Balance Transfer Calculator
Check whether moving a card balance to a lower-rate card saves money after the transfer fee.
Charged on the amount transferred.
Enter the rate for the promotional period only.
- Net saving from transferring
- $1,039.49
- Interest if you stay
- $1,159.49
- Transfer fee
- $120.00
- Interest after transfer
- $0.00
Transferring saves $1,039.49 after the fee, and clears the balance in 1 year 9 months instead of 2 years 2 months. A negative saving means the transfer costs more. Offers often end, so check the rate after the promotion.
How it is calculated
Net saving = interest if you stay − transfer fee − interest after transfer
Example: $4,000 at 24% with a 3% fee, moved to a 0% offer and paid at $200 a month, saves about $1,039.49.
Assumptions and limitations
- The promotional rate is assumed to apply for the whole payoff. Most offers end after a set period.
- The same monthly payment is used on both cards.
- New purchases are not included, and they can cost more on the new card.
What a balance transfer is
A balance transfer moves the debt on one credit card to another card, usually to take advantage of a lower interest rate for a set period. Many offers include a fee, calculated as a percentage of the amount moved. The aim is to pay less interest than you would have paid by keeping the debt where it is.
Whether a transfer saves money depends on three figures: the rate you pay now, the rate on the new card during the offer, and the fee. This calculator compares the two options at the same monthly payment, so you can see the difference in interest and in the time to clear the debt.
How the calculation works
Each option is modelled month by month. Interest is added to the balance at one-twelfth of the annual rate, then the monthly payment is applied. The calculator runs this for the card you keep and for the new card with the transferred balance, which includes the transfer fee. The net saving is the interest on the old card, minus the fee, minus the interest on the new card.
A worked example
Suppose 4,000 is owed at 24% and you could move it to a card charging 0% with a 3% fee, paying 200 a month. The fee adds 120 to the balance. Keeping the card costs about 1,159 in interest over roughly 26 months. Moving the balance costs the 120 fee and no interest during the offer, clearing the debt in about 21 months. The net saving is about 1,039.
Check the offer, not just the headline rate
The rate in the calculator is assumed to apply for the whole payoff. Most offers last a fixed number of months, after which the rate rises, often to a level above your current card. If you cannot clear the transferred balance within the promotional period, the saving shrinks, so compare the time to repay with the length of the offer.
Read the terms for the fee, the length of the offer, the rate after it ends, the minimum payment rules, and whether new purchases are charged at a higher rate. Some cards apply payments to the lowest-rate balance first, which can leave the transferred balance accruing interest for longer than you expect.
Common mistakes
The most common mistake is to keep using the old card after moving the balance. The old card then carries new debt at its normal rate alongside the transferred balance. A second mistake is to pay only the minimum on the new card, which leaves the balance outstanding when the offer ends. A third is to ignore the fee when the offer is short, because the fee can be larger than the interest saved.
What the calculator does not include
New purchases, late payment charges, and any change in your credit limit are not modelled. The calculator also assumes you can make the same monthly payment on both cards and that the new card accepts the full transfer. Check these before you rely on the result.
Use the calculator to decide whether a transfer is worth the effort and the fee. If the net saving is small or negative, a personal loan or a faster payment plan may do better, and the debt payoff calculator can compare those options.
Frequently asked questions
Does a balance transfer always save money?
No. It saves money when the interest avoided is larger than the transfer fee and the rate after any promotion. A short offer or a large fee can make it cost more than it saves.
Why does the fee get added to the balance?
Most cards add the transfer fee to the amount you owe, so you pay interest on it too. The calculator includes the fee in the new balance before working out the interest.
What if I cannot clear the balance before the offer ends?
The rate usually rises to the card's standard level. Work out the payment that would clear the balance within the promotional period, and check whether you can afford it.
Should I keep using the old card?
Usually not. New purchases on the old card add debt at its normal rate, which can cancel out the saving. Many people close or freeze the old card once the balance has moved.
Is the monthly payment the same on both cards?
The calculator assumes so, to make a fair comparison. In practice the payment may change, and the minimum you must pay on each card can differ, so check both before you decide.