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Balance Transfer Calculator

Enter the balance, current and new APR, transfer fee, and months to find the net savings.

How it is calculated

The tool uses simple interest on a balance that is assumed to stay the same for the whole period. With years = months / 12: old-card interest is B × current_apr / 100 × years, new-card interest is B × new_apr / 100 × years, and the fee is B × fee% / 100. Interest saved is old interest minus new interest, and net savings is interest saved minus the fee. APRs and the fee are percentages (enter 22.9, not 0.229); the term must be at least 1 month. It does not model monthly payments reducing the balance or the promotional rate ending, so real savings on a balance you pay down are smaller than shown.

Worked example

Move a $5,000 balance from a card charging 22.9% APR to a 0% offer with a 3% transfer fee, and plan to keep it 12 months. Years = 12 / 12 = 1. Interest on the old card: 5,000 × 22.9% × 1 = $1,145.00, which is the interest saved because the new rate is 0%. The fee is 5,000 × 3% = $150.00. Net savings = $1,145.00 − $150.00 = $995.00.

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Common mistakes

  • Forgetting that the balance is treated as constant: if you pay it down monthly, the interest you really avoid is lower than the figure shown.
  • Entering the promotional period as the months even though you will need longer to pay off: after the offer ends the rate rises, and this tool does not model that.
  • Leaving the fee at 0 because the offer is advertised as 0% APR; most such offers still charge a transfer fee, which can cancel much of the saving.
  • Typing rates as decimals (0.229) instead of percent numbers (22.9).
  • Entering the new card's regular rate instead of its promotional rate, or the other way round, depending on which period you are comparing.

Sources

About this calculator

A balance transfer moves debt from a high-interest credit card to a card offering a lower promotional APR (often 0% for an introductory period), with the tradeoff that the issuer usually charges a one-time balance transfer fee, typically 3 to 5 percent of the amount moved, added to the new balance at the time of transfer.

Whether the move actually saves money depends on whether the interest avoided on the old card over the payoff period is larger than that upfront fee. This calculator compares interest accrued at the current APR against interest at the new APR plus the transfer fee, over the number of months you plan to take to pay it off, to show the net savings.

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