Do the credit card shuffle - and save £££

THE credit crunch has BLIGHTED our nation.

Millions are desperate to cut costs of existing debt-but get brutally rejected when applying to shift it to cheaper deals.

But here's a secret the credit industry tries to hide: YOU DON'T NEED NEW CREDIT TO GET CHEAPER RATES AND SAVE £1,000s!

To whet your appetite, during my TV makeover series, I chopped a guy's interest from more than £2,000 a year to just £600 WITHOUT new credit.

Each step of my Credit Card Shuffle technique - which you can see on video on this page - slams a boot through lenders' floors. It's perfect for:

Those rejected for credit: If you apply for a new cheap balance transfer credit card but always get turned down, it's an escape route.

Protecting anyone's credit rating: By more efficient use of existing credit, you need fewer card applications which, in turn, buffs your credit score, allowing you to get better deals.

The elements can work separately or all in tune together, so if the first doesn't work, try the next.

STEP 1-Grab hidden "existing customer" balance transfers: While web, TV and billboard ads galore promote "balance transfers" to shift credit card debts to new plastic at lower rates, you won't hear that your EXISTING cards may allow it too.

Meaning one card may pay off the debts on another, so you now owe it the money more cheaply instead. While this doesn't cut the cost of the debt racked up on the card, it allows you to move debts to where they're cheaper.

So call up EVERY card you've got in turn, even the old empty ones. First gather info, check what the APR (annual interest rate) is, how much debt you've got, and what your credit limit is.

Then ask the killer question: "I've debts on other cards that I'd like to move to you-will you give me a special cheap balance transfer rate if I do?"

Some will say yes, others no. Barclaycard often lets customers shift other debts to it at 6.9 per cent for life plus a 2.5 per cent fee, meaning you'll pay a fraction of most cards' standard costs, and it lasts until ALL the transferred debt has been paid off. If you bag a "yes", ask to get your credit limit boosted too so you can move more debts to the lower rate.

STEP 2-Do the shuffle: Now list all credit cards. Take Jon Shortovcash's scenario. He's struggling with £7,000 borrowings at an average 17.3 per cent rate costing £1,400 a year. He calls and gets the info, as in Table 1 (above).

Savvy

Now the aim is to MOVE debts where they're cheapest. He has space for £2,000 extra on his Fionacard at 6.9 per cent and £1,500 on tap at zero per cent on the Tomcard. So he should move the £3,500 from the Dickcard as it's charging him the most, leaving just £1,500 there.

After that, while the Harrycard doesn't offer a deal, its standard rate is still cheaper than the Dickcard, so he could ask if he can move debts there instead.

Jon's average interest rate's dropped from 17.3 per cent to 7.8 per cent and over a year, instead of paying £1,400 in interest, he's now paying under £1,000. A total saving of over £400, all without new credit. This is the safe route, but the financially savvy can save more. Shift the debt OFF the Fionacard on to another card first then move it BACK, and all the debt on the card is now at the lower 6.9 per cent rate. Do the same with the Tomcard and it would save another £200 a year. Yet there's a tiny chance lenders will block this.

STEP 3-Repay highest interest rate debts first: Many people mistakenly try and pay off the BIGGEST debts first. Instead, focus on trying to clear the HIGHEST interest rate debt first. Throw all your spare cash at that, making just the minimum repayments on all others.

Once the fastest-growing debt is gone, focus on the next highest and so on, until you snowball the rate down.

If you've got an overdraft, check its rate too-it's often higher than the cards. If so, pay the minimums on your cards and let your earnings gradually pay off the overdraft, saving cash and helping avoid nasty bank charges.

Get a free step-by-step shuffle planner at moneysavingexpert.com/shuffle

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