Stoozing refers to the act of borrowing money at zero percent, usually on a credit card, and then placing it in a high interest bank account as a way of making a profit. When the zero percent period comes to an end, the borrower, often known as a stoozer, pays the money back before being hit with a finance charge. This way, the borrower does not actually have debt. Instead, the money is always available–it is simply being held in another account as a way of earning a profit.

Strategy

Credit card companies often offer zero percent rates for new accounts, for anywhere from six to twelve months. During this time, money can be transferred to other accounts, or purchases can be made without the customer's having to pay interest on a balance carried from one month to the next.

When there is no interest being charged, a stoozer will take the money, up to the allowable limit, and transfer it into a savings account with a high interest rate. This is carried out by using the balance transfer option. In some cases, you may even be able to get a check from your credit card company. This makes it simple to transfer the money into a savings account.

The key to this strategy's effectiveness is simple: the stoozer must pay the money back to the credit card company before the zero percent period expires. This ensures that no money is lost. The amount earned in interest is then considered profit.

The more money you can borrow and the longer you can hold it without being charged interest, the more you will earn in the end.

In order to become a successful stoozer, you must always be on the lookout for additional credit cards that fit your criteria. You are going to receive the zero percent introductory period only one time for a card. After that, you will no longer be able to use the credit card for stoozing. Instead, you will have to apply for a new card and then start over at the beginning.

The most successful stoozers are those that have several transferred balances at the same time. This way, you are able to add as much money as possible to your savings account.

It is also of utmost importance that you find the savings account with the highest interest rate. This will help to ensure that your money is working as hard as possible during the time that it is in the account.

Potential Problems

A common problem among stoozers is not having their next zero percent credit card offer set up. If you are going to use this strategy over the long term, it is important to plan in advance so that you always have money to invest.

Another potential issue is quite large: not remembering to pay off your balance when the zero percent offer expires. If you max out a card for stoozing purposes but do not pay it off when the higher rate kicks in, you can lose all your profits, plus much more.

Although stoozing has become very popular since it was first called this in 2004, there are definite pros and cons. If you have enough money available and a place to earn high interest, you have the potential to earn a nice return. However, there is some risk involved–especially for those who do not fully understand the concept.

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