In recent years there has been a trend amongst credit card companies to offer balance transfer deals on credit cards. The purpose of these offers is to obviously entice credit card holders away from there exising companies and hope that when the offer expires the cardholder will remain with them. A typical balance transfer deal is 0% for 6 months. This means that a new cardholder can transfer an existing balance to a new card and for the first 6 months the 0% interest will apply to the transferred balance. There are variations on the length of the period and the introductory rate. Also, there are a few things to be considered such as the size of the credit limit and the size of the transferred balance, what happens when the offer peiod expires, new purchases and so on.
It is often the case that an introductory offer on new purchases will run in parallel with the balance transfer offer. If not then new purchases will be charged at the standard APR. This means that if there is no purchase offer on the card then there are in effect two different balances within the overall balance on the card. Therefore, when the monthly payment is made it is important to understand how the two different balances are handled. As you would expect the credit card companies tend to reduce the 0% balance more than the standard APR balance and so increase the portion of the overall balance that is earning the standard rate. This is why is quite a good idea to consider seperate cards if you are transferring a balance and are still expecting to make purchases. You could look to get a balance transfer offer on one card and a purchase offer on the other.
When the balance transfer period expires the outstanding balance will revert to the card's standard rate. At this point it is advisable to have a clear idea of what you intend to with this balance. If you plan to move it to another balance transfer deal, then its a good idea to start this process a few weeks before the end of the current deal.