If you carry a lot of credit card debt, then you can save a substantial amount of money by using a balance transfer strategy.  Using balance transfers, you can successfully take advantage of low introductory rates offered by credit card companies.  These “teaser rates” are usually between 0%-9% and last between three and twelve months after you activate the card.  If you are transferring a balance from a card with high interest to a lower interest teaser card you can save a substantial amount of money on interest payments – over the course of 24 months, this can add up to several thousand dollars.

Of course, you should always read the fine print on credit card offers.  You should be aware of all the costs associated with your card, including those for balance transfers.  The good news is, balance transfer fees have come down substantially, and if you are transferring a reasonably sized balance, the fee is capped usually around $75.  In some cases, fees are waived entirely.

TIP:  use the benefits offered to you by the credit card grace period, and transfer the balance of your high interest card to the teaser card before the due date on your bill, as card companies usually offer a grace period of three weeks to a month.  Transferring before this date saves you from having to pay interest on it, however, some card companies do not have a grace period – therefore, in this case you’ll pay interest immediately.

After transferring your balance to the teaser card, you’ll get a bill with a new due date – be sure not to miss payments, as you may void the terms of the teaser card.

As a short term credit card management strategy, balance transfers can work extremely well.  However, always be sure to consider your larger financial situation.