Find out how to cut your interest payments without applying for new credit using a little known technique called 'credit card shuffling'.
Credit card shuffling refers to a tactic used to cut the amount you are paying in interest on your credit card balances by moving your balance – or ‘shuffling’ it – from one card to another.
A balance shuffle is different from a balance transfer in that while the latter involves applying for a new credit card and then moving your balance onto that, shuffling involves moving your balance between credit cards you already have.
This is a good way to reduce the amount of interest you’re paying on your credit card debt without having to apply for a new card, because it allows you to move debt from an expensive card to a cheaper card you already own. By reducing the amount of interest you are paying, more of your repayments go towards your actual balance rather than interest meaning your balance is cleared more quickly.
Why might I want to shuffle?
In a nutshell shuffling your credit card balances is a nifty way to cut interest payments without applying for new credit. As such it is best suited to those who have been rejected for a new credit card and don’t want to besmirch their credit record any further by applying for cards left right and centre, only to be turned down.
It also might suit those who don’t want to apply for new credit – either simply because they don’t want the hassle or because they don’t want to risk making too many credit applications in one go. Remember that lots of credit applications in a small amount of time may impact your credit rating.
Of course the credit card shuffle is also only suitable for those who own 2 or more credit cards already, so that they can use what they already have rather than applying for new cards.
How do I shuffle?
First of all, look at the cards you already have. Whether each card has an outstanding balance or not, look at the interest rate you are paying on each one. The card that offers the lowest interest rate on balance transfers is the one you’ll want to set your sights on. But, before you designate this card as your shuffle destination, first check whether there are any existing customer offers running on any of your other cards such as 0% on balance transfers for a set number of months.
While ‘introductory’ 0% offers such as these used to be reserved for new customers only to draw in fresh business, nowadays many credit card providers will offer similar deals for existing customers too in order to retain business. As such it’s quite possible that if you enquire about ‘existing customer offers’ on any one of the credit cards you already have, you may find that there is an unadvertised 0% or low-interest deal available for you to take advantage of.
When you’ve decided on either the card that offers the lowest rate on standard balance transfers (this is likely to differ from the advertised APR) or the card with the best ‘introductory’ existing customer deal, you’re ready to shuffle.
The shuffle:
Imagine you have 4 credit cards: Card A, B, C and D. Their respective standard interest rates for balance transfers are 15%, 21%, 18%, and Card D has a 6-month offer on balance transfers at 6%.
Initially, you'll want to transfer as much of your existing debt onto Card D as possible so that it benefits from the lowest rate of interest (providing you won't be charged for doing so) you have available.
To do this you'll need to contact the issuer of Card D and request a balance transfer, stating however much you want to move from your other cards onto Card D – but make sure to check that this balance will in fact benefit from the 6% rate.
Depending on the credit limit for Card D you’ll now have reduced a significant amount or hopefully all of your outstanding balance to a low interest rate, meaning you can work on paying it off more quickly.
You’ve accomplished this without any fees or new credit applications – all it takes is a bit of planning and a phone call to your provider to arrange the transfer.
If you have transferred to a limited offer such as the 6-month deal described above, remember to look into transferring any remaining balance away from that card when the deal comes to an end if the standard rate it will revert to is uncompetitive.
If you weren't able to shuffle all of your outstanding debt to Card D, then move the remainder to the next cheapest option so that you have reduced the interest as much as possible without applying for a new card.
What else should I consider?
While credit card shuffling can be a useful tactic for those with several cards already and outstanding balances to clear, if you only have one card or overdraft balance that’s accruing large amounts of interest, you’ll have to look into a straight balance transfer instead by applying for a new credit card.
As long as you only make one application for credit every 3 months or so you shouldn’t leave much of a mark on your credit record, so if you are going to balance-transfer to a brand new card, do ensure you meet the application criteria before applying. You can do this using our credit card comparison tables. This way you’ll have a good idea of whether or not your application is likely to be successful so you can apply without the risk of tarnishing your credit record.
You should also bear in mind that you're unlikely to get as good a deal on balance transfers by shuffling as you would if you applied for a new card with an introductory offer. However, it can be a useful way to reduce the interest you're paying if getting a new card just isn't an option.
