A 0 per cent balance transfer of $10,000 from a card charging 15 per cent interest saves $1,500 over 12 months.

At least, that's the theory. There are a host of balance transfer rules, charges and fees that can make balance transfers significantly more expensive. Below are six proactive steps for managing balance transfers wisely.

1. Create a transfer repayment plan.
A balance transfer is a short-term loan. Your priority is to pay off the transferred debt before the end of the introductory period, at which time interest rates can skyrocket.

Start your plan by calculating the monthly payment you can afford. Multiply that amount times the number of months in the promotional period. If you can pay $500 per month for 10 months, your maximum transfer amount is $5,000 minus costs. If you can only afford $100 monthly payments under a deal with a 6-month teaser rate, you should budget for a maximum $600 balance transfer.

Also specify in your plan worst-case options for unpaid balances after the promotional period. However, be careful to limit the number of credit card accounts you open, since frequent transfer applications can lower your credit score.

Tip: Consider other low-cost borrowing solutions like home equity loans.

2. Verify balance transfer eligibility requirements.
Many balance transfer deals have minimum requirements for applicant credit scores and annual earnings. Even if you fall below those standards, you may still qualify for a shorter promotional period.

Balance transfers are usually restricted to new customers. Moving an amount from an existing card to another from the same card issuer is treated like a cash advance, subject to much higher interest rates starting immediately on the transfer date.

Tip: Before applying, ask for details about fine-print transfer conditions, limitations and exclusions.

3. Determine total balance transfer costs.
Try not to fixate on enticing balance transfer APRs, which typically range from 0 to 9.99 per cent. Instead, visualize the bigger picture when it comes to expenses.

For example, there's usually a balance transfer fee of 1 per cent to 5 per cent that is immediately added to the amount you owe. If the balance transfer card charges an annual fee, be sure to include that in your cost calculations too.

Consumers often overlook how long it takes to complete the balance transfer process. If four weeks are necessary, you must cover carrying charges on your old card during that period. For example, a $10,000 balance at 20 per cent costs an extra $167 for those four weeks.

Tip: Confirm all balance transfer expenses in advance and only proceed if you're really saving money.

4. Identify balance transfer penalties.
Be vigilant for penalties that apply during and after transfer offers. Some cards automatically boost the post-promotion APR by 5 per cent if you miss a single monthly payment or go over your credit limit.

In fact, failing to satisfy any term in the balance transfer cardholder agreement can bump a painful 20 per cent interest rate up to an unbearable 25 per cent.

Tip: Cancel your old card to avoid paying any annual fee and inactive account penalties.

5. Focus on the introductory period.
One of the strongest incentives for extinguishing balance transfer debt within the introductory period is the onerous rate effective after the promotional period expires. Some cards also impose time limits after which balance transfers are unavailable. The MBNA Platinum Plus credit card requires that balance transfers be posted within 120 days of opening your account.

Purchase transactions during a balance transfer promotion can be subject to a much higher APR. Worse, any minimum payments you make won't apply to those high-interest buys until after the balance transfer is fully repaid.

Tip: Carefully control purchases during your balance transfer card's promotional period.

6. Stick with your repayment plan.
The major purpose of your plan is to avoid paying more on your balance transfer card than you would have otherwise paid with your original credit card. To stay on track with your repayment plan, work with your financial institution. Most card companies readily communicate via toll-free client service numbers, online chat services and social media, including Facebook and Twitter.

Almost two-thirds of Canadians settle their credit card balances each month, according to a May 2011 assessment from the Canadian Bankers Association. Make sure that you're part of that majority, especially during the balance transfer promotional period.

Tip: Set up automated monthly payments to pay off your transfer balance.

See related: Cash refunds from credit card price protection; Editor's Choice: 7 free online budgeting tools