Stoozing, the 0% interest rate credit card hack

How does stoozing work?

Stoozing refers to using a credit card with an introductory 0% offer and putting that money somewhere else where it can earn interest.

If you're savvy with your spending, it basically switches from having to pay interest charges to earning interest by taking advantage of a 0% purchase rate credit card offer.

How to earn interest off a 0% credit card

The trick with stoozing is to use a 0% purchase credit card in conjunction with a high interest savings account.

1. Open a high interest savings account. If you don’t already have a savings account, open one so that you can start growing your balance and earning interest on your money.
2. Apply for a 0% purchase rate card. Keep in mind that the longer the 0% purchase rate period is, the greater the opportunity you’ll have to earn interest on your savings.
3. Use your credit card for all purchases. Instead of spending your own money, start using your card. Then put the money you would normally spend into the savings account so that it contributes to your interest earnings.
4. Make payments off the credit card. You’re required to make the minimum repayment each month, which is usually 2–3% of the balance. Your repayments will increase as you spend more, but so will the interest you earn on your savings.
5. Pay off the credit card. At the end of the purchase rate promotional period, you withdraw enough money from the savings account to pay the credit card in full. Anything leftover is a bonus.

This type of credit card hack requires a solid budget and high level of discipline to avoid additional charges or credit card debt.

Example: the 0% credit card hack in action

• You take out a credit card with a 0% interest rate offer for 6 months and a max credit limit of $50,000, which you get approved for.
• The card has a $100 annual fee.
• You estimate you'll spend around $40,000 on living expenses on the card in those 6 months.
• The card requires a minimum monthly repayment of 2% of your balance, which you pay using your monthly salary (you don't touch the money in the savings account).
• You put $40,000 into a savings account with a 4% interest rate. Over 6 months you earn $808 in interest.
• You use the savings to pay off your card debt just before the 0% interest rate ends.
• Minus the annual fee you've earned $708 in interest.

Our expert says: Using your credit card with a home loan is easier

"This stoozing hack is tricky to pull off. It requires a long 0% card offer, a high savings rate, discipline, and low card fees. An easier alternative with similar benefits is the home loan offset credit card hack. Basically you just put all your savings in your home loan's offset account (if it has one) and cover your living expenses with a credit card. Any dollar you save in the offset reduces your interest charges. You just need to take money out of the account each month to pay off your card spending before interest charges on the card kick in."

Richard Whitten

Senior Money Editor

Risks of the 0% credit card hack

• Eligible purchases. 0% purchase rate credit cards don’t cover all credit card purchases. For example, many consider utility and service provider payments as cash advances, which could unravel your stoozing strategy.
• Interest charges. This whole strategy only works if you pay the card spending off before you get hit with interest charges. This hack has a serious risk: if you forget to pay off your card spending during the 0% offer period you'll get hit with high interest charges on a big balance.
• Minimum repayments. Even with a 0% offer you still need to make minimum monthly repayments. This is often around 2% of your balance. This reduces the amount of money you can put into your savings account.
• Credit limits. This trick only really makes money for you if you spend a lot of money on the credit card. Because the more money you avoid spending, the more you can save and earn interest.
• Credit card annual fees. Credit card annual fees can eat up the earnings you make from savings account interest payments.
• You need a high interest rate on your savings account. This trick requires high savings account interest rates. When rates are really low you just won't earn much interest.

Written by

Sally McMullen

Journalist

Sally McMullen is a journalist with five years of experience covering credit cards and consumer finance. As co-host of the Two Broke Chicks podcast and co-author of Rich In Life, Sally shares valuable money-saving tips and life lessons with her audience. Sally was a Credit Cards Editor at Finder from 2015 to 2020. See full bio

Co-written by

Richard Whitten

Senior Money Editor

Richard Whitten is Finder’s Senior Money Editor, with over eight years of experience in home loans, property, credit cards and personal finance. His insights appear in top media outlets like Yahoo Finance, Money Magazine, and the Herald Sun, and he frequently offers expert commentary on television and radio, helping Australians navigate mortgages and property ownership. Richard started his career in education and textbook publishing in South Korea. He holds multiple industry certifications, including a Certificate IV in Mortgage Broking (RG 206) and Tier 1 and Tier 2 certifications (RG 146), as well as a Bachelor of Education from the University of Sydney and a Graduate Certificate in Communications from Deakin University. See full bio

Richard's expertise

Richard has written 688 Finder guides across topics including:

• Home loans
• Credit cards
• Personal finance
• Money-saving tips