Understanding your balance transfer results
The sign of the net savings figure answers the core question — does the transfer beat staying put at your payment level? The table summarizes the cases.
| Result | What it means |
|---|---|
| Net savings clearly positive | The interest avoided exceeds the fee — the transfer is cheaper than staying at the current APR, at this payment level |
| Net savings near zero or negative | The fee eats most or all of the interest benefit — typical when the balance is small, the intro window is short, or the payment clears the debt quickly anyway |
| Verdict shows "paymentTooLow" | The entered payment does not exceed the current card's monthly interest, so the balance would never fall; a higher payment is needed before any comparison is meaningful |
- The verdict result appears only when the payment cannot amortize the debt; otherwise the four numeric results are shown.
- The simulation assumes the regular APR after the intro period equals your current APR; the new card's actual go-to rate may differ, and some offers retroactively charge deferred interest — read the terms.
- New purchases on the transfer card usually accrue interest at the regular purchase APR immediately and can complicate payment allocation; the CFPB advises avoiding new spending on a card carrying a promotional transferred balance.
- A transfer requires approval and a sufficient credit limit on the new card; opening a new account may also temporarily affect credit scores. Educational estimate only, not financial advice.
What is a balance transfer?
A balance transfer moves an outstanding balance from one credit card to another, usually to take advantage of a promotional 0% or low introductory APR on the receiving card. The Consumer Financial Protection Bureau describes the standard structure: a one-time transfer fee (often 3% to 5% of the amount moved, added to the new balance) buys a set number of months during which no interest accrues, after which the card's regular APR applies to whatever balance remains.
The economics are a straightforward trade: the fee is a certain, upfront cost, while the benefit is the interest that would otherwise have accrued at the old card's APR. A transfer saves money only when the interest avoided exceeds the fee — which depends on the balance, the old APR, the length of the 0% window, and critically on how fast the balance is paid down. Paying aggressively during the promotional window maximizes the benefit; paying only minimums can leave a large balance exposed to the regular APR when the window closes.
This calculator simulates both scenarios with the same monthly payment: continuing at the current APR, and transferring (fee added to the balance, 0% during the intro months, then the current APR on any remainder). If the entered payment does not even cover the current card's monthly interest, the calculator reports a "paymentTooLow" verdict instead of results, because the balance would never fall at that payment.
How to use this balance transfer calculator
- Enter the balance you plan to transfer and your current card's APR.
- Enter the transfer fee percentage from the new card's offer (3% and 5% are the most common tiers) and the length of the 0% introductory period in months.
- Enter the monthly payment you will realistically make toward the debt.
- Read the interest avoided, the dollar transfer fee, the net saving after the fee, and how many months the transferred balance takes to clear.
- Worked example: transferring a $5,000 balance at 22% APR with a 3% fee ($150) to a 15-month 0% card, paying $350 per month, clears the debt in 15 months entirely within the 0% window and saves about $701 net of the fee versus staying put.
The math behind a balance transfer
Both scenarios are simulated month by month. In the baseline, interest accrues each month at the current APR ÷ 12 and the payment reduces the balance until it reaches zero. In the transfer scenario, the fee is added to the starting balance, the monthly rate is zero during the introductory months and reverts to the current APR afterward, and the same payment is applied.
Interest avoided is baseline interest minus transfer-scenario interest; net savings subtracts the fee from that. If the payment is less than or equal to the current monthly interest charge (balance × APR ÷ 12), the balance can never amortize, and the calculator returns the "paymentTooLow" verdict rather than a payoff simulation.
Common mistakes
- Ignoring the transfer fee when judging the offer — a 3–5% fee on the full balance is charged upfront and can exceed the interest saved on small balances or short windows.
- Paying only minimums during the 0% window, leaving a large residual balance exposed to the regular APR when the promotion ends.
- Making new purchases on the transfer card, which typically accrue interest immediately and can absorb payments under the card's allocation rules.
- Missing a payment — many offers cancel the promotional rate on a late payment, reverting the balance to a penalty or regular APR.
- Serial transfers without paying down principal, which pays repeated fees while the underlying debt never shrinks.
Часто задаваемые вопросы
Is a balance transfer worth it?
It is worth it when the interest avoided during the 0% window exceeds the transfer fee. That favors larger balances, higher current APRs, longer promotional periods, and aggressive payments. In the worked example — $5,000 at 22% APR, a 3% fee, 15 months at 0%, $350 monthly payments — the transfer saves about $701 after the $150 fee. A small balance that would be paid off in a few months anyway may save little or nothing after the fee.
How much is a typical balance transfer fee?
Most US balance transfer offers charge 3% to 5% of the amount transferred, often with a minimum of $5 to $10, and the fee is added to the transferred balance rather than paid separately. A $5,000 transfer at 3% costs $150, meaning the new card starts with a $5,150 balance. A minority of offers, typically from credit unions, waive the fee.
What happens when the 0% introductory period ends?
Any balance remaining when the promotional period ends begins accruing interest at the card's regular APR from that point forward. Standard balance-transfer promotions are not deferred-interest deals — interest is not charged retroactively — but 'no interest if paid in full' financing promotions (common in store cards) do charge deferred interest retroactively, so the CFPB advises checking which type of promotion an offer is.
Why does the calculator say my payment is too low?
The "paymentTooLow" verdict appears when your monthly payment is less than or equal to the current monthly interest charge — the balance times the APR divided by 12. At that level the balance never decreases, so neither payoff path can be simulated. For a $5,000 balance at 22% APR, monthly interest is about $91.67, so any payment at or below that amount triggers the verdict.
Does a balance transfer hurt my credit score?
Opening a new card generates a hard inquiry and lowers average account age, which can temporarily dip scores, while the added credit limit can lower overall utilization, which tends to help. The larger effect over time comes from whether the underlying debt actually falls. Credit-scoring effects vary by individual profile; this calculator models only the interest arithmetic, not credit outcomes.
Can I transfer a balance between cards from the same bank?
Generally no — issuers almost universally prohibit transferring balances between their own cards. Balance transfer offers are designed to acquire debt from competing issuers. If most of your debt sits with one bank, eligible transfer offers will need to come from a different issuer.
Источники
- Consumer Financial Protection Bureau (CFPB). What is a balance transfer and how does a balance transfer fee work? consumerfinance.gov.
- Consumer Financial Protection Bureau (CFPB). What is a deferred interest / promotional APR offer? consumerfinance.gov.
- Federal Reserve Board. Consumer credit and credit card agreements — Regulation Z (Truth in Lending) payment allocation rules. federalreserve.gov.
- Federal Trade Commission (FTC). Using credit cards and disputing charges — consumer guidance. consumer.ftc.gov.