hey there i'm nathan hamilton director for the ascent by the motley fool in this video today we'll explain how a balance transfer works and what to look for in a balanced transfer credit card knowing what to look for is essential because when used wisely a balanced transfer credit card can help you pay off debt and save money on interest but if you're not careful they can be a tool that gets you further into debt so first off let's explore what a balance transfer is and how you can use it to help pay off debt faster a balance transfer is when you move debt from one credit card over to another credit card after that your original account is paid off and you make payments on just the new card this is usually done to secure better terms such as a lower interest rate or a zero percent intro apr and consider that most balanced transfer credit cards charge a fee for moving a balance over now this fee is a percentage of the total amount transferred and usually ranges from three percent to five percent even with the fee though it's often worth doing a balance transfer that's because balance transfer credit cards come with a zero percent intro apr on transfers this introductory period can last anywhere from a few months to 18 months or more and with a zero percent intro apr you don't have to pay any interest until the intro period ends after that of course you'll start paying the card's regular apr on the balances remaining and that interest rate can actually be quite high if you can't pay off your balance before the intro period ends you can save a lot of money if not you might end up with even higher interest charges an example may be best to demonstrate how much money you may be able to save by transferring a five thousand dollar balance to a balanced transfer credit card so let's say you start with a new balance transfer card that has a zero percent intro apr for 18 months long a three percent balance transfer fee means you'd be charged 150 for bringing your transfer over if you paid off in 18 months you'd pay just 286 dollars a month for your bill and wouldn't be charged any interest during that time but if your old card came with a 17 apr you'd spend 812 on interest over that same 18 month period now it's evident why paying a balanced transfer fee can be a great idea but how do you pick the right balance transfer credit card for you fortunately the decision mostly comes down to considering just three items one the length of the zero percent intro apr for two the balance transfer fee and three the suggested credit score range firstly the longer your intro apr period the smaller your monthly payments become this will also make it easier to pay off your balance before the card's interest rate jumps back up to the ongoing rate next knowing the balance transfer fee can help you decide if you'll save money using balance transfer strategy or not and lastly getting approved for your credit card is closely tied to your credit score our credit card reviews on site include suggested credit score ranges that will give you the best shot of approval and while rewards shouldn't be your main priority when paying off debt some balanced transfer credit cards do offer cash back rewards and finding a card with rewards will give it some staying power in your wallet because once you've paid off your balance you'll still be able to earn cash back on your everyday purchases now that you have the essentials to confidently take action you can use our handy card comparison tool to find the right offer for your needs just visit full.com compare dash cards to get started and you can compare credit cards side by side you