Find out if a credit card balance transfer actually saves money after fees and the promo period.
A balance transfer moves existing credit card debt from one or more high-interest cards to a new card with a lower rate, typically a promotional 0% APR period lasting 12-21 months. The goal is to eliminate or reduce interest charges so more of your payments go toward paying down the actual debt. Most balance transfer cards charge a fee of 3-5% of the transferred amount.
Enter your current balance, your current card's APR, the balance transfer fee percentage, the promotional APR (usually 0%), the promotional period in months, and the regular APR after the promotional period ends. The calculator shows your total interest saved, the break-even point where savings exceed the transfer fee, and the monthly payment needed to pay off the balance before the promotional rate expires.
A balance transfer is worthwhile when the interest savings exceed the transfer fee and you can realistically pay off the balance during the promotional period. If you have $8,000 at 22% APR and transfer to a card with 0% for 18 months and a 3% fee ($240), you save roughly $2,400 in interest over 18 months minus the $240 fee. That is $2,160 in net savings. The key is committing to paying $457/month to eliminate the balance before the promo ends.