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.
Best buys: Cards for stoozing
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.
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.
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.
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%.
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.
- 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.
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.
- 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.
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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.
Its 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 ISAThese 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.
Easy access savings account
The highest-paying standard savings account is the Easy Access Saver from Coventry Building Society, paying 1.3% AER. It can be opened online, by phone or in branch, and you can save from £1. You can also make unlimited withdrawals from the account - but this isn't that important if you're stoozing as you just pay off when the 0% ends.
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 1.4% 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.
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: 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.
Longest no-fee balance transfer card
Halifax* up to 23 months 0%, no fee (18.9% rep APR after)
This Halifax* credit card offers a market-leading 23 months at 0% with no balance transfer fee – the longest 0% period we've seen without a 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.
- We say this card's 'up to' 23 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%
Second-longest no-fee balance transfer card
AA* 22 months 0%, no fee (19.9% rep APR after)
This AA* credit card gives a decent 22 months at 0% with no balance transfer fee. Its advantage over the Halifax card above is that, if you're accepted, you'll definitely get the full 22 months 0% – poorer credit scorers won't be offered fewer months.
- 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.
- You must transfer a minimum of £100, and a maximum of £200 less than your credit limit.
- 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.
Next longest no-fee balance transfer card
Tesco* 21 months 0%, no fee (20.6% rep APR after)
This Tesco* credit card offers two months fewer at 0% with no balance transfer fee than the market leader above – but sadly we're not able to check your eligibility for this one. So, if you think your chances of getting it are low, look at one of the other options.
- You’ll either get the whole 21 months or be rejected.
- You can’t transfer a balance from another Tesco card.
- After the 0%, it’s 20.6%-26.7% interest on any remaining transferred debt.
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.
Stoozing calculatorHow much can you stooze?
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.