My Experience with Credit Card Stoozing – Round One

Credit Card Stoozing…

I had often wondered whether I could transfer an amount off an introductory offer credit card to my offset account; or whether is was even legal to do so.

Apparently it is; and it is a great way to decrease the amount of interest you pay on your mortgage.

But what’s the catch? If you transfer the maximum amount as a balance transfer off a credit card to your offset account, you can save on the interest in the mortgage whilst paying no interest on the money borrowed (for a period of time).

Right. But… You would have to be disciplined.

It’s a trap!!

These offers are setup as a trap, to lure in unsuspecting customers who are unlikely to pay off their credit card prior to the interest free period running out.

The banks have done their numbers (they’re quite good at doing these numbers things) and have found that we are unlikely to to disciplined, and we are going to end up paying interest on these credit cards.

Why do the banks allow credit card stoozing? It’s a numbers game for the banks. Sure they will take a financial hit for those of us that take advantage of these interest free schemes; but in the grand scheme of things they ultimately make much more ¬†money from the undisciplined credit card holders they they suck into the vortex.

So, you have to be incredibly disciplined if you want this to work for you.

Or… What I prefer… you have to set it on AutoPilot, forget about it, and enjoy the interest savings.

My Plan of Attack

So… I wanted to have a crack at this credit card stoozing scheme. So, I formulated my plan. I felt like George Clooney in an incredibly bad (and boring) Ocean’s Eleven spinoff except this way of robbing the bank is legal.

So, I started to plan ‘Stooze don’t Lose’.

Step 1: Take out a credit card with a 0% interest period.

Step 2: Transfer the credit card balance to the offset account.

Step 3: CUT UP THE CREDIT CARD!

Step 4: Setup an automatic transfer of that amount back onto the credit card account towards the end of the interest free period.

Step 5: Rinse and repeat.

MIND BLOWN! RIGHT?!?!

I’ve always thought of credit cards as being evil beasts that suck the life out of even the most frugal of us. I never thought that they could be a tool to help me on my way to financial freedom.

Now, to put it to the test. Surely something will come up in big red writing at some stage saying that what I am trying to do is illegal.

I can’t believe I’m considering this (getting a credit card).

Why do banks allow this? Surely someone is going to call the police on me if it works.

 

Everything was going swimmingly..

It’s incredibly easy to apply for a credit card.

I just clicked on the one that had the annual fee waived with an introductory offer of 0% for balance transfers for the first 12 months.

And then… I hit a SNAG!

Wow, don’t they make things difficult for you?!?!

To think that I actually thought that credit card stoozing would be easy peasy lemon squeezy… It’s actually difficult difficult, lemon difficult.

Unfortunately for me, Westpac did not ‘have an agreement’ with my particular financial institution for balance transfers.

*Lightbulb moment*

Where there is a will, there is a way.

But I have my ING and Commonwealth Visa Debit Cards, perhaps I can organise a balance transfer to them, and then transfer the money from there to my OffSet Account.

Brilliant!

Nope, Nope, Nope!!

I tried to go through this process, and ended up being stuck in the same spot as before. the lovely lady on the other end of the phone (she really was lovely) notified me that it was not possible to organise a balance transfer to a visa Debit card, as there was no balance owing on the card to be transferred.

Damn, Damn, Damn!!

I was stumped, and here I thought I’d be printing free money by now.

Disgruntled and incredibly annoyed that my little scheme had fallen flat on it’s face, I packed up my bat and ball and decided that I didn’t want to play anymore (just kidding).

So, I called up, cancelled the card, with the intention of trying again when I worked out another method.

Watch out for Round 2!

I’m thinking that two credit cards may be required for this little scheme to work.

I think I might try that with the next effort (I’m determined to make this work, as I’m committed now).

You’ve won this round banky mcbankyton. :/

Conclusion for Round 1: FAIL!

Cheers, FIER

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