Estimate potential savings and costs when transferring balances.
Estimated Savings & Costs
$0.00
Understanding Credit Card Balance Transfers
A credit card balance transfer is a financial strategy where you move outstanding debt from one or more credit cards to a new credit card, often with a lower introductory Annual Percentage Rate (APR), typically 0% for a set period. This can be a powerful tool for managing debt, saving money on interest, and simplifying payments.
How a Balance Transfer Works:
New Card: You apply for a new credit card that offers a balance transfer promotion.
Transfer Fee: Most balance transfers come with a fee, usually a percentage of the amount transferred (e.g., 3% to 5%).
Promotional APR: The new card offers a low (often 0%) or 0% APR for a specific duration (e.g., 6, 12, 18 months).
Regular APR: After the promotional period ends, the remaining balance will be subject to the card's standard APR, which could be high.
Minimum Payments: You'll still need to make minimum monthly payments throughout the promotional period.
When to Consider a Balance Transfer:
You have high-interest debt on your current credit cards.
You can pay off the transferred balance before the promotional period ends.
You have a good credit score to qualify for the best offers.
You are disciplined enough to avoid accumulating new debt on the old cards or the new card.
The Math Behind the Calculator:
Our calculator helps you estimate the potential savings by comparing the cost of transferring a balance to a new card versus keeping it on your old card. Here's a simplified breakdown of the calculations:
Balance Transfer Fee: This is a one-time cost calculated as (Current Balance to Transfer) * (Balance Transfer Fee Rate / 100).
Interest Saved During Promo: This is the estimated interest you would pay on the transferred balance if it remained on your old card with its regular APR, during the promotional period. It's calculated using the formula for simple interest, or more accurately, amortized interest if considering monthly payments. For simplicity in this calculator, we estimate savings based on the initial balance and APR over the promo period, assuming minimal principal reduction within the promo. A more precise calculation would involve iterative monthly calculations.
Simple Interest Saved ≈ (Current Balance to Transfer) * (Regular APR / 100) * (Promo Period Months / 12).
(Note: Our calculator uses a more refined monthly calculation for better accuracy).
Total Cost of Transfer: This is primarily the balance transfer fee.
Net Savings:(Estimated Interest Saved During Promo) - (Balance Transfer Fee).
A positive net savings indicates that transferring the balance is financially beneficial, assuming you can manage the debt effectively within the promotional period.
Important Considerations:
Fees: Always factor in the balance transfer fee. A 0% intro APR with a 3% fee means you pay $90 upfront on a $3,000 transfer.
Credit Score Impact: Applying for a new card can temporarily lower your credit score.
Regular APR: Be aware of the regular APR after the promo ends. Plan to pay off the balance before then.
Spending on New Card: Using the new card for purchases may mean the balance transfer doesn't get the 0% APR, or purchases accrue interest immediately.
This calculator provides an estimate. For precise figures, consult your card issuer's terms and conditions.
function calculateTransferSavings() {
var currentBalance = parseFloat(document.getElementById("currentBalance").value);
var transferFeeRate = parseFloat(document.getElementById("transferFeeRate").value);
var transferAPR = parseFloat(document.getElementById("transferAPR").value);
var promoPeriodMonths = parseInt(document.getElementById("promoPeriodMonths").value);
var regularAPR = parseFloat(document.getElementById("regularAPR").value);
var resultElement = document.getElementById("savingsResult");
// Input validation
if (isNaN(currentBalance) || currentBalance < 0 ||
isNaN(transferFeeRate) || transferFeeRate < 0 ||
isNaN(transferAPR) || transferAPR < 0 ||
isNaN(promoPeriodMonths) || promoPeriodMonths <= 0 ||
isNaN(regularAPR) || regularAPR 0) {
for (var i = 0; i 0
// In reality, minimum payments would reduce balance slightly.
// If we were to calculate actual reduction, we'd need minimum payment amount.
// For this calculator, we focus on *potential* interest saved vs fee.
}
}
var interestPaidOnRegularCard = 0;
var balanceOnRegularCard = currentBalance;
// Calculate estimated interest that would have been paid on the regular card
// Using a simplified approach: amortizing the balance over a longer hypothetical period
// or just estimating based on initial balance and promo duration.
// A more accurate way is to simulate payments.
// Let's simulate paying only the minimum on the regular card or a fixed payment.
// For simplicity and to show potential savings, we'll calculate interest accrued over the promo period
// assuming a typical payment structure, or just the interest accrued if no payments were made (worst case for savings).
// A more practical comparison is often against keeping the balance and paying it down slowly.
// Let's simulate paying off the balance over, say, 3 years (36 months) on the regular card.
var hypotheticalPayoffMonthsRegular = 36;
var monthlyPaymentRegular = calculateAmortizedPayment(balanceOnRegularCard, monthlyRegularRate, hypotheticalPayoffMonthsRegular);
var simulatedBalanceRegular = currentBalance;
for (var i = 0; i 0) {
simulatedBalanceRegular -= principalPaid;
} else {
// If interest exceeds payment, only interest accrues, and we can stop early for savings calc
break;
}
if (simulatedBalanceRegular = 0) {
resultElement.textContent = "Estimated Net Savings: " + formattedSavings;
} else {
resultElement.textContent = "Estimated Net Cost: " + formattedSavings.replace('-', "); // Show cost as positive
}
}
// Helper function to calculate monthly payment for amortization
function calculateAmortizedPayment(principal, monthlyRate, termInMonths) {
if (monthlyRate === 0) {
return principal / termInMonths;
}
var payment = principal * (monthlyRate * Math.pow(1 + monthlyRate, termInMonths)) / (Math.pow(1 + monthlyRate, termInMonths) – 1);
return payment;
}