What is stoozing and what are the benefits and risks of stoozing?



What is stoozing and what are the benefits and risks of stoozing?

A lot of us are skeptical as to whether we should use a credit card or not. Today I am gonna make that simple for you. 

What is stoozing?

Stoozing is making use of interest-free credit or 0% credit to earn some free cash which would have not been possible if you were an only debit card user. 

Basic Version:

The basic version of stoozing would be to make as many purchases as you can through your credit card and maintain an equivalent cash balance in your bank account or in money market instruments like liquid funds. Now, by "as many purchases" I mean the purchases which you made earlier as well but through your debit card. Liquid Funds usually give 7% interest per annum. The question is where is the profit. Well, earlier you would have spent the money from your bank account and you wouldn't have been able to earn any interest on that money. But now, using credit card u have made the purchase and you also have money in your bank account which is earning interest. The interest is your profit.

Advanced Version:

The advance version of stoozing would involve looking out for money transfer credit cards. Money transfer credit cards allow you to transfer the debt balance to your bank account and you can repay them as the free credit period expires. In this version, you can transfer the 100% limit of your card to your bank account and the invest that in a liquid fund or simply in a high-interest saving account. When the credit period expires make payment for the same with the transferred balance and you will be left with some profit.

Benefits and Risks involved:

Stoozing is just a way to make a small amount of easy money. But yeah, though there are benefits like readily available cash balance in your account and interest income, there are some associated risks as well. 

The risks would involve getting addicted to unwanted purchases, not reading the documents properly for any hidden charges, not paying off the credit on time and not checking your credit score regularly. 

If you don't pay off your credit on time you will wipe off all your profits due to the interest charged on the credit. After becoming a regular stoozer you need to keep track of your credit score.

Consequently, it is up to you to decide whether you want to shell out a few minutes of your month and earn some free cash or let go of it, thinking small profits don't matter.

Follow @rdhmfinance on instagram for latest updates.

Thanks for reading!
Please comment on any financial query you had like me to address. I will try to post something worthwhile. 

Coming up Next: What are the key factors that drive the stock market up and down?

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