Stoozing vs rewards cards

[richscape]

Nigel Keya wrote:

richscape wrote:

Bank account switching is great, but it’s a completely separate conversation to how to get a risk-free return on £10k+ of stoozed money.

You won’t get much better than 3-4% risk-free, you don’t have good options vs inflation

I know, which is why I was asking Peter K how would get a better risk-free return than bank accounts – which was the comment I was replying to. I suspect he could not get a better risk-free return, and whatever method he is suggesting has some risk.

[ed_fly]

andiron wrote:

If you spend £1000 a month for a year with reward card giving back 1% that’s £120 back in a year.
If you stoozed that amount monthly with an account 5% (like Barclays Blue) that would be £300. So saving account above 2% is better here.
Obvs other things to consider are sign up bonuses, credit rating and possibility of fine for paying it too late, savings tax.

agreed it surely it boils down to SUBs and other spend bonuses i.e. 2-4-1 voucher, upgrade voucher etc. otherwise 1% reward cards don’t stack up against stoozing on a financial basis. 20k annual spend on a BAPP would return 30k Avios, if your 20k stoozed returned £500 (2.5% averaged interest return), you could buy over 30k Avios in a sale.

[sloth]

ed_fly wrote:

andiron wrote:

If you spend £1000 a month for a year with reward card giving back 1% that’s £120 back in a year.
If you stoozed that amount monthly with an account 5% (like Barclays Blue) that would be £300. So saving account above 2% is better here.
Obvs other things to consider are sign up bonuses, credit rating and possibility of fine for paying it too late, savings tax.

agreed it surely it boils down to SUBs and other spend bonuses i.e. 2-4-1 voucher, upgrade voucher etc. otherwise 1% reward cards don’t stack up against stoozing on a financial basis. 20k annual spend on a BAPP would return 30k Avios, if your 20k stoozed returned £500 (2.5% averaged interest return), you could buy over 30k Avios in a sale.

But why wouldn’t you spend the £20k on the bapp, get the SUB and then balance transfer that £20k to another 0% card whilst keeping the spend in savings, thereby getting the best of both worlds..

[memesweeper]

sloth wrote:

ed_fly wrote:

andiron wrote:

If you spend £1000 a month for a year with reward card giving back 1% that’s £120 back in a year.
If you stoozed that amount monthly with an account 5% (like Barclays Blue) that would be £300. So saving account above 2% is better here.
Obvs other things to consider are sign up bonuses, credit rating and possibility of fine for paying it too late, savings tax.

agreed it surely it boils down to SUBs and other spend bonuses i.e. 2-4-1 voucher, upgrade voucher etc. otherwise 1% reward cards don’t stack up against stoozing on a financial basis. 20k annual spend on a BAPP would return 30k Avios, if your 20k stoozed returned £500 (2.5% averaged interest return), you could buy over 30k Avios in a sale.

But why wouldn’t you spend the £20k on the bapp, get the SUB and then balance transfer that £20k to another 0% card whilst keeping the spend in savings, thereby getting the best of both worlds..

The maths on that is often complicated by the balance transfer fee, although with interest rates rising it’s less of a concern.

If you send the (say) 20k of spend onto another card with 0% on spend, and use the funds released to pay off the BAPP, then we’re in less complicated maths territory, you can ignore any transfer fee cost. The only lost opportunity is (perhaps) more Amex spend.

If additional spend on a 0% on spend card is not Amexable in the first place we’re in no-brainier territory IMHO. HMRC, for instance (requires Curve).

[sloth]

I’ve just paid off my Amex with a newly opened NatWest balance transfer card, no fee

[Ash]

sloth wrote:

I’ve just paid off my Amex with a newly opened NatWest balance transfer card, no fee

Not even the usual minimum balance transfer fee?

[SteveJ]

Ash wrote:

sloth wrote:

I’ve just paid off my Amex with a newly opened NatWest balance transfer card, no fee

Not even the usual minimum balance transfer fee?

Currently no fee and no interest:
https://www.natwest.com/credit-cards/balance-transfer-credit-card.html

[Ash]

Thanks @SteveJ

[Harrier25]

SteveJ wrote:

Currently no fee and no interest:
https://www.natwest.com/credit-cards/balance-transfer-credit-card.html

…but you do need to be an existing NatWest customer for this balance transfer card I notice when clicking through the link.

[Rui N.]

Ash wrote:

sloth wrote:

I’ve just paid off my Amex with a newly opened NatWest balance transfer card, no fee

Not even the usual minimum balance transfer fee?

What? To make this work you have to use cards which offer no fees as a SUB. (In fact, I’ve never seen a card with 0% for X months as a SUB that charged transfer fees).
One that is available all the time is the Sainsbury’s Nectar cards.

[SteveJ]

Rui N. wrote:

I’ve never seen a card with 0% for X months as a SUB that charged transfer fees

Balance transfer fees are actually the norm, nil fees are the exception.

Relevant MSE article here
https://www.moneysavingexpert.com/credit-cards/balance-transfer-credit-cards/

MSE’s top 0% cards:
Sainsbury’s Bank up to 34mths, 2.88% fee
Santander 33mths, 2.65% fee
Sainsbury’s Bank up to 29mths, 1% fee
NatWest/RBS 22mths, no fee
Sainsbury’s Bank up to 22mths, no fee
Santander 21mths, no fee

Even that “no fee” Sainsbury’s one depends on applicant, many end up with 14mths, 1% fee.

[Rui N.]

On that list 50% have no fees…. But anyway, I thought it was pretty clear that this discussion was about cards that offer 0% fees as part of the SUB, as this strategy only of course makes sense if that is the case. I thought that was self evident, but alas, it doesn’t seem like it is.

And, of course, the “I’ve never seen” cards like that is on cards used for these purposes. Next some people here will be discussing interest rates increases on their cards.

[Nigel Keya]

Harrier25 wrote:

SteveJ wrote:

Currently no fee and no interest:
https://www.natwest.com/credit-cards/balance-transfer-credit-card.html

…but you do need to be an existing NatWest customer for this balance transfer card I notice when clicking through the link.

sure: [Available to customers who have a current account, savings account, credit card or mortgage with NatWest, and are UK residents, 18+ and earning at least £10K per year]

but how difficult is it to open a savings a/c?

[sloth]

Would make more sense to open a free current account surely? Particularly as if you have no current account you would be forced to go into the branch to make any withdrawals from the savings account if and when you needed to

And NatWest are currently offering £175 for current account switches

[rio]

another angle to look at
lets say I have a £10k 0% for 24 month, spend £10k in the first year and hold it for year 2
in year 2 you could get £500 (5% 1yr fix) risk free without additional spending, so this wouldn’t compete with your reward card spend

[Peter K]

You won’t get much better than 3-4% risk-free, you don’t have good options vs inflation

I know, which is why I was asking Peter K how would get a better risk-free return than bank accounts – which was the comment I was replying to. I suspect he could not get a better risk-free return, and whatever method he is suggesting has some risk.

I’m not going to say, but you might consider there some risk. Depends on your view on matters.

[andiron]

Can you balance transfer many times or is it just one off? (Keep moving £1000 monthly vs one big £10k initial move).

[Rui N.]

Normally you can transfer multiple times. But some are quite restricted and only allow fee-free transfers for the first 30, 60 or 90 days. Some allow fee-free transfers during the entire promotional period (so, 12/18/24 months usually).

[BuildBackBetter]

andiron wrote:

Can you balance transfer many times or is it just one off? (Keep moving £1000 monthly vs one big £10k initial move).

Fee-free and interest-free cards only allow you to BT for about 2-3 months.

[richscape]

BuildBackBetter wrote:

andiron wrote:

Can you balance transfer many times or is it just one off? (Keep moving £1000 monthly vs one big £10k initial move).

Fee-free and interest-free cards only allow you to BT for about 2-3 months.

That’s why Curve Fronted is useful – can do essentially do fee-free balance transfers to 0% purchase cards. The other benefit of this is that 0% purchase cards tend to have longer 0% periods than fee-free balance transfer cards.

[Rui N.]

BuildBackBetter wrote:

andiron wrote:

Can you balance transfer many times or is it just one off? (Keep moving £1000 monthly vs one big £10k initial move).

Fee-free and interest-free cards only allow you to BT for about 2-3 months.

My Santander 0% interest card is fee-free for the 24 months the 0% interest lasts.

[Rui N.]

richscape wrote:

BuildBackBetter wrote:

andiron wrote:

Can you balance transfer many times or is it just one off? (Keep moving £1000 monthly vs one big £10k initial move).

Fee-free and interest-free cards only allow you to BT for about 2-3 months.

That’s why Curve Fronted is useful – can do essentially do fee-free balance transfers to 0% purchase cards. The other benefit of this is that 0% purchase cards tend to have longer 0% periods than fee-free balance transfer cards.

And if you do that on the Sainsbury’s Nectar cards you even get Nectar points…