Credit card shuffle? 29 August 2018 at 2:46PM in Credit Cards 8 replies 2K views

zipcat1980

Hi all-

All advice welcome-

I have 4 credit cards close-ish to max limit. I pay minimum payment every month but can't afford to do much more. I now have a sum of money which I can use to pay off a significant chunk of one of the cards. I understand the principles of interest rates and will target this payment to the amount with the highest rate. I am then going to increase my monthly payments on the outstanding debt to help to start paying of the overall balance.

I wonder if in addition to this there is any merit to employing the 'credit card shuffle', i.e. asking the card company I will have available credit with, whether they have a balance transfer deal to transfer some debt from another card, and then repeat this, to 'shuffle' the debt across the cards so that at least some of it will be on a lower interest rate.

Sounds a bit complicated, but in theory looks like it could reduce my interest payments by quite a bit.

Has anyone tried this approach?

zx81

What are your cards, rates, balances and limits?

zipcat1980

Not keen to post all the details, but they are all between 18-25% interest rate. Companies involved- MBNA, Capital One, Tesco.

I have £5k which I can use to reduce the balance of the highest rate one. Which I guess in theory gives me a £5k buffer which I could transfer a balance into, and then try again to transfer again into the buffer on the card I have transferred from, etc. Obviously dependant on the companies involved offering a promotional balance transfer rate.

If that sort of strategy tends to work as a short term measure to reduce total interest payments?

Willing2Learn

Is the 5K transfer available at 0%? If not, have a look at the link below for cards with a 0% interest free promotions:
https://www.moneysavingexpert.com/credit-cards/balance-transfer-credit-cards/#nofees

Edit: And yes, This sort of strategy works to reduce interest paid. It won't address problems connected with poor budgeting and associated debt.

zipcat1980

Yes understood re budgeting!

Getting another card is unlikely given current circumstances so will have to wait and see what the existing provider will offer as a promotional rate once I have available credit.

Potbellypig

zipcat1980 wrote: »

Not keen to post all the details

Why? Seems like someone is offering you help.

onlyfoolsandparking

I shuffle my cards around all the time and am 0% interest roughly 98% of the time and it makes a BIG difference. If your only in a position to pay minimum payments it's an absolute must you are on 0% deals. I have 7 cards with various limits, first rule is to keep at least 2 of them free, 3 is better then when the deals come in you can take advantage of them.


Of course I know not everybody can do this but it's the ONLY way you can take advantage of credit cards otherwise the debt becomes very expensive.


Some cards are better than others, I have all mine on a spreadsheet with payment dates, amounts, when 0% deals run out and much more, it's all about discipline, if I knew more detail of what cards you have with what balances and interest rates I could give my opinion on what to do with your 5K.


Paying a card off in full can sometimes trigger a 0% deal which then gives you the opportunity to transfer a full card, trigger another deal and so the cycle begins, as I said discipline and timing is imperative to pay down debt/s

foxy-stoat

Try clearing the Tesco card and see if they offer a balance transfer intro rate - use that to clear the highest interest card - That way you can turn approx £8500 debt into 0% interest.

Or just target the highest rate first or the lowest balance first. If your worried about spending on the card you clear again then either reduce the limit to say £500 once you pay the £5K or cancel the card when the balance is zero.

zipcat1980

Hi- thanks for all the advice guys.

I chose to target the highest interest rate so have paid the £5k off a MBNA card.

Hoping they will offer me a balance transfer deal so that I can start the shuffle!

If they don't I guess I can call them and ask for a balance transfer deal but not sure what my chances will be.