Maximise your Avios, air miles and hotel points

Forums Payment cards Other payment cards 0% balance transfer cards

  • roger 232 posts

    What’s the catch with likes of MBNA or VS Black card offering approximately 90% credit card limit transfer to your bank account?

    In my case, VS Black with 3% fees for 0% interest for almost 18 months.
    Even if you leave money out to a fixed savings account you are still in profit, although it assumes you are going to renew and pay annual fees for the card.

    Seems bit bonkers in the current interest rate environment.
    As per MSE https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/
    you can earn 5.22% interest with METRO bank paid monthly so definitely in profit.

    Heard about stoozing but never done it before.

    John 1,041 posts

    Well you seem to have answered the question, you will have to pay the annual fee. If you pay 40% tax you will barely be in profit. Also they hope you will forget to pay it off after the 18th month, or not have enough money to pay it off because you’ve spent it. Mixing purchases with balance/money transfers can also be confusing particularly if you are doing it on many cards, plus it uses up your available credit so you need to be careful if applying for other cards.

    I used to stooze heavily from 2012-2017 and it was only really worth it because I got huge credit limits. If you earn an extra 1% on 20k that’s only £200 which is equivalent to a 20000 avios SUB

    roger 232 posts

    One still gets £500 or £1000 interest income tax free, so most people can still make money off it if careful enough and organised enough!
    As last resort cash ISA if no other usage!

    BBbetter 764 posts

    One still gets £500 or £1000 interest income tax free, so most people can still make money off it if careful enough and organised enough!

    Recent competition after hikes in interest rates have forced banks to credit interest on even current account balances and cash held in investment platforms. Many could be above their tax free limits without realising it.

    JDB 4,619 posts

    One still gets £500 or £1000 interest income tax free, so most people can still make money off it if careful enough and organised enough!

    Recent competition after hikes in interest rates have forced banks to credit interest on even current account balances and cash held in investment platforms. Many could be above their tax free limits without realising it.

    Yes, HMRC has been running campaigns about this and also re capital gains on crypto.

    robkeane 79 posts

    Nabbed a 16 month 0%interest 0%transfer fee card from HSBC start of July with a good credit limit. Its no longer available.

    £10K been in a cash ISA since then @ circa 5%, and just doing the min payment each month off the card.

    Should end up with £500-ish taxfree at the end of the 12 months, and then 3 months or so interest elsewhere, before paying off the balance.

    ee 49 posts

    I’ve got about £22k stoozed at the moment at 0%. I put the equivalent cash into short dated, low coupon gilt – TN25 – maturing 31/1/25. Because of the low coupon, it trades below par and will converge to par as maturity gets closer.

    The advantage is that capital gains on this/most gilts are tax free which is beneficial for higher rate tax payers.

    The risks are that you’re only guaranteed to get par back on maturity. Before then the price will move in line (and inversely) with interest rates in the market so if you need the cash it’s possible to make a loss on sale e.g. if the gilt maturity is longer than your stooze and you can’t roll the stooze to another card. The short duration of something like TN25 mitigates some of this risk though.

    The other risk I am mindful of is that a change of government could change the tax treatment of the capital gains on gilts.

    Lots of stuff online on gilt investing to look at to work out if it’s right for you!

    Reney 791 posts

    I assume carrying a large balance may have some impact on your credit scoring, assuming that is an issue for you? For example new mortgage applications will ask about it.

    BBbetter 764 posts

    I assume carrying a large balance may have some impact on your credit scoring, assuming that is an issue for you? For example new mortgage applications will ask about it.

    As long as you aren’t remortgaging (or applying for any new loan) in the next 6 months.

    TooPoorToBeHere 267 posts

    As long as you aren’t remortgaging (or applying for any new loan) in the next 6 months.

    I find SUBs which lost through being maxed out on cheap credit and ineligible for new cards are worth more than the proceeds of the cheap credit.

    colinc57 40 posts

    Got about some chunky amounts on zero rate ( proportion came with a fee but still work it) …. However yes unlike the past ( particularly pre 2008) it has hit my “credit score” , albeit that’s not really an issue

    JDB 4,619 posts

    Got about some chunky amounts on zero rate ( proportion came with a fee but still work it) …. However yes unlike the past ( particularly pre 2008) it has hit my “credit score” , albeit that’s not really an issue

    Card issuers are more sensitive to the amount of unsecured debt people have in the current environment so it makes it more likely that other cards someone holds will pick this up and reduce credit limits or seek more information. Regulators are breathing down their necks to avoid consumers or firms ending up with excessive bad debts. That said, BNPL seems to be the elephant in the room they are all ignoring.

  • You must be logged in to reply to this topic.

The UK's biggest frequent flyer website uses cookies, which you can block via your browser settings. Continuing implies your consent to this policy. Our privacy policy is here.