You don't need new cards to slash the interest you pay. Lenders love you to apply for new plastic, but do the credit card shuffle - using existing customer balance transfer deals - and you can cut 70% off the cost with NO NEW CARDS.
In this guide
What is the credit card shuffle?
The idea of the credit card shuffle is that you cut the cost of your existing cards, but without applying for any new ones. This requires being pretty savvy in managing your cash, but you can save up to 70% off the costs of your debts using this special technique.
While the most prominent balance transfer deals are at 0%, these are usually for new customers only. But if you call your existing card provider, it may offer you a low-rate deal on the card you already have. If it does, this allows you to start transferring your debt around.
If you're paying debts at 18.9% APR, and you get a low-rate deal for 6.9% APR, on a debt of £1,000 you could save around £120 interest in a year. So if you can't, or don't want to get new cards to balance transfer to, you can still save £100s off the cost of your debts.
Check out Martin's tips on the best way to do the credit card shuffle...
Who is the credit card shuffle for?
Match up your circumstances against the shuffle checklist. If any of the ticks apply to you, the shuffle could be right up your street...
Do you get rejected for new credit?
Often the best deals are only available to new customers, and those who are most in need of cheaper credit don't get accepted.
However, don't automatically assume you'll be shut out from getting the best deal - though sometimes you'll be given a Low Credit Limit. There are techniques you can try and special cards you can apply for, even if you normally struggle to get a yes - read the 'Bad Credit' Credit Cards guide.
Do you want 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. It efficiently uses existing debts and means fewer cards are needed.
For all the top deals, see the Best Balance Transfers and Best 0% Cards guides.
Can you always meet at least 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 such as Citizens Advice or StepChange Debt Charity as soon as possible.
See the Debt Problems: What To Do guide for more details.
Step 1: List all your debts
Before you start the credit card shuffle it's important to take stock of your situation and note down all your debts in a list. To help, we've prepared a simple worksheet for you to make it easier.
Note down all your debts in the worksheet. Don't forget your overdraft - if you have one - as it's quite possibly the most expensive debt you have.
If you want to factor in personal loans too, that's fine. But be careful as sometimes switching loans to a cheaper interest rate can perversely mean you pay more! Read the Cut the Cost of Existing Loans guide before doing so.
Crucially, also include any new credit you've managed to open, or are considering, so you can work out how to make the debt cheapest. This should free up space to make the shuffle work more effectively. Check the Best New Balance Transfers guide for the top new deals.
If you don't want to apply for a new card, then sometimes simply calling and asking your credit card company for an interest rate reduction works.
The credit card market is competitive and interest rate matching policies are common. If you've already got a cheaper rate on another existing card, this should help you batter it down.
Before you pick up the phone to call your credit card company you're better off doing a bit of research first. Some card companies have official set rates and others target indivduals. So it's important you know how the company will deal with you before you call it.
We've done the research for you and found possible existing customer deals from your credit card provider. Whilst these offers aren't guaranteed for everyone, and they may change over time, you can get an idea of the type of deals on offer before you make the call.
Balance transfer offers for existing customers
|Card||Representative APR||Existing customer offer|
|Barclaycard||17.9% - 18.9%||Official Response: We offer tailor-made deals for the customer. MoneySavers' experiences: Reduced interest from 29.9% to 6.9% on current balance for life of balance, or 23 months 0% on balance transfers, 1.9% fee. Let us know if you get a deal|
|Bank of Scotland||17.9%||
Official Response: We offer tailor-made deals for the customer. Call to get a deal.
MoneySavers' experiences: 0% on balance transfers for 15 months. 1% BT fee. Let us know if you get a deal
|Capital One||9.9% - 34.9%||MoneySavers' experiences: Nothing reported. Let us know if you get a deal|
|First Direct||16.9% - 19.9%||Official Response: It does not offer deals. Check MoneySavers experiences & let us know if you get a deal.|
|Halifax||9.9% - 17.9%||
Official Response: It does not offer deals. Check MoneySavers experiences & let us know if you get a deal.
|HSBC||16.9%||MoneySavers' experiences: Reduced interest to 4.9% for six months. Let us know if you get a deal|
|Lloyds||17.9% - 19.9%||Official Response: We offer tailor made deals for the customer. Call to get a deal & let us know
MoneySavers' experiences: 0% on balance transfers for 28 months 1.5% BT fee. Let us know if you get a deal
|MBNA||16.7% - 17.9%||
Official Response: Check your online account for existing customer offers.
MoneySavers' experiences: 0% on balance transfers for 13 months 2% BT fee. Let us know if you get a deal
|Nationwide||16.9%||Official Response: We offer tailor-made deals for the customer.
MoneySavers' experiences: 0% on balance transfers for 12 months, 2.9% fee. Let us know if you get a deal
|NatWest||16.9% - 18.9%||Official Response: It does not offer deals. Check MoneySavers experiences & let us know if you get a deal.|
|RBS||16.9% - 18.9%||Official Response: It does not offer deals. Check MoneySavers experiences & let us know if you get a deal.|
|Santander||17.9%||Official Response: We offer tailor-made deals for the customer. Call to get a deal & let us know.
MoneySavers' experiences: 0% on balance transfers for 12 months 3% BT fee. Let us know if you get a deal
|Tesco||16.9%||MoneySavers' experiences: 0% on balance transfers for 20 months 2.99% BT fee. Let us know if you get a deal|
|Virgin||18.9% - 20.9%||
Official Response: We offer tailor-made deals for the customer. Call to get a deal or check your online account.
MoneySavers' experiences: 0% on balance transfers for 12 months 2% BT fee. Let us know if you get a deal
Now you know what you could be offered, call it up and say...
I need cheaper debt but I'd prefer not to leave you...
What's the cheapest APR you'll give to move debts from other cards?
What is my current credit limit and can you increase it?
This works regularly, as special customer retention reps often have substantial power to authorise deals. For haggling hints and tips, read the full Haggling guide.
Now that you have successfully brought down the interest you are paying on your debt, you need to shift your debt around - from the card charging the most interest to the card charging the least.
A balance transfer allows you to shift debts between cards, usually for a fee of 3% or under. Once you've shifted the debt, the old card's clear of it, and you owe the new card.
For example, if you have debt on credit card A you can transfer this over to credit card B. In practice, credit card B pays off credit card A for you, so you now owe it the money instead. This means expensive debts sitting on a card can be cheaply moved across.
Shift the debt to where it's cheapest
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. A drop of just a couple of percentage points can make a major difference.
This simple example should help:
Example pre-shuffle situation
|Card name||Current interest rate||Current debt||Credit limit||Special balance transfer?|
|Card A||14.9%||£1,500||£3,000||6.9% on new balance transfers|
|Card B||16.9%||£0||£3,000||0% for 4 months|
At this point, the total debt is £7,000, at an average interest rate of 17.4%.
The obvious start point is to shift debt to the card that charges the least interest. Credit card A offers 6.9% for life on new balance transfers, and so the aim should be to shift the most expensive debts there, up to its credit limit.
So balance transfer £500 from credit card C onto credit card A. This still leaves £1,000 free on credit card A so transfer £1,000 from the next expensive card to it, which is credit card D.
This leaves nothing on credit card C and debt of £4,000 on credit card D. You should now look at moving this debt to the next least expensive credit card which is card B - offering 0% for four months on balance transfers and has a £3,000 limit. This leaves £1,000 on credit card D.
|Card name||Interest rate||Current debt||Credit limit|
|Card A||14.9% on existing debt, 6.9% on new debt||£3,000||£3,000|
|Card B||0% for 4 months, then 16.9%||£3,000||£3,000|
By shuffling around the debt from one card to another the average interest rate has reduced from 17.4% to 14.1% for the first four months, and after that, the rate will increase to an average of just under 16%. But crucially lower interest in the first few months will mean more of the repayments have gone towards reducing the actual debt rather than just paying off the accrued interest.
THIS REALLY DOES WORK!
In a past TV money makeover Martin cut a heavily indebted
man's interest from £2,700/yr to £600/yr, WITHOUT new cards.
Please tell us about your Shuffle Successes.
This is possibly the most crucial part of the entire shuffle. In fact, it's so important, we're going to shout...
Start repaying, focusing as much cash as possible on the most expensive debt first.
This means you should pay just the minimum repayments on all other, less expensive, cards, and throw all spare cash at the dearest 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.
What if you've debts at different rates on one card?
If you balance transfer to a card at a special cheap rate, but already hold pricier debts on it, the provider biases your repayments towards the higher rate debts first. This is good, as it means the most expensive balance disappears first (it used to be the other way around).
However, it means to get the absolute most out of the shuffle, there are a couple of extra steps to follow.
Only focus repayments until the expensive debt's repaid
Once you've done the shuffle, and you know the priority with which you should pay off each lump of debt, make sure you stop once all the expensive layer is gone.
An example will help illustrate this...
Ivor Debt has an Osbornecard with a £3,000 balance at 12.9%, and a Cablecard with £1,000 at 19.9% and a further £2,000 at 0%.
He should first focus on paying off the £1,000 at 19.9% on the Cablecard, but once that's done switch his big repayment to the Osbornecard's 12.9% debt. Then once the £3,000 is fully repaid, focus back on the 0% debt on the Cablecard .
Advanced tip - move existing debts away, then back again
If you've got enough spare balance on other cards, then you can take full advantage of any special balance transfer deal by moving all the debt off the card. Then once it has cleared, shift it back again (along with whatever other debt you intended to move to the card). This means as much debt as possible is at your new, lower rate.
There may be balance transfer fees which could wipe out the gain, so be sure to check before you try this. The only danger here is credit card companies do have the right to stop you moving the money back. This rarely happens, but you should be aware of this.
The size of the saving
The credit card shuffle needs careful management but if you follow the steps above, you could cut the total amount you have to repay by thousands.
With normal debts of £1,500 on Card A, £500 on Card C and £5,000 on Card D, the average interest rate is 17.4%. Repay £100/month on each card and by the time you've cleared the cards in full, the interest totals £1,948.
£7,000 debts repaying £100 per month on each card until repaid in full
|Interest rate||Debt||Total interest (1)||Interest rate||Debt (3)||Total interest(2)||Saving|
14.9% on existing debt
6.9% on new debt
|Card B||£3,000||16.9%||£0||£0||0% for 4 months then 16.9%||£3,000||£235||-|
|TOTAL||Avg rate = 17.4%||£1,948||Avg rate = 14.1%||£792||£1,156|
|(1) £100 monthly repayments on each card until card fully repaid. (2) Repaying most expensive debt prioritised whilst paying minimum of other cards. (3) All debt now balance transferred; to do this, it was moved off the card and returned|
Yet shuffle as much as possible onto Card A's 6.9% existing customer offer for new debt and the rest to Card B at four months 0% and 16.9% and then repay the most expensive debts first. Then the average interest rate is reduced to just under 16%, meaning the interest is only £792, around a third of the cost.