Transparent method
The formula
Worked example
Example inputs
How to interpret the result
A balance transfer trades a fee for time at a low rate. Moving $7,000 from a card at 24 percent to one with a 0 percent offer costs a 3 percent fee, or $210, and a $450 payment clears the $7,210 in about 16 months, inside an 18 month promotion. If the balance is not gone by the end, the remainder reverts to the standard rate, which can erase the saving. The fee is certain and the saving depends on the payments you make.
Before you rely on it
What to check
Divide the balance plus the fee by the monthly payment you can really afford. If that number is longer than the promotion, the plan needs a larger payment or a longer offer.
The common error
Where people go wrong with balance transfer calculator
Running up new purchases on the old card after transferring. The balance comes back on the old card, and now there are two.
Sensitivity evidence
How monthly payment changes the estimated savings
| Monthly payment | Estimated savings | Balance after promotion |
|---|---|---|
| $360 | $1,349 | $730 |
| $405 | $1,116 | $0.00 |
| $450worked example | $152 | $0.00 |
| $495 | $0.00 | $0.00 |
| $540 | $0.00 | $0.00 |
Every input, tested
Which input moves the estimated savings most
| Input | Tested from | To | Estimated savings at each end | Swing |
|---|---|---|---|---|
| Balance transferred | $6,300 | $7,700 | $0.00 to $1,131 | $1,131 (743%) |
| Promotion length | 13.0 months | 23.0 months | $879 to $0.00 | $879 (578%) |
| Monthly payment | $405 | $495 | $1,116 to $0.00 | $1,116 (733%) |
| Current APR | 22.0% | 26.0% | $3.11 to $307 | $304 (200%) |
| Transfer fee | 2.0% | 4.0% | $222 to $82 | $140 (92%) |
| Promotional APR | 0.000% | 0.250% | $152 to $152 | none |
Two variables at once
Estimated savings by monthly payment and balance transferred
| Monthly payment \ Balance transferred | $5,600 | $7,000 | $8,400 |
|---|---|---|---|
| $360 | $122 | $1,349 | $1,865 |
| $405 | $0.00 | $1,116 | $1,711 |
| $450 | $0.00 | $152 | $1,558 |
| $495 | $0.00 | $0.00 | $1,146 |
| $540 | $0.00 | $0.00 | $183 |
Step by step
The worked example, input by input
| Input | Value used |
|---|---|
| Balance transferred | $7,000 |
| Current APR | 24.0% |
| Promotional APR | 0.000% |
| Promotion length | 18.0 months |
| Transfer fee | 3.0% |
| Monthly payment | $450 |
| Estimated savings | $152 |
| Balance after promotion | $0.00 |
Where the inputs come from
Balance transferred is the amount moved to the new card, current APR is the rate you pay now, promotional APR and promotion length are the introductory terms, often 0% for 12 to 21 months, and the transfer fee is usually 3% to 5% of the amount moved. Monthly payment is what you will pay toward the balance. Read the offer terms for the rate after the promotion and whether new purchases have a different APR.
Using the estimated savings in a real decision
The savings rise with the payment: the larger the share you pay off before the promotion ends, the better it works.
When the result stops applying
If a balance remains when the promotion ends, the regular APR, often high, applies. A missed payment can cancel the promotional rate. The transfer fee is charged up front and added to the balance. Opening a card triggers a credit inquiry and can lower your score slightly, and closing the old card can affect your utilization. Deferred-interest store offers work differently and are riskier.
What to compare it with
Compare with a fixed-rate consolidation loan on the debt consolidation calculator, and check the payoff timeline on the credit card payoff page. The credit utilization calculator shows the effect on your score. Set up automatic payments so a single missed due date does not end the offer.
People also ask
Frequently asked questions
Is a balance transfer worth the fee?
Usually if you can pay off most of the balance during the promotion. A 3% fee on a high-rate balance is small compared with months of 20% interest.
What happens when the promotional rate ends?
The remaining balance is charged the card's regular APR, which can be high, so plan to pay it off or move it again before then.
Does a balance transfer hurt my credit?
It can cause a small, temporary dip from the credit inquiry and new account, but paying down the balance and lowering utilization tends to help over time.