A balance transfer is the act of transferring debt from one credit card to another assuming the newer card has better terms and rates. The balance transfer offer consists of 3 elements: offer rate, offer duration, and transaction fee. There are usually 3 types of offers by rate and duration: purchase rate, teaser rate, and fixed life of loan rate.

• Purchase rate Offer: The transferred balance will be subject to same rate as the card's purchase (merchandise) rate.

• Teaser rate Offer: Very low rate for the limited time. The 0% rate is the most common rate when you open the new card. However, the duration varies from 6 to 15 months. After the promised duration, the rate is usually subject to Purchase rate

• Fixed Life of Loan Rate Offer : Low rate that is fixed until the transferred balance is paid in full. This type of offer is usually guaranteed as long as the account is current (paying on time). This is a great way to save the interest without worrying to initiate another balance transfer after the Teaser rate offer expires. However, the offer rate is higher than the limited duration teaser rate offer.

Beware that any payments you send to your credit card will be applied to the lowest-rate balance on your account. This means that any balance under a teaser rate or fixed-life-of-loan rate will likely be paid off sooner than any purchases or cash advance balances (which presumably has a higher APR). You can avoid this by never making any purchases or cash advances using the card.

Many of balance transfer are subject to transaction fee. It varies from 1-5% of transferred debt with maximum cap if disclosed and some balance transfers do not have a maximum fee amount.

• More Generally: A balance transfer describes any shifting or moving of either an asset or debt from one account to another.
• Automated services exist to help facilitate balance transfers. Among these are the credit card balance transfers service in UK, balance transfer calculator and balance transfer comparison service in US and balance transfers in Australia. Other similar services do exist, but they may not be free to use.
• One thing to look for (and keep in mind) in a "Life of the Balance" transfer is what will happen if you are late in making a payment or if you go over your credit line. The transfer terms will likely indicate that, without notice, your low "LOB" rate will automatically adjust to that of a convenience check or some other higher rate if your account goes into a non-current status, or late payment condition.