Stoozing - Stoozing in Practice

Stoozing in Practice

While the simplest form of stoozing will involve one account directly repaying another, successful stoozing relies on being able to have several transferred balances at the same time in order to generate usefully large profits from the money in the "stooz pot" (usually a high-interest savings account). Stoozed balances are constantly running down, as every card requires monthly servicing payments of typically 2% of the reducing balance throughout the introductory period, as well as needing to be repaid at the end of the period. But, as the availability of introductory card offers varies significantly (that is, offers change), effective stoozers must research opportunities and apply for new credit cards speculatively as they arise - without guarantee of success - rather than simply when one introductory period ends.

Effective stoozing also relies on making successful applications for further credit. Each application made gives rise to a "credit search" in which the lender will examine the credit history (or "credit file") of the borrower. Credit histories are shared between individual card issuers and the commercial credit reference agencies (CRAs) maintaining such files. In the UK the main CRAs used are Experian, Equifax and Callcredit; in the US they are Experian, Equifax, and TransUnion. In addition, regardless of whether an application for credit is successful, the fact that a search will have been made on a person's file is itself recorded and made known to future lenders. To maximize the chances of success, applications should ideally not be made too frequently.

A less complex approach to stoozing is to apply for one credit card at a time, and to do so at least six weeks before any introductory period ends - giving sufficient time if accepted for the issue of a new card to transfer a balance off the original card - even if that is a few weeks before the original card's introductory period would have ended. However, expiration dates from differing introductory periods on different cards will inevitably become staggered and overlap with time. In addition, the amount of credit available from individual cards can vary greatly which complicates the practice of matching debts. The stoozer may therefore concentrate on one method for building their balances (for example by use of "super balance transfers") and quite separate methods for repaying them. In this case, the stoozer will only rarely employ an actual balance transfer in its precise sense of swapping debts. However, the objective always remains the same: to preserve or (re)build stoozed balances.

Due to the different features available on different cards, only the commonalities of stoozing with credit cards have been described. Secondary strategies that take advantage of specific features arguably justify the term 'stoozing' also. These can include:

• Using one credit card (if it allows) to make repeated balance transfers during the introductory period to meet the minimum payments on another card requiring them - thus maintaining a slightly higher balance average throughout the period on the former card.

• Using a credit card which offers 0% for a period on purchases (but not necessarily on balance transfers) to build up debt over the introductory period that can be transferred subsequently (sometimes referred to as 'slow' stoozing)

• Using a (rarer type of) credit card that gives interest free periods on balance transfers, in addition to normal purchases, to repay debt on an expiring card - then repaying this debt in full as a credit card account settled in full each month attracts no interest. For a brief period, the original debt is effectively carried beyond the end of its 0% rate.

• Using a 'mule' card. Here a card which allows no fee balance transfers from a bank account can be used to route 0% debt from other cards directly into a bank account.