What is a Balance transfer credit card? Balance transfer credit cards are just like normal credit cards but with an attractive added balance transfer option. This option allows the cardholder to transfer the existing debt on one credit card over to the balance transfer credit card and be charged a low or even 0% rate of interest for a set term. Balance transfer credit cards are best for those who need a little more time or help with outstanding debt that cannot be repaid within a couple of months. Effectively this option allows credit card users to transfer the debt from a higher interest credit card to a credit card with little or no interest for a specified period. Used correctly and these cards can save you a lot of money on credit card interest so take your time to do a credit card comparison of rates, fees and features. Balance transfer Caveats. Before applying for a balance transfer credit card it is essential to remember that it may not be suited to everyone or even every credit card debt balance. These credit cards can be attached to high annual fees and high purchase rates. For this reason it is best to use these cards only if you have considerable or even large outstanding balances that you expect to take some time to repay. Balance transfers may even be infeasible if you have a debt outstanding that is capable of being repaid within a few months because the annual fee and other fees associated with the transfer may offset any interest savings you make with the card. Special low balance transfer rates only apply to amounts transferred and not any purchases or cash advances subsequently made on the card. Purchases or cash advances made on balance transfer credit cards will be charged immediately at the respective purchase or cash advancement interest rates. Often these high rates make it very costly to make purchases or cash advances on the card. Of course a super card with a balance transfer offer that bundles a low balance transfer rate with attractive purchase and cash advancement rates may exist, if not now then eventually. Cardholders who use balance transfer cards to make purchases need to be vigilant about the way their repayments are applied. When repayments are made, they are usually used to first offset balance transfer amounts and then only after that has been paid in full will the other credit card charges be paid. If not known or understood this could spell financial catastrophe for cardholders who are paying down balance transfers that are charged a negligible rate, whilst their purchases debt continue to sky rocket with the high purchase interest rates. Read more about balance transfer credit cards and discover ways to save money and reduce credit card debt.