What is a balance transfer and/or balance transfer rate?
In the most basic terms, a balance transfer is a way of moving a debt from one credit card to another credit card. This is often done to save money, as the new credit card may have a lower finance rate (APR) than the old credit card.
Occasionally, credit cards have promotional balance transfer rates that typically last from 3-12 months. A "balance transfer rate" is the rate (APR) that is attached to balances transferred to that card from another card. This "balance transfer rate" may differ from the rate (APR) that is attached to new purchases made with the card.
Every credit card is a bit different and promotional offers often change, so be sure to thoroughly look over the terms and conditions for each specific card before applying.
What is a balance transfer fee?
A fee charged by a credit card company to transfer a balance from another account to that particular credit card. It is generally 1% to 5% of the transferred balance (sometimes up to a certain dollar value). For example, a balance transfer fee could be 3% of the transferred balance up to a maximum of $50. Not all credit cards charge this fee.