Balance Transfer Savings Calculator

Understanding the Balance Transfer Calculator

High-interest credit card debt can be a significant financial burden, with a large portion of your monthly payment going toward interest rather than principal. A balance transfer can be a powerful strategy to accelerate your debt payoff by moving your balance to a card with a low or 0% introductory Annual Percentage Rate (APR). This calculator helps you quantify the potential savings.

How It Works

The calculator compares the interest you would pay on your current card versus the costs associated with a new balance transfer card over its introductory period.

• Total Balance to Transfer: The amount of debt you want to move.
• Current Card APR: The high interest rate you are currently paying.
• Intro APR & Period: The promotional rate (often 0%) and the number of months it applies on the new card.
• Transfer Fee: The one-time fee charged by the new card company, calculated as a percentage of the transferred balance. This fee is added to your new balance.

The Calculation

The tool calculates the total interest that would accrue on your current card over the same duration as the introductory offer on the new card, assuming you make a consistent monthly payment designed to pay off the debt within that timeframe. It then subtracts the cost of the transfer fee and any interest paid on the new card (if the intro APR is above 0%). The result is your net potential savings. For a balance transfer to be worthwhile, the interest savings must outweigh the transfer fee.

Frequently Asked Questions