There was a time when my friends and I found that we were lagging way behind in our credit card bill repayments. There are the monthly insurance premiums, mortgages and car loans to think of, and we were not sure if our salaries (combined with our respective husbands' salaries) could take any more load.

A balance transfer was at the back of my mind, but I did not have enough knowledge about it to even have the courage to bring up the topic. However, I was fortunate, for I had a friend working in a finance company who was willing to show me the ropes.

What is a balance transfer?If you have not been able to pay for your credit card debt, you can transfer the balance to another card issuer. Balance transfer credit cards offer you a solution to avoid paying those heft late payment charges. Many people opt for balance transfer because another issuer is offering lower interest rates.

Why is balance transfer a good idea?If you have been unable to pay off your credit card balance, it is most likely that the finance charges are adding up to your debt on a monthly basis. Availing of a balance transfer credit card could help you make a whole new beginning.

You do not have to worry about being charged with late payment fees as long as you keep paying for the minimum amount due every month. It is always better if you pay more of course. People who are looking to add to their savings, should make an effort to find a low-priced balance transfer credit card.

What is the procedure for obtaining balance transfer?Be prepared to do some research if you want to find the best balance transfer credit card providers. Make sure that their interest rates are much lower compared to your old card issuer - it's possible to get 1% to 2% interest if you take your time negotiating and researching for a reputable company.

In fact, many banks are willing to offer balance transfer credit cards at no extra cost. Some will give you a grace period of six months to a year, where in they charge a lower interest on your transferred balance. Because these card issuers want your business, they will be more than happy to accommodate you. Moreover, the speed of the procedure could be mind-boggling.

How is my credit score affected with balance transfer?This is the tricky part. If you are just going to transfer the balance to another card, your credit score is safe. Some say that it is better to close the old credit account, but that is not true in most cases. Not only does part of your credit history get "erased", your debt ratio will be affected negatively especially if your new card has a lower credit limit.

On the other hand, having an open bank account will also affect your credit score, but not as much as closing it. The best thing to do is to keep both accounts open. As long as you pay off the bills on the new card regularly, there should be no harm in keeping the old card in use as well.