When you make a purchase using a credit card, you can borrow free of interest for 45 to 59 days, depending on the card. By choosing to make more purchases with your credit card, your money stays in your current account for longer, earning more interest. So you're earning interest on money you've already spent!
You could:
* Put the weekly food and petrol bill on your credit card * Use your credit card for larger transactions * Time your larger transactions to hit the start of the statement, so that you earn interest on your spent money for longer.
Be warned that this approach will cost you a lot more in debt interest if you do not pay the card off in full at the end of each month.
A good bank account will be able to net you at most ?40 per annum using this method, but you can also do this using one of your credit cards!
Compare credit cards and current accounts online.
2. Borrow money to make money
With the stoozing technique, you look for credit cards that not only have 0% balance-transfer deals, but which also allow you to pay off overdrafts.
But, of course, you don't have an overdraft! So when you pay it in to your current account, it puts you further into credit. You then transfer the money to a decent easy access savings account (which you had opened previously), to earn you some interest.
A month before the 0% deal expires, you transfer the money back to your current account and pay off the credit-card debt.
This technique is not as profitable as it used to be, because 0% balance-transfer deals now come with a 2-3% fee! To make this technique profitable, you must transfer the money as soon as the card account is opened.
You must also stick to credit cards with good terms, such as those with 12-month deals and 2% fees. If you transfer a ?10,000 balance the fee is ?200. Even so, if use a savings account paying 5%, a higher-rate earner could expect to be almost ?100 better off and a basic-rate taxpayer closer to ?200.
See our 0% balance-transfer cards. One card suitable for stoozing is the Capital One Platinum Credit Card. Also, compare savings accounts.
