Getting interest free money using credit cards

Introductory interest free credit cards have been used by card holders to get large interest free money over a long period of time.  The practice of taking advantage of a succession of interest free introductory offers for credit cards is often known as “stoozing”.  This equivalent of an interest free loan is very possible, but it needs a good degree of organisation and discipline.

It is important to understand why banks and other credit card issuers offer the interest free introductory rates.  It is done as a way of increasing market penetration of the credit cards without spending the money on marketing or advertising.  Credit card companies spend a large amount of money on advertising their cards to the public.  After a while a number of banks decided that it may be cheaper and more effective to compete on price, but not over the long term but for a short term basis.

This meant that there were a number of offers that started to be made for getting the credit cards.  At times a signing on bonuses is paid to new card users, sometimes in the form of money on the card but in many cases in the form of accelerated rewards (such as higher amounts of cash back in the first few months).  There were also limited periods of low interest spending on the credit cards.  Finally there were low and zero interest balance transfers from one credit card to the new credit card.

These balance transfers are almost all time limited, restricted to new members and do not apply to spending on the card.  These restrictions dictate how the balance transfer needs to be dealt with.

Firstly a careful note needs to be made of when to change the credit card.  This is not simply the last day of the interest free period but the time that is needed to transfer the balance between the credit cards.  This needs to be kept to.

There is then a discipline that needs to be maintained with the credit card.  There should be no spending on the credit card, as the interest can negate any savings using the card.  If necessary a separate card should be taken for the spending.

Cards should also be cancelled after the credit cards have been used.  This is because most of these offers are only open to new customers.  After about 12 months the user will become a new user again.