I first learned the credit card shuffle when I was in college. In college there is no shortage of credit card companies offering all sorts of easy credit or free credit programs. The sad thing about all those offers is that regardless of how attractive they may seem, if you look at the fine print, these are actually financial traps. In many cases, a lot of them hook you with a 0% fixed period. After that period, the interest rate explodes.
Sadly, if you’re the typical college student that’s busy with school or with your social life, it’s too easy to overlook these small details. It’s very easy to just sign on the dotted line without reading the fine print. This is why there is a huge number of financial institutions and lenders that target the college market. This is also true for people who just graduated from college or who just got married and are buying their first home. These market segments are quite lucrative for lending institutions.
Not surprisingly, they’ve come up with 0% interest rate cards with zero fees. But as mentioned earlier, these can operate like a trap because if hang on to these for a long time and you have a huge balance, your interest will explode once the promotional period expires. That’s how these credit card companies make money.
The good news is that by playing the credit card shuffle you can use these gimmicks offered by lenders to your advantage. It’s all about how you play the game. I consider it pretty much like dancing, but the big difference between a good dancer and a lousy one is that good dancers have an impeccable sense of timing. If you want to play the credit card shuffle right, you need to time your moves between zero-interest card with no fees to another zero-interest card with no fees.
Many college students have been playing this for over two decades now. This is proven. If you are in a tight financial spot, regardless of whether you’re still in school, just got out of school, or have been out of school for a long time, you can make the credit card shuffle work for you.
The first step is to apply for as many different zero-interest rate credit cards with no fees. It’s really important to note that you must only target credit cards that charge no annual fees. This is very important because if you have 10 cards and they charge an annual fee, those annual fees can burn a hole through your pocket. Sure, they may not be charging you interest, but those fees can sure pack a punch. Be careful of annual fees.
Now that you have signed up for all these cards, the next step is to use one card to pay for your expenses. Basically, whatever it is that you need to spend money on, go ahead and use that card. Of course, just like with any other credit card, you need to whip out the plastic sparingly. Only use your credit card as a last resort.
Now that you have piled up your debt on your credit card or use its balance transfer mechanism from a previous card to take on the debt that you accumulated from a previous card with a higher interest, comes the next step of the credit card shuffle.
The next step is pretty straightforward. Most credit cards have a balance transfer program. You can take the balance from another card and forward it to a card with zero balance and zero interest rate. The whole point of the credit card shuffle is to keep pushing your balance from one zero-interest and zero-fee card to the next, until you have paid down your debt. That’s how the shuffle works. You have to shuffle it in the right sequence and you have to push your credit balance at the right time.
If you do this right and you are very meticulous regarding your payments, you can actually use the credit card shuffle as an interest free financial tool to wipe out all sorts of debt that racked up in college or in your professional life.
The big problem with the credit card shuffle is that you need to be a good record keeper. You need to know how the sequence works. You need to sign for the right credit cards. You also need to do some constant research to figure out which card programs are the best as far as the credit card shuffle is concerned. This takes quite a bit of time and effort.
As you can probably already tell, most people don’t bother with a finely-tuned credit card shuffle game. Instead, they play it in a very sloppy way. They basically just wait for their balances go up and then they do a balance transfer. Nine times out of ten, they don’t pay attention to when the promotional period will expire. This is where people get into trouble because they would try to do the credit card shuffle and then all of a sudden, they are forced to find another card to offload their huge balance because their previous card’s zero-interest rate period expired. Do you see how pathetic this is? Do you see how big of a problem this could be?
The main reason why you’re playing the credit card shuffle in the first place is because you don’t want to pay any of the interest at all. Unfortunately, if you play it a sloppy way you will get burned a few times, so you end up paying a few hundred or a few thousand dollars as you try to shuffle your money to yet another virgin card.
To play the game the right way, you need to begin with the big picture view. The big picture view is that credit card companies know what they are doing. Don’t have any second thoughts regarding doing the credit card shuffle because the mere fact that credit card companies are offering zero-interest rate promotional periods with their cards mean that somebody somehow or someway at some time is making money, so don’t worry about those multi-billion financial corporations and institutions. They’re not going anywhere anytime soon.
Focus instead on your issues. Your end goal must always be freedom from credit card debt. Don’t look at the credit card shuffle basically as a desperate move to get some short-term breathing space. That is a losing strategy. You have to begin with a big picture view. You have to map out how you’re going to push that money, how much of your income you’re going to devote to repay that debt load, and what your final exit strategy is. That’s how you win.
You play the game and fast-forward the DVD in your mind before you even make the first move. That’s how you separate people who truly benefit from the credit card shuffle from those who get burned.
It’s really important to pick the right cards. The best cards, of course, are those that not only offer 0% interest and have no annual fees, but they also give you points. This means that the more debt that card assumes, the more points you get which you can then redeem in terms of trips or gift certificates. Whatever the case may be, try to go with a card program that offers you as many benefits and freebies as possible.
Once you’ve identified the right cards, the key here is to sequence them. What I mean by that is that you are going to time when you’re going to be moving balances from one card to the next. It’s really important to sequence your cards properly. What should you be paying attention to? It’s actually very simple, pay attention to when the zero-interest rate promotional period will expire. Different cards have different expiration dates.
By paying attention to these deadlines, you can then bounce your debt from one card to the next without skipping a beat. It’s always important to remember that your goal is to have a soft landing. You don’t want a hard landing. If you get penalized because you played the credit card shuffle in a sloppy way, that’s a hard landing.
Another key strategy that you need to pay serious attention to is boosting your income. While the credit card shuffle does provide a lot of convenience and quite a bit of relief, it is not a long-term strategy. Nobody in their right mind would want to continue playing the credit card shuffle well into their 60s. At some point in time, you are going to get tired. At some point in time, you want to just get off the credit card shuffle and handle your finances like any mature and responsible adult would. Do you see where I’m coming from?
It’s really important then to not only work to discharge your debt but also take all efforts to boost your income. Maybe you’ll need to take out a second job, maybe you’ll need to freelance online, and maybe you’ll need to build websites that provide passive income. Whatever the case may be, work to boost your income. You can do this through active work or through investments. With the more income you get, the more resources you would have to pay off the large debt load that you are deftly handling through the credit card shuffle.