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Stoozing - make free cash

Earn interest from 0% credit cards

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Martin and Sam

Updated July 2016

Stoozing's the art of making money by earning interest on cash credit cards lend you at 0%. Having had a dull period, now with longer 0% deals, fee-free balance transfers and tax free high-interest bank savings accounts, stoozing's back with a BANG!

Beware though, you need to know what you're doing. 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.

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.

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.

This requires discipline, and is absolutely NOT a way to spend more than you would have – 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

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. Most of the cards featured in this guide are in it.

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.

Sainsbury's card

Longest 0% and you get Nectar points on spending

Sainsbury's Nectar* - 27 months 0% (18.9% rep APR after)

Sainsbury's* has just upped the length on its 0% spending card, meaning you can now get a massive 27 months interest-free on new purchases, the joint-longest offer we've seen. You'll also earn Nectar points on all spending.

Need-to-knows
  • New customers applying by 27 September 2016 will get 5,000 bonus Nectar points if they spend £800 in Sainsbury's in the first three months - but don't use this as an excuse to spend more than you normally would.
  • You get 2 points per £1 spent on Sainsbury's shopping and fuel, and 1 point per £5 spent elsewhere.
  • Make sure you fully clear the card(s) by the end of the 27 months or you'll be charged 18.9% interest on any remaining balance. Poorer credit scorers may get 21.9% or 28.9%.
  • You'll either get the full 27-month deal or you'll get rejected.
Eligibility Calculator
(MSE's free tool)
APPLY*
(at lender site)

Protect your credit score and check chances of getting card

Stats box
  • Spending length: 27 months 0% | Card issuer: Mastercard | Min income: N/A
  • Rep variable APR: 18.9% (See Official APR Examples)
  • Minimum repayment: Greater of 1% of balance plus interest, 2.25% or £5
Post Office

Joint longest 0% spending card

Post Office* - 27 months 0%

This Post Office* card has the joint longest 0% period on spending - 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.

Some of you have told us that when you apply it looks like there's a 0% period of just 16 months on spending but we've confirmed with the Post Office that as long as you make a purchase in the first three months, you'll get the full 27 months 0%.

Need to knows
  • If you don't make a purchase in the first three months, you'll only get 16 months 0% on spending - which won't make this a good deal for stoozing.
  • Make sure you fully repay the card by the end of the 27 months or you'll be charged 18.9% interest on any remaining balance.
  • If you're accepted you'll get the full 27 months 0% deal. Unlike some cards, the Post Office doesn't give poorer credit scorers a lower number of months at 0%.
Stats box
  • Spending length: 27 months 0%
  • Representative variable APR: 18.9% (Official APR Example)
  • Card issuer: Mastercard
  • Min income: £8,000
  • Min repay: Greater of 1% of balance plus interest, or £5
Clydesdale

Second longest 0% spending deal

Clydesdale/Yorkshire* - 26 months 0%

This card from Clydesdale Bank* offers 26 months 0% on spending. Plus if you're accepted for the card you won't get fewer months at 0% like some of the cards in this guide.

Need-to-knows
  • You'll either get the full 26 months 0% or be rejected - Clydesdale isn't one of the lenders which accepts you for the card, and gives you a different 0% offer.
  • Make sure you fully clear the card by the end of the 0% period or you'll be charged 18.9% interest on any remaining balance.
  • Yorkshire Bank* (eligibility calculator) also offers the same 26 month 0% deal, as it is part of the same banking group.
Stats box
  • Spending length: 26 months 0%
  • Rep variable APR: 18.9% (See Official APR Examples)
  • Card issuer: Mastercard
  • Min income: N/A
  • Minimum repayment: Greater of 1% of balance plus interest or £5
AA

Long 0% spending card

The AA* - 26 months 0%

The AA* Dual Credit Card offers the same 26 months 0% on spending as the Clydesdale card above. You can also do a balance transfer with this card but it has a high fee so look at other options first.

Need-to-knows
  • If you want to also do a balance transfer, you'll pay a fee of 2.98% of the balance transferred, though you'll only get 20 months at 0% on the balance transfer.
  • If you're accepted, you'll definitely get the full 26 months 0%.
  • Make sure you fully clear the card by the end of the 26 months or you'll be charged 18.9% interest on any remaining balance.
Eligibility Calculator
(MSE's free tool)
APPLY*
(at lender site)

Protect your credit score and check chances of getting card

Stats box
  • Spending length: 26 months 0% | Card issuer: Mastercard | Min income: £8,000
  • Rep variable APR: 18.9% (See Official APR Examples)
  • Minimum repayment: Greater of 1% of balance plus interest, 2.5% of balance or £5

STEP 2: Save the cash that builds in your bank

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.

Now it's time to follow the golden rules on stoozing:

  • 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 the 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.

Where to save the cash

The most important thing is that you put it somewhere with 'easy access' meaning you can withdraw the cash whenever you need it and clear the debt.

After that, the key is simply earning the maximum amount of interest - the new personal savings allowance helps in this quest as it means savings interest is now paid to you tax free (though the biggest stoozers are likely to exceed their allowance, and will have to pay some tax on the interest).

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).

  • 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 £5/mth account fee).

    To get the full benefit you may want to move all your cashback-eligible bills over.

    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, you can also get 5% cashback on the first £100 spent each month on your contactless debit card. You'll need to pay in £500 every month to hold the TSB account.

    At Lloyds, you can get 4% interest if you have £4,000 to £5,000 with the Club Lloyds account. Watch out, though, as you'll only get the top 4% rate if you have between £4,000 to £5,000 in the account. Slip below this, and the rate of interest you get is halved.

  • Pay cash into a flexible or offset mortgage

    Whether you should do this will depend on what your mortgage rate is, and whether the mortgage allows you to offset the interest against savings (most don't, and don't confuse this with overpaying - it's not the same thing). As a rule of thumb, if your savings rate is higher than your mortgage rate, then save. If your mortgage rate's higher than what you can get on savings, then offsetting will be a better use of your stoozed cash.

    It works like this... Say your mortgage balance is £150,000 and you have £50,000 in savings in a linked account, you only pay interest on the £100,000 difference. With an offset you are effectively saving at your mortgage rate, usually with easy access. So cash, even a couple of thousand pounds, put into an offset account can give you serious savings.

  • Top cash ISA

    These allow every UK adult to save up to £15,240, and pay no tax on the interest earned. Plus, any interest from ISAs it doesn't count towards your personal savings allowance meaning they're a good place to save if bank account savings interest has taken you over your personal allowance.
  • The current open-to-all highest-paying cash ISA that allows access whenever you need it is the Easy Access ISA from Coventry Building Society. It pays 1.3% AER variable, from £1, though doesn't accept transfers in from previous years' ISAs. 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 Defined Access E-Saver from Virgin Money, paying 1.26% AER. It can be opened online and you can save from £1. You can only make three withdrawals per year from the account, but this isn't that important if you're stoozing as you just pay off when the 0% ends.

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.

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: Boost it with a fee-free balance transfer

To really ramp up your gain, you can shift the debt again to another cheap balance transfer to keep earning interest on the savings.

Always try to grab the balance transfer card with the lowest fee possible. Balance transfer fees used to be around 2-3%, but have dropped in many cases to zero. Check the current best buys below without a fee, and balance transfers for the full selection.

Tesco’s* 24 months 0%, no fee

Joint longest no-fee balance transfer card

Tesco* 24 months 0%, no fee (20.6% interest after)

This Tesco* credit card gives the joint-longest 0% period with no balance transfer fee of two years. If you're accepted, you'll definitely get the full 24 months 0%.

We can't check your chances of getting this card, but can with the cards below so you may want to consider those as well.

Need-to-knows
  • You must balance transfer within the first 90 days to get the 0% offer.
  • You can't transfer a balance from another Tesco credit card, or apply if you hold more than one Tesco credit card already.
  • After the 0%, you'll pay 20.6% interest on any remaining transferred debt, but poorer credit scorers could pay up to 26.7%.
  • Always pay at least the minimum monthly repayment, or you'll lose the 0% deal.
  • Don't spend/withdraw cash on this card. It usually isn't at the cheap rate and cash withdrawals hit your credit file.
Stats box
  • Balance transfer length & fee: 24 months 0%, NO fee
  • Minimum payment: Greater of 1% of balance plus interest or £25
  • Min income: £5,000 | Card issuer: Mastercard | 0% balance transfer time limit: 90 days
  • Rate: 18.9% representative APR (see Official APR Example)
AA’s* 22 months 0%, no fee

Joint longest no-fee balance transfer card, if you transfer £500+

AA* 24 months 0%, no fee (19.9% rep APR after)

This AA* credit card gives the joint-longest 0% period with no balance transfer fee of two years, as long as you have £500 to transfer. If you don't, you'll only get 22 months 0%, which isn't as good a deal.

Need-to-knows
  • You must balance transfer at least £500 to get the 24 months 0% - any less will get 22 months 0%.
  • You must balance transfer within the first 3 months from account opening to get the 0% offer.
  • You can't transfer from any Bank of Ireland UK card, as it also provides the AA card.
  • After the 0%, you'll pay 19.9% interest on any remaining transferred debt, but poorer credit scorers could get 22.9%.
  • Our Which card is cheapest? tool explains if this is best for you.
Stats box
  • Balance transfer length & fee: up to 24 months 0%, NO fee
  • Minimum payment: Greater of 1% of balance plus interest, 2.5% of balance or £5
  • Min income: £8,000 | Card issuer: Mastercard | 0% balance transfer time limit: 3 months
  • Rate: 19.9% representative APR (see Official APR Example)
Halifax’s* 23 months 0%, no fee

Joint longest no-fee balance transfer card

Halifax* up to 24 months 0%, no fee (18.9% rep APR after)

This Halifax* credit card offers a decent 24 months at 0% with no balance transfer fee. However, there's a possibility you could be accepted but not get the headline deal – some accepted could get just 13 months, making it a worse offering.

Need-to-knows
  • We say this card's 'up to' 24 months as some may get 13 months 0% depending on credit score.
  • You can't transfer from a Halifax card but you can from its sister firm, Bank of Scotland.
  • You must balance transfer within the first 90 days from account opening, otherwise a 3% fee will be charged.
  • After the 0%, it’s 18.9% interest on any remaining transferred debt, but poorer credit scorers will get 21.9% or 25.9%
Eligibility Calculator
(MSE’s free tool)
APPLY*
(at lender site)

Protect your credit score and check chances of getting card

Stats box
  • Balance transfer length & fee: up to 24 months 0%, NO fee
  • Minimum payment: Greater of 1% of balance plus interest, or £5
  • Min income: N/A | Card issuer: Mastercard | 0% balance transfer time limit: 90 days
  • Rate: 18.9% representative APR (see Official APR Example)

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%. 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.

To give an idea of how much you’d make, we’ve built a simple calculator. Unfortunately, this doesn't work on mobile, just on PCs and Macs, so email yourself this guide and check it out when you're able to view on a desktop computer.

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.

Stoozing calculator

How much can you stooze?

(Stoozing by spending on credit instead of debit? Enter half your max credit limit.)

Tax band

Please enter a valid amount.

Please enter a valid credit card interest rate.

Please enter a valid period in months.

Please select a tax band.

Please enter a valid pre-tax interest rate.

Discuss this tool

Interest charged on credit card: {[sc.interestCharged | currency:'£':2]}

Interest earned in savings account: {[sc.interestEarned | currency:'£':2]}

The profit from stoozing is: {[sc.stoozeProfit | currency:'£':2]}


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.