Guide to Saving Money with Balance Transfer Credit Cards

Keep your eye on balance transfer fees...

While a few credit cards offer no fee balance transfers, most credit card companies charge a 3% balance transfer fee. However, it is important to note the maximum fee associated with an offer. Some credit cards have a maximum fee of $75 per transaction; others have no maximum fees.

I recommend: If possible, look for a credit card that offers no fee balance transfers. If there are no such offers available, be sure to stick with an offer that has a $75 maximum fee on balance transfers. On a $5,000 balance transfer, a credit card with no fee limits will charge $150 to transfer a balance. That number can be cut in half by choosing a credit card with balance transfer fee limits.

Make sure the credit card you apply for does not offer tiered introductory periods...

When you review credit card offers, you will find that many advertise a 0% APR for up to 1 year. In the fine print, these credit cards will note that some applicants may be approved but only offered a 0% rate for three to six months.

I recommend: Before you submit your application to transfer a balance, be sure the card you are applying for will provide a 0% APR for a full year.

Know what your introductory rate covers...

If the credit card you apply for only offers a 0% APR on balance transfers, any purchases you make will be charged the standard interest rate. Furthermore, any payments you make will be credited toward your balance with the lowest interest rate. Thus, if you make new purchases, you will start paying interest on that balance immediately.

I recommend: I recommend: Apply for a credit card that offers a 0% APR on purchases and balance transfers for 1 full year if you intend to make new purchases with your credit card.

Compare offers before applying...

With hundreds of credit card offers available on the internet, it is important to search out the best deals available. A few minutes of research can easily translate into savings.

I recommend: Instead of visiting Amex, Discover, Visa and MasterCard, try searching a credit card comparison site such as Smart Balance Transfers, which focuses on this particular segment of the credit card market.