If you are new to stoozing and haven’t had much involvement with credit or credit cards in general you may not understand the term ‘balance transfer’. It is a term you will see used a lot on this site as it forms the backbone of stoozing.

Balance transfer is essentially the transfer of debt from one credit agreement to another. Mostly we are talking about transfer of a credit card balance from one card to another with a more favorable APR.

Credit card companies offer special balance transfer deals to bring in new customers. The deals are naturally good, usually better than any standard rate offered by a credit card. These deals usually expire after a period (3-12 months), and are replaced by the companies standard rate.

Consumers choosing to transfer a balance will save money on interest charges, this extra money can be used to pay off the balance earlier or to give the consumer more to spend each month. Wiley consumers (or ‘rate tarts’) change their card as soon as the introductory balance transfer rate expires by performing a series of balance transfers, essentially keeping their debt at a low or 0% interest rate indefinitley. Greedy credit card companies do not like this but there isn’t much they can do about it

There are potential pitfalls with balance transfers. Consumers should read the small print of any contract they enter. Pitfalls include charges to perform the balance transfer (which may exceed the potential saving or profit to the consumer), different APR rates on spend and payments against the card being applied to the lowest APR item first among others.

Stoozing credit cards to save or make money is becoming more popular. Stoozing involves taking on ‘cheap’ or ‘free’ credit card debt in the form of low interest or interest free balance transfers. This money can then be used in various ways to make you better off!

If you have existing credit card debit or loan debit it is (usually) best to pay this debt off as fast as possible. Interest rates on loans and standard rate credit cards tend to be high. Paying off existing debt with your stooze money makes sense as more of the money you pay every month will be going on paying back the capital as you will not have interest to pay.

Many stoozers are savvy money-wise, and have flexible mortgages. If you have a flexible mortgage you can use your credit card stooze money to offset part of the capital outstanding on your mortgage. You will then have that part of your mortgage free of interest – and interest is the largest part of your mortgage. Imagine – a free mortgage!

If you have no debit and no mortgage (lucky you!) then you can still gain by stoozing credit cards. Taking the funds from your stooze card and placing them in a high rate savings account will make you money! Many people use mini-cash ISAs for this purpose, as interest earned inside an ISA is free of tax.

When the interest free period on your stooze credit card is coming to an end you can apply for another card to stooze. If you are going to do this be sure to leave plenty of time – credit card approvals take 6-8 weeks on average. Be sure to shop around when choosing a credit card, some credit card companies are starting to charge a fee for balance transfers (around 2%). This can make the incentive offer almost worthless! In addition, try to find a credit card company that is stooze-friendly and will allow you to transfer your whole available balance to your current account for no fee.