Balance transfers allow card holders to transfer the money they owe on their existing credit card to another, usually at a lower rate of interest.

The new credit card company pays off the old credit card debt and transfers it to the new card.

Balance transfers have become hugely popular in recent years with companies now offering 0% interest for anything up to 18 months

However, after this promotional period the credit card interest rate will return the the lenders standard offered rate.

If you do not pay your card balance off in full each month, a balance transfer will probably save you money.

However, you must remember that the offer is temporary and you should aim to reduce your balance over the promotional period and not increase it.

Make sure that you read all the small print and check out any balance transfer fees to ensure that you will not lose out in the long run.

Ensure that you understand what is included in the deal and how it applied to your balance and be sure to note the following points.

- it may not cover new purchases and is unlikely to include cash advances
- a late payment or going over your credit limit may end the promotional period
- you may have to spend a minimum per month to continue the promotional period
- a transfer fee is often charged for a balance transfer, usually 2% or 3%