Stoozing is the funny name given to the art of making money by using credit cards to your advantage. It was very popular before the Great Recession in 2007 and has been making a come-back in recent years.
Many people in the U.K. report making thousands by stoozing in its heyday.
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Stoozing used to be very easy to do when banks were offering 0% balance transfers on their credit cards but while it is not as common to see those promotions anymore, there are still ways that you can make some free cash from your credit cards.
Although it seems like a new phenomenon, stoozing has been around in the UK since the early 2000s in one form or another and is perfectly legal.
Who can profit from stoozing?
Anyone who is eligible for a 0% credit card can make some free cash from stoozing but there are a few things you need to be aware of:
- A good credit score is a must as stoozing involves applying for a new credit card so your credit report will be checked.
- You want to be debt-free before starting a stooze.
- You need to be organized and prepared to track dates. The new credit card must be paid off and canceled in a timely fashion to make the stooze profitable.
The classic stooze
The classic stooze involves taking out a 0% interest credit card and using it for all your expenses while you make interest on the cash you otherwise would have spent.
You can read all about the classic stooze at MoneySavingExpert. They discovered stoozing in the early 2000s and have a very detailed tutorial on how to stooze.
Things to Remember
- In order to make free cash and not get dinged by high-interest rates, you must pay the entire credit card balance off before the promotional period ends
- You must make the minimum payment every month in order for the 0% rate to remain valid
- The best bang for your buck would be to front-end your spending so that most of it is in the first month or so of the promotional period. That way you have more time to earn interest in the savings account.
If the classic stooze seems too risky or high interest accounts still aren’t really available where you are, you can still take advantage of the stooze-lite or credit card flip.
Credit card flipping has been around for ages and is very common, especially among people who use their credit cards for travel points.
Credit card flipping still requires that you take out a new credit card but no juggling of balances is involved in this one.
- Search for a credit card with a welcome bonus & no annual fee. Bonus points if it comes with a great cash back or rewards scheme.
- Use the credit card exclusively until you qualify for the bonus or keep using it until the free period runs out (if it does).
- To make this profitable, you need to pay your balance off in full each month.
Stoozing in practice
The stooze-lite is my favorite stooze and I have done it many times. It is risk-free and can make you a lot of money very quickly for little to no effort.
Here is my own example:
Great Canadian Rebates bonus – $50
American Express Gold Rewards sign up bonus – $300
No fee for the first year.
I actually really liked the card and used it for the full year even once I had spent enough to qualify for the $300 bonus. I made a note in my diary and canceled it before the free year was up. Sometimes when you ask to cancel a card, the company will offer to waive the annual fee but unfortunately, I didn’t get lucky that time.
Profit – $350 for free
This paid for Christmas last year. Awesome.
In theory, you can do the stooze-lite as many times as you want. Do be aware, however, that your credit score will take a hit each time the report is pulled when you apply for the new card so you don’t want to apply for a lot of cards in a very short period of time.
For more ideas on how to save money, check out my other frugal living posts:
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