A credit card balance transfer is a type of credit card transaction in which you move the balance of one credit card to another credit card. A good reason to do a balance transfer is to take advantage of a lower interest rate. However, you shouldn’t transfer credit card balances just to avoid paying your credit card bill. That can get expensive and lead to credit card debt.\r\n\r\nUse a Good Balance Transfer Credit Card\r\n\r\nBefore you sign up for a new balance transfer credit card, make sure it’s a good deal. Check the introductory rate and the introductory period. Compare the post-promotional interest rate to the interest rate on your current credit card. Make sure you understand what you have to do to qualify for the promotional interest rate. Finally, know the balance transfer fee.\r\nHow to Choose a Balance Transfer Credit Card\r\nA Balance Transfer Should Save Money\r\n\r\nNot only does the balance transfer credit card play into whether you do a balance transfer, you also need to know you’ll actually save money by doing the balance transfer. Using a balance transfer calculator can help you figure this out easily. You get the most savings from a credit card balance transfer if you can repay the entire credit card balance during the promotional period. The balance transfer fee and annual rate are two other factors that will also impact the cost of your balance transfer. Will You Save Money With a Balance Transfer?\r\n\r\nCredit Card Balance Transfers Can Affect Your Credit Score\r\n\r\nTransferring credit card balances could have an impact on your credit score. That’s because high credit card balances indicate you could have more debt than you can handle. Before you do a credit card balance transfer, make sure it won’t negatively impact your credit score.\r\nA Balance Transfer Could Hurt Your Credit Score\r\nBe Sure the Balance Transfer is Successful\r\n\r\nOnce you’ve done the balance transfer transaction, don’t forget about your old credit card. Make sure you receive a billing statement with a $0 balance before you cancel the credit card, if you choose to. That way, if anything goes wrong with the balance transfer, you can catch the mistake sooner rather than later. If there is a mistake with the balance transfer and you ignore billing statements from your old credit card, you could miss a payment and end up with a late fee and a 30-day late mark on your credit report.\r\n\r\nPaying Off a Balance Transfer\r\n\r\nIf you transferred the balance to a credit card with a low introductory interest rate, it’s best to repay the balance within the promotional period. That way you’ll save more money on interest charges.\r\n\r\nIt could take you longer to pay off a balance transfer if your credit card has another type of balance, like a purchases balance, if the balance transfer has a higher interest rate. Credit card issuers currently apply any above-minimum payment to the balance with the lowest interest rate until that balance has been completely repaid. Until the lower rate balance has been paid off, you typically only pay interest on the balance transfer.\r\n\r\nAs of February 22, 2010, credit card issuers are required to apply above-minimum payments to balance with higher interest rates. That way, a balance transfer would be paid off sooner and overall you’ll pay less interest.