Playing the Balance Transfer Game

If you're carrying heavy credit card debt, playing the balance transfer game can save you serious money. The trick is to take advantage of "teaser" rates and grace periods by continually shifting balances

from higher- to lower-rate cards. If you have the energy and discipline, this strategy can serve as a quick and reliable source of low-cost loans for your business. But be careful: it can also end up a time-consuming distraction.

Take advantage of teaser rates. Teaser rates are introductory interest rates that last for a limited time — usually three to six months. These rates are often quite low. By transferring current balances to these cards from cards that charge 15 percent or more, you can potentially save a lot of money.

Be aware, however, that banks usually treat balance transfers as cash advances. While policies vary from card to card, cash advances often carry fees that may be calculated as a percentage of the entire amount transferred. Cash advances also typically accrue daily interest until paid, without a grace period. That could cost you some real money if the balance that you are transferring is large. However, fees are sometimes waived for introductory or promotional balance transfers.