What is Credit Card Stoozing?

Stoozing is a technique is sometimes used by investors as a way to earn interest on money that is borrowed for free. This is a strategy that is often used in conjunction with credit cards that offer a 0% introductory rate, but the key is in knowing how to find a great deal on a credit card. Then before the introductory interest rate expires, the individual takes the necessary amount of money out of the savings account and pays off the debt. The money that was earned from interest can then be kept by the individual as profit.

Snoozing is essentially a type of arbitrage investment. The investor takes advantage of the free money that is available from interest-free credit cards. There is very little risk involved with this type of investing because the money is sitting in a bank account that is guaranteed by the Federal Deposit Insurance Corporation (USA), (UK) or Australian government (Australia). Then you simply have to take it out of the account to pay off the balance at the end of the term.

Throughout the process, you will most likely have to make a minimum payment to the credit card company each month. For this payment, you could take money out of the savings account, or you could make the payments out of your own money each month.

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Although this type of investment can be beneficial as it essentially earns you free money for doing very little, it does have some limits. For instance, you typically will not earn that much from this form of investment. With interest rates on savings accounts very low, you may not be able to earn that much for your trouble. For example, if you borrow $10,000 from a credit card and you earn 2% per year from a saving account, that would get you an extra $200 for this process. If you must pay an annual fee for the credit card or any other type of transaction fees, then this quickly eat up the profit that you would make. When you have to deal with $10,000 just to make $100 or $200, it may not be enough profit for you.

What is Credit Card Stoozing

The primary advantage of this type of investment is that you don’t really have to do anything to earn the money. You are not really putting the money at risk because it is safe in the bank account, and you simply sit back and collect interest. This allows you to focus on your job and other projects without having to worry about losing any money. By comparison, with other investments, you must continually check up on them to make sure that they are performing and deal with minimizing risk. This investment has no such requirements and is basically a “hands off” way to earn money.

Stoozing Tips


If you are thinking about getting involved with credit card stoozing to earn a few extra dollars, you need to keep a few tips in mind.

Go for long balance transfers:

When you engage in this activity, you need to look for credit cards that offer the longest introductory rate periods. For example, some credit cards come with introductory interest rates of up to two years. This will provide you with interest-free financing for a longer period of time, so that you can continue to earn interest on the money.

Always pay your minimum repayment on time:

When stoozing, you also must make it a priority to always pay your minimum payment on time. If you are even one day late on your minimum payment, the introductory interest rate on the credit card can jump up to the full rate, which could be 20% or more. If this happens, your entire plan goes out the window. You’ll then have to pay interest on the balance on the card. This means that you’ll have to take the money back out of the savings account and pay off your card if you want to avoid the interest fees.

Shop around for savings accounts:

When stoozing, you should also shop around for the best savings account to use. Some savings accounts have restrictions such as a minimum balance or a maximum number of transactions. Make sure that the same is account you choose is compatible with your stoozing strategy.