Martin Lewis was thrilled as he shared a way to make an extra £300.
The Money Saving Expert is renowned for his savvy financial advice. The consumer champion has offered valuable tips to help people navigate their way through the cost of living crisis.
The 51-year-old has taken to Instagram to reveal that people can make hundreds with a technique called "stoozing", which is the clever use of credit cards. He said: "In c2001 online bank Egg gave me a 0% card, I took £5,000 from it and put it in the top savings, which happened to be with... Egg!
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"So, I earnt 6% [£300/yr] on money it lent me for nowt! It’s called STOOZING and its back!"
The idea behind stoozing is to make money by getting interest on cash credit card firms lend at 0%. In the Money Saving Expert newsletter, Martin said stoozing is only for the debt free and financially savvy.
He added: "If you're not too on top of things, don't understand, don't have financial self-discipline, or have other credit card, overdraft or loan debt, this ISN'T for you, as mistakes cost. If in doubt, don't. Plus you'll also need a reasonable credit history to get a decent credit limit."
He explained the first step is to get long 0% new borrowing card. Martin said: "This is a card you can do new spending on without paying interest. The easy way is to use the 0% Card Eligibility Tool to find which you're likely to get (including some pre-approved), therefore minimising applications which mark your credit file."
Martin then urged people to do all normal spending on this card. He added: "Do all your spending (and possibly your family's too) on it up to the credit limit. Yet don't spend more than normal. You will need to make monthly repayments, and this is a rare occasion where the right tactic is to just pay the minimum."
He then explained that people should put the unspent money from your bank account in top savings. He said: "As you've spent on your credit, not debit, card this should build up a mirror amount of unspent income in your bank. So each month sweep that into the top savings account. For ultimate safety, keep it in top easy-access (currently 3.85%) as technically card debt can always be called in at any time, though I've not heard of it happening when stoozing. Or you could lock some away in a top fix (1yr 5.25%) as long as it ends BEFORE THE 0% ENDS, so the debt can be paid off."
Martin finally shared a clever way that people can extend the stooze period as he added: " In the MONTH BEFORE THE 0% ENDS, either use the money in savings to clear the 0% debt before any interest is charged, or shift it to a 0% balance transfer, a fee-free one's best to maximise the gains. Yet even if you're aiming to do the balance transfer - don't let that tempt you to go for a longer savings fix, just in case you're not accepted. Of course, with a decent credit score and careful management, you can do this with more than one card and build your stooze-pot, so you're earning more."
You can read the full guide on stoozing in the latest Money Saving Expert newsletter here
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