There's a conspiracy in the credit card world. The fact you don't need new cards to cut your interest is covered up; new card applications are profitable – not just for lenders, but internet price comparison service which earn fees when you get cards through them. My strategy to cut your cost by up to 70% without new cards is ‘the Credit Card Shuffle'.
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This is a four-step system that moves your debts between existing, not new, borrowing to the most efficient place. It takes some planning, but pays off massively. In a recent TV money makeover I cut a heavily indebted man's interest from £2,700/year to £600/year without new cards.
- Those rejected for new credit. New customer offers are the cheapest option, but often those most in need of cheaper debt don't get accepted. Though don't automatically assume you will fail on application, there's a special section of the balance transfer article on the best poor credit scorers deals.
- Anyone else, to protect your credit score. Applying for lots of cards, especially in a short space of time, hits your credit score. The Shuffle can and should be used in conjunction with new cheap debt card applications (see Best Balance Transfers and Best Card For Purchases articles), as it efficiently uses existing debts and means less cards are needed (see full article on Credit Scoring
- Those who can meet their minimum repayments. If you consistently can't meet even your minimum outgoings, the Shuffle won't help you. Instead see one of the free debt help agencies like Citizens Advice or Consumer Credit Counselling Service as soon as possible. See the ‘Debt Problems: What to do article for more details
The Credit Card Shuffle itself
Each step works both independently and in combination. If one doesn't work, don't be disheartened, try them all.
- More than one credit/store card? Try all steps
- Only one credit card and an overdraft? Try steps 1, 3 & 4
- Only a credit card? Try steps 1 & 4
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Shuffle Step 1: The easy bit - ask them to cut the rate |
Sometimes simply calling and asking for an interest rate reduction works. The credit card market is competitive and interest rate matching policies are common. If you've got a cheaper rate on another card, it should help.
Saying “I need cheaper debt, but I'd prefer not to leave you” works, as customer retention reps often have substantial power to authorise deals.
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Shuffle Step 2: Moving debts between existing cards makes it cheaper |
Transferring a balance means you move debts to a credit card from another card. For example to balance transfer to the Browncard from the Blaircard, in practice the Browncard pays off the Blaircard for you, so you now owe it the money instead.
Cheap balance transfer offers used to be preserved for introductory offers for new cardholders, but there's now a fight to retain customers so an increasing number now have existing cardholder offers too.
This means expensive debts sitting on a card can be cheaply moved across. For example Barclaycard offers existing customers 6.9% balance transfers lasting until the entire debt transferred has been paid off (see the Barclaycard loophole).
Warning! Check your card company's offer before calling.
Some card companies have official set rates, others target individuals, before you make the call it is important to be prepared.
To help I've collated a list of the current offers available, while these will change over time, it gives you an idea of the scale of deal you should expect.
What you need to do:
Simply place a call to your card provider and find out the following
- Can I move debts from other cards to you? If so, what's the APR (interest rate)?
- What is my current outstanding debt?
- What is my current credit limit? If the balance transfer rate is good, ask to increase it.
Even if there's no special offer rate, this doesn't mean you can't save with step 3.
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Shuffle Step 3: The Shuffle Itself! |
At this point, it’s important to take stock of the situation and note down all your debts in a list. To help I’ve prepared a simple worksheet for you to make it easier.
At this point note down all your debts in the worksheet grid. Ensure your overdraft is included as a debt too as it's quite possibly more expensive than your credit cards. If you want to include personal loans too, then that’s fine, but be careful as sometimes switching loans to a cheaper interest rate can perversely mean you pay more so read the Cut the Cost of Existing Loans article before doing so.
This is also the point you should include any new credit you may get or are considering so you can work out where all the debt will be cheaper; this should free up space to make the shuffle work more effectively. Find the details of the cheapest new card for you in the Best New Balance Transfers article.
The aim here is to take advantage of the new and existing customer balance transfer offers. This takes a little bit of planning, but the second section of the Credit Card Shuffle Worksheet should help you decide what to do before putting it into action.
Even if special rates aren't available, shift the money to cards with the cheapest standard rate. Just a couple of percent interest drop can make a major difference. This simple example below should help:
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| Card Name |
Current Interest Rate |
Current Debt |
Credit Limit |
Special Balance Transfer? |
| Thatchercard |
14.9% |
£1,500 |
£3,000 |
None |
| Blaircard |
16.9% |
£0 |
£3,000 |
0% for 6 months |
| Cameroncard |
19.9% |
£500 |
£2,000 |
None |
| Browncard |
17.9% |
£5,000 |
£5,000 |
None |
At this point the total debt is £7,000 at an average interest rate of 17.4%. The obvious start point is the 0% for 6 months on the Blaircard, and the aim should be to shift the most expensive debts there up to its credit limit. Thus balance transfer the £500 from the Cameroncard onto the Blaircard.
There’s then £2,500 left of the Blaircard credit limit, so move the debt from the next most expensive interest rate, the Browncard. This leaves £2,500 on the Browncard and while the Thatchercard doesn’t have a special offer, its standard rate is cheaper than the Browncard, and with £1,500 left on its credit limit you can shift some more there.
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| Card Name |
Interest Rate |
Current Debt |
Credit Limit |
| Thatchercard |
14.9% |
£3,000 |
£3,000 |
| Blaircard |
0% for 6 months then 16.9% |
£3,000 |
£3,000 |
| Cameroncard |
19.9% |
£0 |
£2,000 |
| Browncard |
17.9% |
£1,000 |
£5,000 |
The average interest rate has nearly halved from 17.4% to just 9% for the first six months, saving £300 in interest over that period. After that, while the rate will increase to an average of just under 16%, the lower interest in the first six months will mean more of the repayments have gone towards reducing the actual debt rather than paying the interest.
Plus there’s nothing stopping you shuffling again at that point to keep things cheap, and it’s perfectly possible another company may then be willing to offer you cheap debt.
An advanced trick to up the gain
Balance transfer debts to a card which already has more expensive debts on it and the credit card biases your repayments towards repaying the cheaper debts first, leaving your more expensive debts sitting on the card until all the cheaper debts are paid off. Even with this, you should still save substantially, but there's a trick round it.
- Shift the existing debts elsewhere. Before balance transferring, clear as much debt as possible, simply by moving it to another card, even at a higher rate.
- Then balance transfer it back. Return the debt back to the card, along with the debt you planned to move. If you managed to completely clear the card, wait for your statement to show it clears before moving the debt back.
An example: Normal Egg* debts are 16.9%, but annually it allows existing cardholders to move debts from other cards at 0% for five months at the cost of a 2.5% fee. If your existing debts were moved first to another card, then after the statement shows it to be clear, transferred back to Egg, it would now be 0% for five months rather than 16.9%.
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Shuffle Step 4: Focus on repaying the most expensive debts first |
Now start repaying, but pay off the most expensive card first, meaning pay just the minimum repayments on all others and throw all spare cash at it to pay it off. Once it's repaid, shift focus to the next highest rate card and continue this until you're debt free. This focusing quickly reduces the interest you pay even if none of the other steps work.
Do include your overdrafts though. With an 18% overdraft and 13% credit card, you're
better off spending on the card, paying just its minimum monthly repayments, and using all your income to reduce the overdraft, as it's more expensive.
With normal debts of £3,000 on Barclaycard, £2,000 on GE Money Transformation card and £1,000 on a store card the average interest rate is 18.5%. Repay £300/month and by the time you've cleared the cards in full the interest totals £1,140.
Yet shuffle as much as possible onto Barclaycard's 6.9% existing customer offer and the rest to Halifax at 12.9% and then repay the most expensive debts first, and the average interest rate is reduced to 7.9%, meaning the interest is only £390, around a third of the cost.
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£6,000 debts repaying £300 per month until repaid in full | |||||||||
| Card |
Credit Limit |
Pre-Shuffle |
Post Shuffle | ||||||
| Interest Rate |
Debt |
Total Interest (1) |
Interest Rate |
Debt |
Total Interest (2) |
Saving | |||
| Barclaycard |
£5,000 |
18.9% |
£3,000 |
£570 |
6.9% |
£5000 (3) |
£360 |
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| £5,000 |
12.9% |
£2,000 |
£250 |
12.9% |
£1000 |
£30 | |||
| Store Card |
£2,000 |
29% |
£1,000 |
£320 |
29.9% |
£0 |
£0 | ||
| TOTAL |
Ave rate = 18.5% |
£1,140 |
Ave rate = 7.9% |
£390 |
£750 | ||||
| (1) Debt repaid in proportion to initial balance (2) Repaying most expensive debt prioritised (3) All debt now balance transferred; to do this it was moved off the card and returned | |||||||||
To ensure you stay up to date on this, all changes will be in
Best Card For Balance Transfers
Find The Cheapest Gas & Elec Supplier
Home Insurance Cost Cutting System
Best Card For Purchases
Ask A Question/Discuss
Credit Card Shuffle Chat Forum Link
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