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Stoozing - make free cash

Earn interest from 0% credit cards

By Martin and Dan

Updated January 2016

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.

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. All these cards are in it, except Clydesdale, 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.

Post Office

Longest 0% spending card we've EVER seen

Post Office* - 27 months 0%

This Post Office* card has the longest 0% period on spending we've ever 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 - 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

Second longest 0% spending deal

Clydesdale/Yorkshire* - 26 months 0%

This card from Clydesdale Bank* offers 26 months 0% on spending. But, we can't check your chances of getting this card for you, so if you think you're likely to be rejected then it's worth looking at the other cards below where you can check your chances before applying.

  • 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* also offers the same 26 month 0% deal, as it is part of the same banking group (National Australia 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
Sainsbury's card

Long 0% and you get Nectar points on spending

Sainsbury's Nectar* - 25 months 0%

If you like to collect reward points as you spend, then this Sainsbury's Nectar* card could be a good option. Not only do you get a decent 25 months 0% spending, but you'll also earn Nectar points as you spend. But, if you aren't so fussed about the points, you can get a slightly longer 0% period with the cards above.

  • 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 25 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 25-month deal or you'll get rejected.
Eligibility Calculator
(MSE's free tool)
(at lender site)

Protect your credit score and check chances of getting card

Stats box
  • Spending length: 25 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

Long 0% as long as you use it in the first three months

AA* - 24 months 0%

Another card offering 24 months 0% on spending is the AA* Dual Credit Card, as long as you make a purchase within the first three months. If you don't, you'll only get 20 months 0% which isn't as good a deal.

  • You'll either get the full 24-month deal or be rejected (unless you don't use the card, in which case you'll get 20 months, as described above).
  • After the 0% period ends, you'll be charged interest at 19.9%, but poorer credit scorers may get 22.9%.
Eligibility Calculator
(MSE's free tool)
(at lender site)

Protect your credit score and check chances of getting card

Stats box
  • Spending length: 24 months 0% | Card issuer: Mastercard | Min income: £8,000
  • Rep variable APR: 19.9% (See Official APR Examples)
  • Minimum repayment: Greater of 1% of balance plus interest, 2.5% of balance or £5

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.

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 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.

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 £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.

  • Top cash ISA

    The current open-to-all highest-paying cash ISA that allows access whenever you need it is the Easy Access ISA account from Coventry BS. It pays 1.5% AER variable, from £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 HiSAVE SuperSaver account from ICICI Bank, paying 1.65% AER. It can be opened online and you only need £1 to get that rate.

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: 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. 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.