malisab wrote:I used to go through all kinds of contortions to keep as much money as I could in a savings account that earned about 2% and was constantly worried that I'd misjudge something, even with YNAB's help as it was during my first year when those inevitable surprises would pop up. I realized that with the volume of money I was 'earning' about $5 a month and was costing myself untold hours in actual work to do it and (mostly) time spent in fear. I make one less Starbucks run a month and don't hassle now.
cooksey87 wrote:Well it's not debt to be paid off at the moment for me. I'm putting money into savings accounts instead of keeping in the black, because it's interest free. I'll just transfer it back once the interest free portion ends. But as I say, I guess there's not many people with interest free overdrafts anyway.
sarham wrote:cooksey87 wrote:Well it's not debt to be paid off at the moment for me. I'm putting money into savings accounts instead of keeping in the black, because it's interest free. I'll just transfer it back once the interest free portion ends. But as I say, I guess there's not many people with interest free overdrafts anyway.
It sounds like a loan to me. It is just that you are the borrower *and* the lender. You are borrowing from your checking acct to plump your savings acct. You will have to take that money from savings someday to repay your checking interest-free overdraft loan.
It is often said that YNAB doesn't care where your money is. In this case, some of your checking acct money is in your savings acct jar. I would make sure that I had a category like "checking overdraft" so that I knew that I had assigned the job of paying back the overdraft when the interest-free period is up. I would be nervous about giving that money multiple jobs.
Stoozing is a slang term used to describe the act of borrowing money at an interest rate of 0%, a rate typically offered by credit card companies as an incentive for new customers. The money is then placed in a high interest bank account to make a profit from the interest earned. The borrower (or "stoozer") then pays the money back before the 0% period ends. The borrower does not typically have a real debt to service, but instead uses the money loaned to them to earn interest. Stoozing can also be viewed as a form of arbitrage.
The word "stoozing" came into existence from posts on the Motley Fool UK discussion boards in early 2004. Many people were earning money on 0% deals before 2004, but one discussion board contributor, Stooz, was apparently prolific in this. This person's technique therefore came to be referred to as "doing a Stooz". In the United States, the term has gained a similar usage.
The term "rate tart" is sometimes incorrectly applied to this practice. A rate tart frequently moves an existing debt around in order to get the lowest interest rate, but has a real debt and does not do it to earn money.