| Credit Card Stoozing — Key Facts | |
|---|---|
| What it is | Borrow on a 0% purchase card; deposit the equivalent cash in a savings account earning interest |
| Profit source | Interest earned on savings minus any card fees |
| Current opportunity | 0% purchase cards available for 12-24 months; easy-access savings paying 4.5-5% AER |
| Risk 1 | Missing minimum payment triggers loss of 0% rate and potential default charges |
| Risk 2 | Credit utilisation increases while 0% is active — can affect mortgage applications |
| Risk 3 | Revert rate after 0% is typically 25-30% APR — must repay before expiry |
Stoozing is an arbitrage strategy: borrow money at 0% interest on a credit card, deposit the equivalent amount in a high-interest savings account, earn interest on the money for the 0% period, then repay the card in full before the 0% period ends. The profit is the interest earned minus any card fees. In 2026 with savings rates at 4.5-5% AER, a £5,000 stooz over 18 months can generate £337-£375 before tax. It requires discipline and careful tracking but carries no market risk if executed correctly.
How Stoozing Works Step by Step
Step 1 — Apply for a 0% purchase credit card with a long introductory period. In 2026 the best deals offer 18-24 months at 0%. Note: the credit limit offered may be lower than advertised and depends on your credit profile.
Step 2 — Make a purchase on the card to draw down the credit (classic stoozing uses everyday spending you would make anyway). Some stooze strategies use the card for all normal spending while keeping the equivalent cash in savings, rather than a direct cash transfer.
Step 3 — Deposit the equivalent cash in a high-interest easy-access savings account (currently 4.5-5% AER at best-buy easy-access accounts). The cash must be accessible to repay the card at the end of the 0% period.
Step 4 — Pay the minimum monthly payment on the card every month by direct debit. Missing even one payment can void the 0% rate and trigger an immediate revert to 25-30% APR on the entire balance.
Step 5 — Repay the entire card balance in full before the 0% period ends. Set a calendar reminder 2 months before the end date.
The Numbers in 2026
| Scenario | Card limit | 0% period | Savings rate | Gross profit |
|---|---|---|---|---|
| Conservative | £3,000 | 18 months | 4.5% AER | ~£202 |
| Moderate | £5,000 | 18 months | 4.8% AER | ~£360 |
| Aggressive | £10,000 | 24 months | 5.0% AER | ~£1,000 |
| 💡 Tip: The profit is subject to income tax on interest over your Personal Savings Allowance (£1,000 for basic rate taxpayers; £500 for higher rate). Use a cash ISA for the savings portion to shelter the interest if you are close to your PSA limit. |
Risks and How to Manage Them
| Risk | Consequence | How to mitigate |
|---|---|---|
| Missing minimum payment | 0% rate voided; reverts to 25-30% APR immediately on whole balance | Set up direct debit for minimum payment on the day the card arrives |
| Overspending on the card | Balance exceeds savings; cannot repay in full | Keep a separate spreadsheet; never spend more than your savings pot |
| Savings rate drops before repayment | Lower profit than expected | Lock savings in a fixed-term account if you have a firm repayment date |
| Credit utilisation impact | Higher balances reduce credit score temporarily | Avoid mortgage or major credit applications while stooz is active |
| 0% period ends early (missed payment) | Immediate high-rate interest on entire balance | Calendar reminder; direct debit; check statement monthly |
| Card provider withdraws 0% offer | Rate reverts early | Read all communications from card provider carefully |
Stoozing vs Balance Transfer Stoozing
Classic stoozing uses 0% purchase cards. A variant uses 0% money transfer cards — these allow you to transfer cash directly into your bank account (not just make purchases), subject to a transfer fee of typically 1.5-4% of the amount transferred. A 4% money transfer fee on £5,000 costs £200 — which at 4.8% AER savings over 18 months generates £360 in interest, netting £160 profit after fees. Lower margin than purchase stoozing but usable without needing to spend on the card.
Impact on Credit Score and Mortgage Applications
Stoozing temporarily increases your credit utilisation ratio (balance as a percentage of available credit). High utilisation reduces your credit score modestly. More importantly, mortgage lenders often ask about credit card balances and a large outstanding balance — even at 0% — can affect affordability assessments. If you are planning a mortgage application within 6-12 months, clear the stooz position first. (Source: FCA — responsible lending guidance)
| Disclaimer: This article is for information only and does not constitute financial, legal or tax advice. Figures correct at date of publication but subject to change. Always verify with primary sources (gov.uk, HMRC, FCA register) and consult a qualified adviser before making financial decisions. |
Frequently Asked Questions
Is stoozing legal?
Yes, completely. You are using a credit card exactly as designed — making purchases on credit and repaying in full. Managing cash flow to profit from the 0% period is a legitimate personal finance strategy.
Will the card provider close my account if I stooz?
No — card providers cannot close your account for using 0% credit legally. However, they may not offer you another 0% deal when you reapply, as your payment behaviour (paying in full every month) is unprofitable for them. This does not affect your credit file.
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