Glossary: Rate tart
Somebody who either switches from one credit card to another so they can take advantage of introductory interest rate deals or someone who regularly surfs their credit card debt from one 0% credit card to another to prolong the period of interest-free borrowing. However, lenders are now wise to this practice and have become stricter to whom they will lend, 0% deals are drying up and those that do exist carry a transfer fee of a percentage of the balance the borrower is looking to surf. Not to be confused with stoozing, as stoozers are never really in debt and stooze to make money whereas rate tarts shuffle their debts to prolong the day when they have to pay them off.
Stoozing means racking up purchases on a 0% interest credit card until the credit limit is reached and then depositing the money you would have otherwise spent paying off the credit card in a high interest bank account. When the introductory 0% rate on the credit card is coming to an end, you withdraw the cash from the bank and pay the card off in full. This way, “stoozers” make money by paying no interest on their purchases while earning interest on the money they would otherwise have been spending. Not to be confused with a rate tart, as rate tarts shuffle debts to prolong the day when they have to eventually pay them off.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.