In your search to make money online there is likely to be one thing that you haven’t looked into. Making money using your credit card is relatively easy (provided you have a good credit rating at the moment) and everyone who has can do it. All you need is a little bit of extra time, and to understand your rights. It’s often referred to as credit stoozing and it enables you to beat the system.
When you look up credit stoozing you may get a little confused. Many websites don’t explain it properly and it can seem a little more complicated than it actually is. There are seven main steps involved in credit stoozing. These include:
- Step One – Opening up a high interest savings account
- Step Two – Applying for any standard credit card
- Step Three – Taking out a cash advance for the full balance of the credit card. Put it into the high interest savings account.
- Step Four – Apply for a 0% transfer balance credit card
- Step Five – Move the balance from the standard card to the new balance transfer card
- Step Six – When enough interest has gathered in the savings account, pay off the credit card in full
- Step Seven – Keep the profit that has been earned in the savings account
The above steps are simple enough, and while they can work it is worth pointing out that credit stoozing isn’t always profitable. There are a number of things that you have to think about before you begin.
One of the main things that you have to think about is how expensive cash advances can be. Most credit cards will charge a fortune for a cash advance. Usually you are warned off taking out any advance on a credit card. However, in terms of credit stoozing it can work out because you are paying the balance off with a 0% balance transfer deal. Still, it’s much better to look for a credit card with a low cash advance rate as it will save you money in the long run.
The balance transfer card that you end up with will not charge you any interest on the balance for a set period of time. This means that the money can be left building up in the savings account. Say the credit card is charging you 2% each month and your savings account is earning you 4%; you get a profit of 2% each month.
One problem that you could encounter is application fees. If you want to make money from credit stoozing then you have to avoid any annual fees and maintenance fees if you can.
It is worth keeping in mind that you won’t earn a massive amount of money from this type of money making scheme. Typically you may earn a few hundred dollars over a six month period. This isn’t going to be enough to retire on, but it beats the hell out of the card companies profiting from you all the time.
If you forget to pay one of your credit card repayments then you will throw the entire system off track. You need to be sensible with your money in order to make this successful. Credit stoozing definitely isn’t for everyone and it can get you into a lot of financial trouble if you aren’t organized with money.
One question which you might have is whether stoozing will affect your credit score. The answer to that is highly likely. You will be applying for a credit card and getting into debt on that card for a six month period.
This will show on your credit report. However, what will also show are the repayments that are regularly made. Then at the end of the six months when you pay off the debt completely, it will improve your credit rating.
You should always close down all credit cards once you have finished stoozing. This is useful in case you want to apply for another credit card. The lender will look at how many cards you currently have and if you are using them. If you aren’t then they will wonder why and they will be less likely to give you their credit card.
As well as earning a little extra money from credit stoozing, you can also use it to pay off your credit card debts without the use of a loan. If you have debts then you can transfer them onto the 0% balance transfer card and open up another high interest savings account to pay them off. Of course, the only trouble with this is that if you have a credit card debt, you will find it more difficult to get a good deal on a balance transfer card.
Although this little money making scheme can be used by everybody, it doesn’t mean that it’s suitable for everyone. As long as you aren’t forgetful you could earn hundreds of dollars a year doing this.
Before you start a credit stoozing scheme, make sure that you use an online calculator to estimate whether or not it will be worth it. There are various online stoozing calculators which will work out how much you can expect to earn from your stoozing deal.
Stoozing has been around since the early 2000’s. It is quite new and many people have been using this method for years to make back thousands of dollars.
Overall credit stoozing can be really beneficial and it is a great way to beat the creditors. However, it really isn’t for everyone. If you tend to be forgetful, aren’t great with money, and suffer with a lack of financial discipline then it would be a bad idea to take part in this type of money making scheme.
Remember there are things out of your control that can go wrong too. Changes to interest rates often occur and that can throw the whole thing out of whack. You could lose a couple of points off your savings interest rate meaning you have to move your money, or you could find that your credit card company decides to start charging an annual fee.
You have to stay alert and look out for anything that could turn this little venture from a tidy income stream to another drain on your finances.
This article was written by Timothy Ng.