Most people are keen to save money wherever they can at the moment and the more sensible among us will also be looking to get our finances in order. If either of these is the case, there’s a good chance the subject of balance transfer credit cards will come up eventually — but what exactly do these cards do and how can they help?


A popular option for balance transfer credit card is the Discover It card, which offers 0% introductory APR for 6 months on purchases and for 18 months on balance transfers. You may be able to get a good idea for how they work from their website, but here is a bit of a quick guide for those who need it.

More Read: 4 Ways to get initial credit.

Balance Transfers: the Basics

A balance transfer, in short, is when you to move all or part of a debt or existing balance from one place to another. The reasons you might do this, of course, would usually relate to the fact that you want to take advantage of a lower rate of interest than you are currently paying. This is why many providers now offer these particular cards with competitive rates and introductory offers. However, one of the other reasons you may want to opt for a balance transfer is to consolidate your monthly outgoings so you just have one regular payment to make.

What Kind of Fees Can You Expect?

You’ll see by looking at some of the credit cards on offer that each is designed to suit a different type of user. Some will come with a rate that stays low for a certain period of time, others will provide a steadier rate and some will have certain rewards and loyalty programs attached. But no matter who you get a credit card with, you’ll want to know what type of fees to expect.

A balance transfer credit card is subject to terms and conditions like any other financial products, but the first thing you’ll want to see is what the agreed credit limit is, if there is a fee for moving any balances across and if there is any annual charge that is applicable.

Balance Transfers in Action

Let’s say you have a large balance on a store card — and that store card had an interest rate of 26% APR. A quick search around the internet will show you that there is a good chance you can get a credit card that offers a much more favorable rate and that, over the course of a year, switching could save you a significant amount. Make sure you not only have a favorable rate, but also a 0% offer on balance transfers for 12, or even 18, months.

It’s pretty easy to arrange a balance transfer and you’ll find potential new providers are very helpful at getting you over to them. You’ll need to provide details of the account you’re transferring from as well as the usual personal information — but you could find this speedy process really saves you money in the long term.