The concept of a balance transfer credit card is simple enough. As the name suggests, a balance transfer credit card allows you to move outstanding credit card balances (or even retail shop balances) to a new card in order to help consolidate your debt management.

By combining your outstanding balances onto one single credit card, you can often manage your payments better and save money on interest at the same time. If you're interested in signing up for a balance transfer credit card, it's important to know that the service can vary significantly between various credit card companies. Thus, before making your final decision, it's best to review all your options.

Firstly, it's important to recognise that the fees and interest rates for balance transfer credit cards differ depending on the credit card provider and the specific terms of the service. Ideally, you should look for a card that offers a low interest rate over a long time period. Certain providers may also offer you interest-free balance transfers for a limited period, so it can be useful to shop around for the most attractive option. Depending on the credit card provider, you may be charged a once-off handling fee upon transferring your balances to the new card. This is often a percentage of the amount you transfer, and it varies from company to company.

Your credit score can influence the number of balance transfer options available to you. On the other hand, you can also improve your score by making regular payments on a balance transfer credit card, potentially opening up more attractive credit options for you in the future.

You can also benefit from paying above the minimum monthly payments whenever you can, as this will allow you to clear your balances as soon as possible. With balance transfer credit cards, your monthly payments will usually go toward paying off your transferred balances first, followed by your standard purchases and your cash withdrawals.

Something else to consider when signing up for a balance transfer card is the amount of time you have to complete the transfer after opening your account. In order to benefit from the low interest rate you signed up for, it's often required that you consolidate your outstanding debts into the new card during a specific time period.

Also understand that most balance transfer credit card providers require you to transfer a minimum amount in order to sign-up for the service. So, make sure to ask whether you qualify for a balance transfer based on the amount you intend to transfer.

The author of this article is a part of a digital marketing agency that works with brands like Barclaycard. The content contained in this article is for information purposes only and should not be used to make any financial decisions.