Stoozing: Create Free Money with Credit Cards

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The first thing that may come to your mind when reading ‘free money’ is that no money comes ‘free’. Well, while this method does literally involve no financial expense, it does involve a bit of time and effort.
- 1. What is stoozing?
- 2. Would it be a good idea to do this now?
- 3. How would you go about it?
1. What is stoozing? – Stoozing is taking advantage of an introductory interest rate on finance (typically credit cards), and then putting that money into a high interest savings account. Since the interest rate in the savings account is higher than the introductory interest rate, you can earn money from it.
2. Would it be a good idea to do this now? – Yes and no.
Yes, since many people are strapped for cash and can benefit from any form of ‘free money’. The only cost that ’stoozing’ involves is the time and effort.
No, because interest rates are dropping at the moment. Whereas introductory credit card offers also stay around 0-3%, high interest savings accounts tend to drop if the Reserve Bank makes cuts. You can still make money from stoozing, just not relatively as much as you could have when interest rates were higher.
3. How would you go about it? – The first step is to open a high interest savings account (you can compare the best ones at http://www.creditcardfinder.com.au/high-interest-savings-accounts). All of these accounts have no setup fees, maintenance or withdrawal fees. Try to go with an account that has the highest introductory rate possible. For the sake of this example, we’ll use the St George ‘directsaver’ account, with a rate of 5.75% (current rate as of June 15th 2009 is 4.50% – old rate will be kept for sake of calculations below).
Next, You need a credit card with a low introductory cash advance rate on it. Typically, credit cards don’t offer introductory rates on cash advances, only purchases.
Citibank’s ‘ReadyCredit’ offers 2.90% on purchases AND 2.90% p.a. for 6 months on balance transfers, but unfortunately has become unavailable for online application from Citibank.
By using ReadyCredit as a case study, the next step is to withdraw the cash amount you wish to invest into your high interest savings account, let’s use $10,000.
- – Over 6 months, the $10,000 in your directsaver account will have
increased to $10,287.50. - – Over 6 months, the $10,000 you withdrew from ReadyCredit will have
amassed to $10,145. - – Therefore, after you’ve paid off the introductory ReadyCredit offer,
you’ve earnt $142.50 for sitting back and watching your money grow!
As you can see, stoozing is fairly easy. Since interest rates aren’t too high at the moment, you’ll need to decide whether it’s worth the effort for your investment. You’ll also need the discipline not to go and spend your huge cash advance as well.
Related posts:
- What Is Credit Card Stoozing, And How Can I Make Money Stoozing?
- Free Balance Transfer Credit Cards – Compare & Apply Online for Free Balance Transfers
- Making Money With Credit Cards
- Free Credit Cards – Compare & Apply for $0 Fee & Interest Free Credit Card
- Interest Free Balance Transfers
- How To Make Money With Credit Cards
- How To Create A Budget
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