Can i ask what the purpose of such large credit card debt is? Is it just to get setup with savings instantly with a comparable amount you would want to save monthly equalling your minimum monthly repayments instead of slow build up you're doing a big bang?
Mortgage Rate Rises
- Thread starter glenimp617
- Start date
He will have £45k sitting at 5%. How you get there is up to you --- I generally take a 0% card, max it out, divide balance by interest free period, then pay the minimum monthly and lock the rest away (i.e. savings = (balance/period)-minimum payment). That way I guarantee I have 100% of the cash available when the term finishes. When it finishes, I then BT the amount, and just stock pile the cash. That way if the BT is even declined or an issue occurs I can just pay it off.
I have just started again on a 0% RBS card, so I'll rinse and repeat. By the end of that I'll have £8k+£6k in cash stockpile and hopefully a BT card that can take most/all of the load.
It is a separate process to "saving". This is just to maximize money earned in interest. I believe it used to be called Stoozing?
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Yay someone else in same boat.
I thought I had a lot.
I'm sitting on 18k.
I have access to like 60k. Quite ridiculously really imo
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Soldato
Previously it paid for house renovations at 0%, now it's just stoozing/saving with about 1 year to 2 year flex so I don't need to carry any significant sums of cash.
Means I never have to pay interest. Eg I bought a car 4 years ago for about 10k on 0% credit cards (few places offer this but arnold Clark did)
Eek just checked mines 39k out of a total 79kYay someone else in same boat.
I thought I had a lot.
I'm sitting on 18k.
I have access to like 60k. Quite ridiculously really imo
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I'm doing what you are doing.
Rather than getting a loan at x percent, I'm putting it on 0pc CCs
Soldato
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- 22 Nov 2007
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This stoozing thing sounds good. How long interest free periods are people getting?
Do you put all the money in stocks and shares for 18/24 months?
Do you put all the money in stocks and shares for 18/24 months?
~18months on 0% and BT are similar. It's a timing thing.
Definitely not in S&S. Too much risk IMHO.
What am I missing here? Surely the minimum payments on these is topping up to the equivalent that you would be spending/saving monthly and if you are balance transferring you are upfronting the fee comparable to interest anyway, so where do you get the benefit other than a stockpile of cash thats cost you a fee to get in the first place, and I’m guessing that the balance transfers had to start from a card you maxed out the limits on in the first place to be able to BT it over to 0%
Well yeah. You max out a 0% card over time but make sure you retain enough cash to clear the bill. The cash you are retaining you stick in a 5% acc.
Soldato
Can get 0% balance transfer at 0% fee previously but now there is less of them
But even if you have a 1% fee and it's an 18month period, you can get stick it in an easy access saver e.g. Marcus at 4.75% or ISA at similar.
The fact that you're paying in some small amount into it as minimum payments is minor, particularly if it's 0% purchases as you just top it back up.
I don't do it for the circa £2000 it makes a year but more as it was good for my cash flow position which was negative 40k for a couple years, and now it's easy money.
Well nowhere is doing 1% fees especially not on cash transfers, you’re looking at 2.5% at the very very best and averaging 3.-3.5%
Also you have to have a couple of things going for you, from what I can work out:
1) you have items to pay for that will allow you to max a balance out quickly and would otherwise of had the cash to set aside or a good amount to set aside.
2) you still have to make 1% minimum payments on average so you have to have the capacity for this, and if you have the capacity for this then you could just be saving the equivalent of the 1% monthly’s anyway.
3) you need capacity for the savings to be shelled inside a tax free facility especially if a higher tax band incoming otherwise the benefits of the upfront stooze are wiped out.
@Buffman your situation makes more sense due to you being in a position where you needed to spend the money in the first place, however for those that don’t need to spend the money, there’s much smaller capacity to benefit when factoring in the BT fees especially.
Also you have to have a couple of things going for you, from what I can work out:
1) you have items to pay for that will allow you to max a balance out quickly and would otherwise of had the cash to set aside or a good amount to set aside.
2) you still have to make 1% minimum payments on average so you have to have the capacity for this, and if you have the capacity for this then you could just be saving the equivalent of the 1% monthly’s anyway.
3) you need capacity for the savings to be shelled inside a tax free facility especially if a higher tax band incoming otherwise the benefits of the upfront stooze are wiped out.
@Buffman your situation makes more sense due to you being in a position where you needed to spend the money in the first place, however for those that don’t need to spend the money, there’s much smaller capacity to benefit when factoring in the BT fees especially.
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Nobody is suggesting maxing out a 0% credit credit if you don't need to spend the money in the first place
Soldato
They aren't cash transfers, it's a balance transfer. Even balance transfers have got worse recently but there's zero fee 0% Apr examples here
Balance transfer credit cards
If you're paying interest, see if you can transfer your debt to a 0% deal. See Martin Lewis' top pick balance transfer credit cards.
www.moneysavingexpert.com
I have been doing this for 10 years no issues.
Your point 2 doesn't consider the point I made previous re: purchase cards
3) there are plenty cash ISAs offering circa 4 to 5%
Soldato
The other thing to consider if you want to get a residential mortgage having a ton of credit card debt may screw you on affordability, even if you are using it a way that you benefit from.
The rates I mentioned are for balance transfers not cash transfers.They aren't cash transfers, it's a balance transfer. Even balance transfers have got worse recently but there's zero fee 0% Apr examples here
Balance transfer credit cards
If you're paying interest, see if you can transfer your debt to a 0% deal. See Martin Lewis' top pick balance transfer credit cards.
I have been doing this for 10 years no issues.
Your point 2 doesn't consider the point I made previous re: purchase cards
3) there are plenty cash ISAs offering circa 4 to 5%
My 2nd point was about the minimum monthly payment that you have to make towards the credit cards. Unless something has changed, I’ve never seen a credit card that doesn’t require a minimum monthly payment.
The benefit of stoozing then becomes much smaller as its total balance in savings interest + costs (bt fees) - minimum monthly payment vs same minimum payment amount put in to savings earning interest.
Isa only useful if they aren’t already being maxed out.
They aren't cash transfers, it's a balance transfer. Even balance transfers have got worse recently but there's zero fee 0% Apr examples here
Balance transfer credit cards
If you're paying interest, see if you can transfer your debt to a 0% deal. See Martin Lewis' top pick balance transfer credit cards.
I have been doing this for 10 years no issues.
Your point 2 doesn't consider the point I made previous re: purchase cards
3) there are plenty cash ISAs offering circa 4 to 5%
Same.
I've got a mix of BT and purchase cards.
For example I'll be putting my 3k holiday straight on one.
All my shopping etc. Didn't take long with a holiday, some bills etc to get one card to 6k.
Then just bounce that around.
Hoping to chop mine down to 6k after the van is bought. But again. Better than a loan.
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What comparison are you making? No-one is saying don't save as well. This is new free money. There is no way it can't be beneficial.
Soldato
Yeah it was only this year that I've ever paid a fee but still 4to 5% interest is better than say a 1% fee. If the fees go up crazy ill just pay them off. If they're less than the interest im tempted to keep some amount as ill probably buy a 20k (ish) car soon and means I wouldn't need a loan.
If you are balance transferring it’s not free.
If you’re spending money on a CC instead of spending cash then you need to be putting that cash in to savings at the same time, other wise you are just creating debt. Add to this the slowly increasing your minimum monthly payment but always had the capacity to pay that minimum monthly payment then you are already saving the minimum monthly payment about.
So once you’ve built up a balance of your so called free money to a point where the minimum payment matches your monthly savings contributions you are no longer saving money and have a balance of debt offset by a savings balance.
If you can afford £500 in monthly minimum repayments from day 1, you can be saving £500 from day 1.