Ok. If you are not categorized as one of four types of people, you are ready to proceed to prepare for playing the balance transfer game. Here are some definitions:

Balance transfer is the act of transferring debt from one credit card to another assuming the newer card has better terms and rates. According to the definition, you can only do balance transfer between credit card accounts. However, there are many direct and indirect ways to put money into your saving/CD account. So, technically, you can use balance transfer to get cash.

Cash advance is a cash loan drawn from the available credit of your credit card account. (You can get cash from an ATM or cash advance check sent by the credit card issuer.) Usually there is no grace period for cash advances. Interest accrues daily until the complete balance is paid in full. Transaction fees may apply.

Double Billing also known as two-cycle billing. Finance charges are calculated on the balance you hold over the two previous months, rather than on the average daily balance for one month.

Finance Charge is interest and other fees applied against purchases, balance transfers and cash advances. Unless the issuer has a grace period, finance charges are accrued until the credit card debt is paid off.

Minimum Payment is, to not default, the minimum amount the cardholder is required to pay.

It’s important to remember the definitions of the above terms as you need to read carefully about the fine print of your credit card agreement. Once you submit your application, you’re supposed to accept the terms and conditions issued by the bank. All the information you need to evaluate the balance transfer offers can be found at terms and conditions.

Let’s take a look at the perfect Citi professional card. You can find the following features in the terms and conditions:

Annual fees: none

APR for purchases: 13.24% variable

Balance transfer APR: As long as balance transfers are completed within 9 months from date of account opening, 0.00% for 9 months from date of first balance transfer. After that same as for purchases.

Cash advance APR: 22.24% variable.

Default APR: 31.24% variable.

Balance transfer fee: 3% of each balance transfer; $5 minimum, $50 maximum. There is no fee with the 0.00% APR balance transfer offer described above.

You can see the screenshot:

This card is currently offering $15,000 ThankYou Points after first purchase. Meanwhile this card is also offering 0% APR on balance transfer for 9 months without any balance transfer fees. Can you imagine how much you can get from this card by combining sign-up bonus and earning from balance transfer?

All major US banks are reporting loss this year. Most banks are not offering 0 fee balance transfer offers. For example, Bank of America is charging 3% balance transfer fees for all balance transfer requests without limit! It’s really hard to find out balance transfer deals these days. My next post is to list the best balance transfer cards.