Stoozing - Method

Method

Credit cards in the UK will typically offer 0% interest on a balance transfer for 6–12 months for newly opened credit card accounts. Credit cards in the United States have similar offers. In both countries, credit cards may also offer a similar period in which purchases made with the card do not incur interest.

A "stoozer" will take advantage of the time in which there are no interest payments due on the loan by transferring their new credit card limit into a savings account rather than paying off an existing debt. This is done by making a "balance transfer", which is usually taken to mean a payment made by the credit card issuer to a third-party on behalf of a borrower in settlement of a debt (the balance to be transferred) that the borrower has with that third party. However, a stoozer typically has no indebtedness, so any payment made on their behalf can be used to preserve their savings account balances elsewhere at no (or low) interest cost to them. Several devices exist to maintain (and indirectly build) saving account balances in this manner:

• Credit card cheques (checks) issued to the borrower allow them to directly credit themselves rather than pay down an existing debt immediately (which may have some time itself remaining of any introductory period).
• A balance transfer from a credit card with no (or smaller) debit balance to create an intentional credit balance on the account which the borrower can seek to recover either gradually (e.g. day to day purchases) or instantly (e.g. cheques issued by the secondary card to the borrower). Although some card issuers may balk at issuing a check for a $50,000 credit balance, in the United States, they legally have no more than 7 business days to issue the check from the date the request is received.
• A direct credit made to the personal bank (checking) account of the borrower, with the knowledge of the issuer, at their request. (This has become colloquially known as making a Super Balance Transfer - or sometimes 'SBT')

It is also possible to use cards which offer 0% on purchases. Whereas normally the user must pay their credit card debts by the end of the month or face interest charges on any balance left on the card, here the 0% debt is built up by spending on the card with only the minimum repayments repaid. The user can then pay the money they would have paid to their credit card account into their own interest-bearing account instead. At the end of the 0% period the debts can either be paid off or the balance transferred to another card.