Stoozing
 

I'd be interested in peoples views on this. I'd be particulary interested in the view of Paul M.


The idea is you get interest free cash from credit cards, bank it, make interest and then pay the cash back when the interest free offer expires.

Surely if you do this enough all at the same time your credit rating will plummet and potentially your mortgage lender could insist on you paying off your mortgage or reposession starts?


http://www.moneysavingexpert.com/cgi...76883546,34894

Re: Stoozing
 

LOL uumm tell me how if you havnt defaulted on your mortgage payments they would have any grounds to demand payment in full for it and or get a repossesion order ?

Re: Stoozing
 

This quote from that page sums it up for me:

You need an 8 grand credit limit to get profits of around £300. You really need quite a credit limit to make substantial amounts of money. Not worth the hassle in my opinion. Specifically if it can affect your credit rating.

Re: Stoozing
 

Interesting idea, but most credit cards charge a fee for cash which is not insignificant. You'd have to find an account that pays enough interest to offset the cash fee AND to make a profit too.

When you have found an account that pays such a rate, please let us all know ;)

But the scheme suggested here is a little grander, and hence also riskier - so read carefully before applying! Caveat Emptor etc.

Your credit rating is barely affected by borrowing on a credit card that is paid off before interest is charged.
Paying your regular monthly minimum and managing the interest charges etc. is more likely to cause your credit rating to increase.
Failing to pay more than 1 or 2 monthly payments will very quickly push your credit rating down.

So, since the scheme suggests borrowing on the card and then paying off before the 'free' period expires, I suspect there would be minimal effect on your credit rating - it might even improve since you're managing a high credit level without defaulting.

Another thing that can adversely affect your credit rating are getting quotes on loans and then not taking them out (as the quote will do a credit check.)

Re: Stoozing
 

surely the interest you make would be less than the interest charged :confused:

Re: Stoozing
 

if your no longer worthy of the credit that the lender based its lending to you on. i dont know if banks and building societies check this after the loan was issued but i would expect that they do.

Re: Stoozing
 

It uses the 0% introductory offers, so you don't pay interest.

Re: Stoozing
 

you get the cash interest free for say 6-9 months :dunce:

Re: Stoozing
 

They cannot terminate a contract based on the principle you may default as you have over hit other credits, hell even if you default some ie you become sick etc, theres scope to re balance the books. You would then be up for a potential evalutation fee on your property to ensure its worth more value than is *secured* against it.

Credit cards mean nothing, they have no security and can do nothing but accpet payments either offered by yourself or applied by a court ruling.

Re: Stoozing
 

I see no reason why a bank/mortgage lender would re-assess your credit rating on an existing loan, unless you failed to make a payment or asked to reschedule the loan.

Re: Stoozing
 

the reason i can see is risk. They would be aware if they reassed you that you were now a higher risk. My question is, do banks and builidng societies do this periodically?

Does anyone know the answer for fact as opposed to opinion?

Re: Stoozing
 

fact is risk assesment after the fact is too late and still even if it was done the mortgage lender has to have grounds to terminate a contract, and that means it *has* been breached not it might do. If a contract was terminatable based purely on a suposition a breech may occur then what is the point of the contract in the first place ?

Re: Stoozing
 

My 'opinion' is based on my many dealings with financial institutions over the years, including working for 2 for some years.

Once they have your business, they internally credit score you, and they track your account to determine their exposure (to financial risk) from your account. And that's based on your payment record to them.

Now, this is based on how it works in the credit card business - as I was told it.

I have also come across having had a credit check upon changing a loan/terms/schedule - because it's at that time they need to re-assess why you might be doing that - clearly if you're suddenly showing up with a bad credit rating, then it may (or may not) be in their interest to allow you to do so.

So I would not worry about my credit rating if I were to partake of this scheme, but I'd be extremely worried about making a mistake in managing it ending up costing me hundreds, if not more.

Re: Stoozing
 

Yes they do, Banks regularly credit check their existing customers, this then enables them to see what other products they can offer you. It's all down to up selling on their part, most banks even do a credit check on you before upgrading your card from solo to switch/maestro.

Not really something you should worry about.

As for the idea here, well yes it'll help your credit rating, BUT you'll not make a much money on it. Even though there may be no interest charged on balance transfers and purchases, there sure as hell will be fees and interest on cash advances. There always is.

Re: Stoozing
 

Find out if your bank is checking your credit.

http://www.uk.experian.com/

Will show you in detail who is making credit checks on you, when and why.

Re: Stoozing
 

ive been told that there a few that offer a 100% free cash advances.
However if this is not available you can still do this based upon your normal spending. If you always pay you credit card bill off in full you could accumulate an interest free balance and then depost the cash that you would have used to pay the balance in an interest earning account.

Re: Stoozing
 

If I were to accumulate an interest free balance it would have to be by doing a transfer to another credit card who are unlikely to match my £27k credit limit.

What I couldn't grasp is who would let you do a balance transfer from their credit card to a personal bank account? I wouldn't have thought it was at all possible.

Re: Stoozing
 

There is no mention of transfering a balance to a personal bank account :confused: why would you do that as a credit card balance would be a negative bank balance :confused:

The point is either :-

Get a cash advance from the credit card which is interest free and pay it into a bank account

or

use the credit card and when you get the bill at the end of the month, rather than settle the bill make use of the interest free facility by leaving the outstanding balance but pay the cash that you would have used to settle the bill into the interest earning account

Re: Stoozing
 

Walks into bank: Hi there, can I have a £27,000 cash advance please :Yikes:

Re: Stoozing
 

some credit cards do cash advances by cheque

Re: Stoozing
 

That's not quite the same is it? ;)

Re: Stoozing
 

dunno, i thought the ones i get are. But then again the ones i get arent interest free

Re: Stoozing
 

There was mention of transferring money from your credit card to your bank account in the link in post #1 and it was referred to as a super balance transfer.

I know of no credit card company that will give you an interest free cash advance and doubt there is any that would.

Re: Stoozing
 

ahhhhhhhhh whooops on my part , no need to call me a :dunce: though ;)

Re: Stoozing
 

i did, or didnt you understand that either :D