using credit cards to your advantage?

[leeb]

hi all,

i have been reading about this thing called 'stoozing'. now i have always been very good with money, never been in debt, never had a cc etc. but what i am reading makes sence.

get a CC 0% on purchases, and use it for everything i would normally use my debit card for. Set up a minumum payment for the card by DD each month, adn make sure that each month, i transfer the amount spent on the card in the previous month to a high interest savings account.

Anyone doing this? or got any thoughts on it?

Also what is the situation on setting up monthly payments such as insurance, sky etc etc to come from the 0% card, adn transfer the money into the high interest? can this be done.

Cheers

edited due to my crap early morning interest calculation. gradually building up say £5K over a year, wouldnt give an annual return of 6% on that whole £5k. ive woke up now!

Edited by leeb on Saturday 2nd February 10:16

[john_p]

If you are disciplined then I guess this will work

However it relies on
a) you being prompt with your payments and never missing one (you lose the 0% if you do this)
b) people not charging you extra because you pay by CC (I think BT and Sky do this?)
c) if you transfer the balance at the end you'll pay a 2-3% transfer fee

[Dr Bob]

Hi Leeb, I've done this in the past (it was much easier when balance transfers were free - they now cost between 2 and 3%, which makes things less worthwhile unless you have time on your hands), and shifted about 5k on credit cards for a couple of years - probably earned a few hundred in interest.
You do need to:
1) set up a minimum payment direct debit so you don't get caught out with late payment fees
2) be organised and stash the money somewhere with a good return
3) not borrow from the pot!
4) pay the amount in full when it becomes time

I've just got a 13 month interest free credit card and am going to be doing this for the next year too.

CH

PS: the ready-reckoner way to work out potential interest to be earned would be to halve your 5k and use that for the interest calculation
e.g: 5k pa spend - equates to - 2.5k x 5% = £125 in interest (approx)

[Max Turbo]

What I do is write in my Outlook diary about 4 weeks before the 0% is going to expire, so that I have plenty of time to get the funds together and pay off the CC in full.

If you dont use Outlook or any form of diary, I can suggest www.moneysavingexpert.com which has a reminder facility that you can put in pertinent financial dates and they will email you to remind you closer to the time.

HTH

[David Beer]

I use my Amex for as much as possible, of course paying it off in full. I have one for personal use as well, join the points and it pays well, the £650 annual charge is a bit steep though but i have to say worth every penny.

[leeb]

cheers for the advise,

i am checking my account every month anyway transfering various amounts etc, so to keep a check on spending on a 0% card will be no trouble. i am well aware of the potential problems and costs of credit cards, which is why i have always avoided them. this would be purely to earn some xmas money to spend as a bit extra for a bit of organisation. not so bad.

i am currently looking into cards, where and who etc. I am seeing if there is such a thing as 0% on purchases and cashback, or rewards of some description. Balance transfers isnt an issue as i would be paying the card off at the 11th month.

Lee

[bigburd]

www.moneysavingexpert.com has info on this

I am using a cashback card at the moment...buying everything on it and paying off 2/3 times in the month. I am gonna try and buy new car on it 3 x maxed limits over 3 - 4 weeks.