax has taken this a step further and is only offering this 17-month deal to 51% of those accepted. The rest will either get 12 or nine months at 0%. So only apply for it if you have a top credit rating, otherwise take a look at the other options.

If you don't get the 17 month deal it'll be either 23.9% or 25.9%. So make sure you've paid it off, or you're ready to shift the debt to a new Balance Transfer Card.

Sainsbury's- 16 months 0%Plus earn nectar points on spending

  • 0% on spending for: 16 months
  • Representative variable APR: 16.9% (Official APR Example)
  • Card issuer: Mastercard
  • Min income: N/A
  • Min repay: Greater of 1% of balance plus interest, 2.25% or £5

The Sainsbury's Nectar* credit card gives 16 months 0% on new purchases and balance transfers.

  • Spending rewards. Every time you spend, you also earn Nectar points - 2 points for every £1 spent in-store at Sainsbury's or at a Sainsbury's petrol station. Other spending earns 1 Nectar point for every £5.

When the 0% deal ends, the rate goes to 16.9% representative APR for both purchases and transfers, so make sure you've paid it off, or you're ready to shift the debt to a new balance transfer card. Some poorer credit scorers may get 19.9% or 22.9% APRs.

M&S: 0% for 15 months on purchases Plus 0.5% back in vouchers

  • 0% on spending for: 15 months
  • Representative variable APR: 16.9% APR (Official APR Example)
  • Card issuer: Mastercard
  • Min income: N/A
  • Min repay: Greater of 2.5% or £5

The M&S* Credit Card offers 15 months 0% on spending. After this the rate jumps to 16.9% representative APR.

  • Spending rewards. You also collect points as you spend which will be converted into Marks & Spencer vouchers quarterly. You get 0.5% back on most purchases (50p per £100 spend) and 1% when you spend in M&S.

M&S, like many other banks, tries hard to sell you other products and memberships once you are a customer. Be wary and make sure you really need something and can't get it cheaper before parting with cash.

  • 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: Make the minimum repayments only


Don't try to repay this card. Just set up a direct debit to make the minimum monthly repayments, usually around 2% of the outstanding balance. 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, which can then be moved to a high interest savings account.

However, always make sure you make at least the minimum payments – 0% interest doesn't mean nothing to repay. If you miss a payment, you could lose the 0% promo offer, messing up your entire stooze.

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, siphon it off into the savings account as soon as possible.

Always ensure it's one giving you access to the cash whenever you need it, in case you have to pay off the credit card bill quickly.

Where to save the cash

pounds pyramidTo combine risk-free easy access and a high rate, use the top-paying tax-free cash NISA. These allow every UK adult to save up to £15,000, and pay no tax on the interest earned. If you use up your NISA allowance, 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 NISA returns.

  • Top cash NISA

    The current open-to-all highest-paying cash NISA that allows access whenever you need it is the ISA Extra from BM Savings*. It pays 1.55% AER from £1 and it allow transfers in of previous years' (N)ISAs. You can also make unlimited withdrawals from the account.

    For full details, plus all the alternatives, see the Top Cash NISAs guide.
  • High paying current account

    Some current accounts are now paying a higher rate of interest than they're offering on their savings account, and the great thing is, you don't even need to switch your entire banking to get the high rate. If you think about these accounts like a 'regular saver' then you could earn big.

    The  Nationwide FlexDirect account pays a higher rate of 5%, but only on the first £2,500. Likewise, the TSB Classic Plus account pays 5% but on a smaller amount of money - the first £2,000 that’s in your account. Neither accounts require you to set up any direct debits, but you do need to credit the TSB account with a minimum £500/month and £1,000/month with Nationwide. For full details see our Best Bank account guide.

    Or, if you are stoozing a larger amount, the Santander 123 current account gives up to 3% interest if you have between £3,000 - £20,000, plus you can earn up to 3% cashback on your bills. You'll need to pay in at least £500 a month and set up a minimum of two direct debits. To get the full benefits you may want to move all your cashback eligible bills over.

  • Easy savings account

    If you've already filled your cash NISA allowance or don't want to put your cash in the top paying bank accounts, the highest-paying standard savings account is the Coventry BS Post Save Easy Access account, paying 1.4% AER. It's a variable rate, so be prepared to ditch and switch if it drops. It allows 12 withdrawals a year.

    Coventry BS shares its £85,000 FSCS protection with Stroud & Swindon Building Society. See more information about the Savings Safety rules.

The credit card debt is now at 0% and the savings at hopefully 5%. Now, diarise the date the 0% ends, and sit back while earning interest.

Simple reminders for card tarts!

Enter the date your 0% (or other intro rate) expires in the Tart Alert Tool and you'll be sent a text or e-mail reminder to ditch and switch. Of course, like everything else on this site, it's completely free.Try it now →

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. Fees are around 2-3%, so they usually can't be beaten by the savings rates by much. 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. dart board

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% (the biggest reported was £80,000 of credit pre-credit crunch – netting that stoozer nearly £5,000 a year as the money was offset in his mortgage).

Now lending criteria is tighter, so it's best to start small and not overstretch yourself (read the Credit Scoring guide).

The Stoozing Calculator

To give an idea of how much you’d make, we’ve built a simple calculator. Tell it how much 0% debt you’re going to get, the interest your savings account pays (plus whether you’ll be taxed on it), and how long you plan to stooze for; then it’ll tell you what the likely profit is.

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.

Amount Stoozed: £
(Building new simply spend debt? enter half max amount)

Credit Card Interest Rate %

How long for? months

Tax Band : No Tax Basic Rate Higher Rate
Savings Account Pre-Tax Interest Rate: %

A note for the curious: Where does ‘stoozing’ come from?

This isn't a fly-by-night system. Martin first broadcast a strategy for this in early 2000, as 0% credit card interest rates began. Many who started back then now report thousands in total gains.

As the number of 0% cards increased, so did the number of people taking advantage. The now-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.

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