For sometime now, Credit Cards have been a brilliant way of clearing debt, rather than having to take out a loan which will charge you on the amount you have borrowed. However, there is another way where you can avoid these annoying charges; in fact it’s practically free and is known as Stoozing. There is fierce competition in the credit card industry that many lenders have introductory periods of between 3 and 18 months during which they charge 0% interest on the card balance (commonly known as 0% interest Balance Transfers). This is done as a way of attracting customers, for example 0% interest Credit Card from Natwest and 0% Credit Card from RBS, which both offer 0% interest for the first 9 months. Offers such as these allow us to borrow money for ‘free’ which we can use to pay off your debts or move into a high interest savings account.
You can take advantage of the 0% introductory period by withdrawing the money to pay off your debt, as long as you ensure that you pay of the minimum monthly charge that the lender will charge you. At the end of the introductory period, if you haven’t cleared your debt, you can then transfer the balance across onto another credit card, starting the process again. This can be repeated until your debt is cleared and the great thing is that it is virtually free, avoiding those pesky interest rate charges that you face with loans. Check out the Motley Fool’s guide to see the best 0% interest credit cards and high interest savings accounts.
Alternatively, you can move the money of your credit card into a high interest savings account. At the end of the 0% introductory period, the money is withdrawn from the savings account and used to pay off the full credit card balance. The interest gained from the savings account is your ‘profit’. As with any other savings account interest, taxpayers need to pay tax on the interest earned.
However, rather than paying off the credit card at the end of the period directly from the savings account, you can apply for another 0% credit card to pay off the first one. This gives us the opportunity to keep the borrowed money in the savings account for a considerably longer time.
Another way of making money from Credit Cards is to put the borrowed money into an offset mortgage instead of a savings account. This helps to reduce your mortgage payments, earning you money that is usually tax free. For a list of the best offset mortgages check out the Motley Fool.
Typical Stoozers normally earn between £400 and £2500 per annum from Stoozing.
If you are new to Stoozing it is important that you read the risks that are involved as this could affect your credit history. You need to keep up with the paperwork involved with stoozing.
Help! I’ve Been Turned Down
You received an envelope in the mail with a great offer for a low interest credit card. You read all the details, even the boring small print and decided that this card fit your needs to a tee. You filled out the required forms and anticipated the day that the card would arrive - you even got to pick which background you got. However, what came in the mail was not an acceptance and a brand new card but a denial. What is your first reaction? Perhaps anger. Perhaps sadness. Perhaps fear. Yet none of these will help you get a card!
So, what should you do?
1. The first thing to do is read the letter carefully. Two important pieces of information must be included in the letter you receive when you’re credit application is disapproved: The specific reasons you were denied credit, or information on how to obtain those reasons, and, if a credit report was used in making that decision, the name and address of the credit reporting agency. Here are some possible reasons for denial:
Haven’t lived at your current location long enough
Haven’t been employed at your current job long enough
Your income is not sufficient to meet this particular creditor’s minimum income requirement
Information supplied by the credit bureau
2. If the reason for your denial is unclear to you, then call the company for clarification. What were the exact reasons? What were the exact standards that you did not meet? This information is important to know and understand. If you apply for credit again and are turned down, then this reflects poorly on your credit report. The best advice for this situation is to wait at least 6 months if you have been denied by two different companies in quick succession.
3. If you’ve been denied credit because of information supplied by a credit bureau, federal law requires the creditor to give you the name, address, and telephone number of the bureau that supplied the information. You should contact this agency for a copy of your credit report. Federal law states that you are entitled to a free copy if you’ve been turned down. Once you receive your report, check it for accuracy. Up to 40% of reports have errors. If you find an error, then you need to report this to the bureau in writing. Be sure to send along whatever proof you may have. Getting the credit bureau to investigate an error will not cost you anything and will save you a lot of time and frustration when it is corrected.
4. If mistakes on your report led to the rejection of your application, ask the credit bureau to send a corrected copy to the lender. Then you can ask the lender to reconsider your application. If however, you were denied because of a poor rating, only better spending habits and time will help you get the credit you desire.
About The Author
Wesley Atkins is the owner of which aims to get you fitted with the best credit cards to suit your situation. With numerous credit card articles and easy online credit card applications you will never choose the wrong credit card again.