My Fake Debt: How I Make Money From Credit Cards

My Fake Debt - How I Make Money From Credit Cards. Click on the picture to read how I use credit cards to earn passive income.

My fake debt – how I make money from credit cards.

Over the years, we’ve owed several thousands of pounds on credit cards, but I’ve never considered us to be in debt. We could have given it back at any time we wanted to – we used that debt to make money.

When is debt good?

Only when it isn’t real debt. If you have existing credit card debt, let me stop you here; this is probably not for you. Please read with caution, and focus on paying your real debt off before trying anything I describe.


Three ways that we earn money from our credit cards

We earn money from our credit cards through:
  1. Stoozing
  2. Cashback
  3. Loyalty points


Should you be afraid of credit cards?

1. Stoozing.

In 2014 and 2015, we made over £400 and £450 in interest, and we didn’t have as much “debt” to use as we do now. I’m hoping for this year to bring us much more.

Back in 2014, when Lord Balders and I were frantically saving for a house deposit, I started to read about stoozing.

We had a bank account paying a good rate of interest, but not enough cash to fill it up. I read about interest rate arbitrage and thought, “we could do that!” and from there on, we started doing exactly what we are doing now: building up debt.

Are alarm bells ringing? Well, turn them off. It’s simple: we open a credit card with a 0% interest introductory offer on purchases. The longer this offer period, the better. Then we use that credit card for every purchase we need to make.The cash we would have otherwise spent stays in the bank, earning (in our case 5% AER interest).

When the credit card’s introductory period is close to its end, we can either pay it off in full (as we did before applying for a mortgage last year) or look for a balance transfer card with another 0% offer to move it over to.

The most important thing here – the cash stays in the bank, earning interest.


Can you do this?
Only if you are already in complete control of your spending, and understand the terms and conditions of your own credit card. You must diarise the end-date of your 0% offer, and have an instant-access savings account to keep your money in.
It’s important that you’re able to access the money quickly, as, remember, it’s not your money!
Be prepared to pay it all back earlier than you planned if you make a mistake and go over your credit limit… and in case of unforeseen circumstances where you might want to pay it back early.

Do not try this if you find yourself buying unnecessary items just because you’ve got a credit card!

2. Cashback.


Last month, I was faced with a large car insurance premium. I could pay it, but I didn’t want to see so much money leave my savings – after all, I’m earning interest on that!After some research I applied for a new 0% balance transfer card with no fee (best bit!). What’s important here, though, is that I applied for it through TopCashback, and that they gave me £21 for taking out that credit card.


Why would anyone pay me for opening a credit card?

Well, the banks and financial institutions pay commissions for leads, and cashback companies give you (at least some of) this commission back. I always look for cashback deals before opening a new bank account or taking out a credit card. If you’re going to open a credit card, look around to see if there are any cashback offers for the one you want – you might as well make some money from it!
(Check out this post about what cashback is and where to find it.)

3. Points.


Back to the car insurance saga – I initially put the full cost of the car insurance on my Tesco Clubcard credit card.
This was a card that I had been stoozing with back when I first started, but the introductory offer has long since expired. If I use it now, I have to pay it all back in full every month. Still, I used it to make this large purchase because I knew I would get hundreds of Clubcard points for it.
Tesco Bank also does a friend referral scheme where you can get extra points.

Don’t overlook the value of points schemes on credit cards.

They may often not be much, but they’re better than the fat lot of nothing you’d usually get from your debit card!
I don’t have plans to travel, so don’t have much use for Avios, but when I do need to use that card, at least I’m collecting something for it that may be useful in the future.
Also, what about cashback credit cards? We collect 0.5% of our purchases by using one of our cards. Not the most we could get, but as that card is primarily for stoozing, it’s a welcome bonus.

 Don’t be loyal when it comes to credit cards!

In all, it pays to be a credit card tart.
Get a better card – you won’t hurt its feelings! Cardy McCardface in your wallet there isn’t your friend, so you don’t have to keep him around if he’s not doing anything for you. On the other hand, he’s not your enemy. He doesn’t make you go over your limit or pay late. You are in control.

Credit cards aren’t for everyone

No, stoozing is not for everyone. Actually, credit cards aren’t for everyone – but if you are financially responsible, then they can work for you, and they can be a lot more useful than you might have realised.

Over to you…

Have you tried stoozing, or is it more trouble to you than it sounds? Let me know!

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