A balance transfer is the act of transferring debt from one credit card to another assuming the newer card has better terms and rates. The balance transfer offer is consist of 3 elements, offer rate, offer duration, and transaction fee. There are usually 3 types of offer by rate and duration: Purchase rate, teaser rate, and fixed life of loan rate.

1. Purchase rate offer: The transferred balance will be subject to same rate as the card's purchase (merchandise) rate.

2. Teaser rate: Very low rate for the limited time. The 0% rate is the most common rate when you open the new card. However, the duration varies from 6 to 15 months. After the promised duration, the rate is usually subject to Purchase rate

3. Fixed Life of Loan Rate : Low rate that is fixed until the transferred balance is paid in full. This type of offer is usually guaranteed as long as the account is current (paying on time). This is great way to save the interest without worrying to initiate another balance transfer after the Teaser rate offer expires. However, the offer rate is higher than the limited duration teaser rate offer.

Many of balance transfer are subject to transaction fee. It varies from 1-5% of transferred debt with maximum cap if disclosed.