Balance Transfer Calculator
The ability to transfer high-interest debt to a credit card with a lower interest rate or an introductory 0% APR rate can help you save money. Balance transfer fees typically range from 3% to 5% of the amount transferred when you shift a balance from one card to another. The balance transfer fee will add to your debt, but it is usually less than the double-digit interest rates you typically pay on a credit card.
Some cards don’t charge a balance transfer fee, which can make the process less expensive in the long run. However, if you want to pay off your debt the fastest, cards with the longest introductory 0% APR offers typically charge fees.
What Is a Balance Transfer?
Balance transfers transfer balances from one account or card to another, preferably with a lower or 0% interest rate. Many different types of low rates are available, ranging from introductory rates to promotions that last only for a certain period. Generally, these rates last from six months to nearly two years. Additionally, a fee is usually associated with balance transfers ranging from 3% to 5%.
If you are considering getting a new credit card, check your current balance transfer offers before you apply. The balance transfer feature is not available on most cards, but you can take advantage of existing offers instead of getting a new card.
Balance transfer cards with long introductory 0% APR periods are generally the best option. A balance transfer card might allow those only making minimum payments to get a handle on their principal debt.
How Does a Balance Transfer Work?
Transferring a balance involves using the open credit line on another card to pay off your old credit card balance. If you have one or more credit card balances incurring high-interest charges, transferring your balances to a lower-interest card could save you a lot of money.
Balance transfers involve your new credit card company paying your old company to settle the debt. When you make a successful payment, the balance of your old card is transferred to your new account.
How To Use the Balance Transfer Calculator
Balance transfer cards are best suited for people who save on interest over the introductory 0% period but would pay more upfront in balance transfer fees once the 0% period ends.
Enter Your Current Card Information: The balance transfer calculator will ask you for the details of your current card. Enter the amount of debt you want to transfer from your current card in the first box. Fill out the second box with the interest rate on the balance you’re currently paying. Lastly, enter the monthly repayment amount toward the balance.
The process should be repeated for each card you want to transfer a balance.
Enter the New Card’s Details: You will then be required to enter the information for the new balance transfer card you are considering. Among these are the ongoing interest rate, the amount of monthly payment you’ll make toward the balance after the promotional period ends, the annual fee, as well as the terms of the introductory offer, such as the promotional APR, the length of the offer, and fees associated with balance transfers. When all relevant information has been entered, click “Calculate.”
Analyze Your Results: You can use the calculator to calculate how much you can save by transferring your current balance to a card that offers low or 0% APR balance transfers. Your new card will also show how much you’ll need to pay in monthly payments to pay off your balance completely before the promotional period ends if you pay it off at the current rate with your old card(s).
The “See Payoff Charts” button shows a detailed month-over-month comparison of how much you’d save if you paid off your current card and a new card with a promotional balance transfer offer.
Calculate the Balance Transfer Fee
Balance transfers to 0% introductory rate cards will only charge interest once the introductory period ends. However, most cards charge a balance transfer fee the first time you transfer a balance from another card.
A balance transfer fee is typically charged as a percentage of the balance transfer amount. For example, a $20 fee for transferring a $1,000 balance with a 2% fee would be charged.
A balance transfer fee is calculated by multiplying the total transferred balance by the percentage listed on the user agreement for your new card.
FAQs
How Long Does a Balance Transfer Take?
There may be a difference in time between a balance transfer and a withdrawal, which can range anywhere from two to six weeks or more. Balance transfers take different amounts of time depending on the bank involved, and each bank estimates the time involved.
What is a Balance Transfer, and Why Should I Use One?
Balance transfers occur when you transfer debt from one account to another, typically to one with a lower interest rate, and can be a great solution for reorganizing debt, paying off medical bills, or repaying student loans. Balance transfers result in less interest being paid each month or no interest being paid at all, depending on your credit card’s introductory 0% APR offer. The balance transfer fee generally adds to the savings you’ll see. When you pay less interest, you’ll save some of the money you would have paid your issuer otherwise.
Will a Balance Transfer Always Save Me Money?
A balance transfer is only beneficial if it results in significant savings on interest over the transfer cost. If you intend to pay off your debt within the next month or two, keep it where it is and pay it off directly rather than paying 3% to 5% to move it from one card to another.
When is a Balance Transfer Worth it?
A balance transfer can save you money if it earns you interest. However, balance transfers are only worthwhile if you can save money within the time frame you plan to pay off the balance.
