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If you have a credit card with a current balance, you have probably received an offer from another credit card company, offering a balance transfer from your current credit card to a card with a lower introductory interest rate.

Transferring your balance from a card with a high interest rate to a lower interest rate card may seem like a great option but there are definitely a few things you should consider when you decide to transfer your credit card's balance:

A) How long will this lower interest rate last?
B) What interest rate will you receive when the introductory period is over?
C) What are the balance transfer fees (if any)?

These balance transfer offers may seem great, but make sure to do the math before going ahead with the transfer. The general time periods for balance transfer offers are 6, 9, 12, or 15 months. After this time period, your intoductory balance transfer rate reverts to its normal interest rate, usually at a fairly high 16%. You may occasionally also come across balance transfer offer with rates that last until the balance is paid off, but these offers are usually for slightly higher interest rates such as 1.9% - 5.9%.

Why should you pay attention to the length of the introductory period? If you cannot pay the balance off before the rate changes to a higher rate, and if that higher rate is even higher than your current rate, then any savings you earn during the balance transfer promotion period will be neglected after the higher rate takes over. However you can always transfer the balance to a different credit card with a low introductory rate before the introductory period ends. You will also need to take the balance tranfer fees into consideration as well because they will cut into your savings.

Example: You have a balance of $5,000 at the rate of 8%. Your monthly finance charge is about $33 or $400 per year. If you transfer the balance to a 0% interest rate card which has a duration of 12 months, you save about $400 for that year. After the promotional rate ends, your interest rate changes to a high 16% rate.

Let's assume that over past year you have paid down the balance to $4,000. With the new higher interest rate, your monthly finance charge would be around $54, or about $640 per year! That is almost 40% higher than the previous year. In just a short while, your interest charges will easily offset the savings you have accumulated through the balance transfer; so it is important to factor in the time limit of the offer, and the rate of that offer after its promotional period ends.

How much in fees will the balance transfer cost you?

Balance transfer fees are a very important thing to watch for during credit card balance transfers. Depending on the fee amount, you can easily offset the interest you will save with the lower rate. Most offers these days will charge a percentage of a balance transfer, with a minimum and maximum amount set to the fee.

Example: A balance transfer offer has a fee of 3% of what you transfered, with a minimum fee limit of $5 and a maximum fee limit of $75. If you balance transfer $1000, you will be charged $30. If you transfer $3000, you will be charged $75 (since 3% of $3000 is $90, which is over the maximum fee limit).

Balance transfer fees are often buried within the fine print, so find out how much in fees you are being assessed before you make your transfer. There are many occasions where you may receive offers with no balance transfer fees, but they will be clearly stated: No balance transfer fees are associated with this offer.

Important Note! More and more balance transfer offers these days are removing their maximum fee limit. This means that a $3000 balance transfer like the example above would cost you $90, instead of the knocked-down $75. A $6000 balance transfer can easily cost you $180 in fees! Pay attention to that percentage imposed on the fee. You do not know what you might be hit with.

Utilize balance transfer correctly. You can save hundreds of dollars when you transfer from a high interest rate credit card to a lower rate card. Choose cards with long balance transfer period and low balance transfer fees.

Transfer onto a zero percent APR card and save.

Here are five credit cards with 0% up to 15 months.

Blue from American Express®
- Fee-Free Rewards Program.
- 0% APR for up to 15 months.
- No Annual Fee.
-Low Balance Transfer APR - 4.99% Fixed APR for the life of the balance.

Citi® Platinum Select® Card
- 0% APR on Purchases and Balance Transfers for Twelve Months.
- $0 Liability on Unauthorized Purchases.
- 11.24% APR after Introductory Period.
- No Annual Fee.

Chase Platinum Visa® Card
- 0% Intro APR for up to 12 months on purchases and balance transfers.
- No Annual Fee.
- Flexible Rewards Program: Earn one point per dollar spent2. Redeem for your choice of Cash Back, Merchandise, Travel or Gift Cards.
- FREE travel services including Auto Rental Insurance and Worldwide Travel Accident Insurance.

Discover® More Card
- 0% Intro APR for Purchases and Balance Transfers for 12 months.
- 5% Cashback Bonus®.
- Unlimited cash rewards that never expire.
- $0 Fraud Liability Guarantee.
- No Annual Fee.

Advanta Platinum Business Custom Card
- 0% APR for 15 Months.
- 7.99% Fixed APR thereafter.
- 5% Cash Back or Travel Rewards.
- No Annual Fee.

What are the low rates really for?

When you see a balance transfer offer, or an introductory promotional rate, you should read the fine print to see what type of transaction the lower rates are for. In credit card transactions, there are generally three type of transactions: cash advance, balance transfer, and purchases. Each of these transactions have a different rate, with cash advance usually ludicrously high on the ladder.

All this means if your offer was for a low rate on purchases and you transfer a balance, you may not actually be saving any money! Check the terms carefully, as some of the better offers will include low rate for balance transfer and purchases.

If the rates are only for balance transfer, do not make additional purchases on that card. Credit card companies will apply your payments to the lowest rate transaction first! This means that when you make a new purchase on the card, it will stay there, being charged the higher rate, until the other balances are paid off.

Example: You balance transfer $3000 to a card that has a 0% rate for balance transfers and 16% for purchases. You bought a Nintendo Wii for $250. So when the monthly bill comes, you put an additional $250 onto the payment. Nintendo Wii paid off, right?

Not at all.

As mentioned, payments are made toward the lowest rate balance first, so that additional $250 has just been applied to the original $3,000 balance transfer. Your $250 Nintendo Wii purchase? It will continue to sit untouched, accumulating interest at 16% until you have finish paying off the $3000 0% balance transfer. Ouch!

Always, always pay on time!

Yes, you are supposed to pay your bill on time regardless of the situation, but if you currently have a balance transfer on one of your cards, be especially mindful to make your payments on time. Every credit card company will switch your promotional rate to the standard if you miss a payment. If you miss too many times, the standard rate will even become the higher default rate, as high as 30%. In a $10,000 balance, that is about an additional $3000 per year in interest charges.

While you are paying on time, do not forget to keep making payments to the old card you are transferring from until the balance transfer has posted. These days, depending on the way you request the balance transfer, it may take as little as a few days or as long as a few weeks for the transfer to complete. You?ll need to make sure payments to the old account are made on time during this transfer period, as you are still responsible for the balances of the old account until it has been transferred completely. If you make extra payments, the credit card company will be able to issue you a credit refund.

Credit Card Balance Transfer Check List
- Confirm the card's interest rate (should be 0%), interest rate after intro period, and the time period of its intro rate (6-15 months).
- Write down those three numbers.
- Confirm the transfer fees and write down the fees required to transfer balance.
- Continue paying your original credit card while the balance transfer is pending.
- Pay your credit card account with the newly transferred balance on time, all the time!