Credit Card Balance Transfer Calculator

Are you looking for a way to calculate a credit card balance transfer and want to get recommendations through comparison? In this post, I will guide you step-by-step through what credit card balance transfer is, and how it is calculated, along with an example and FAQs.

What Is a Credit Card Balance Transfer?

In simple words, a credit card balance transfer is a method of transferring debt from one credit card (with a high interest rate) to another credit card with a lower interest rate (typically offering lower or even 0% interest rate).

Why do people actually transfer their debt from one credit card to another? People often do this to save money on interest and pay off the debt faster.

What is the Credit Card Balance Transfer Calculator — And how it is calculated?

Credit Card Balance Transfer Calculator is an online tool that helps you compare the balance transfer recommendations based on the user's entered data. Here is how it's calculated in simple terms:

The calculator allows users to compare:

• A debt repayment plan with your existing credit card
• A new plan on another credit card that typically includes balance transfer with a lower APR (Annual Percentage Rate). 

What the calculated result shows:

• It tells you whether moving balance is beneficial
• Total cost difference
• How much you will pay interest rate in both cases
• How long will it take to pay off your debt

What does this calculator require inputs data?

Our calculator requires the following inputs to give you an accurate result:

• Current Balance - how much balance you owe on your credit card
• Current APR - this is annual interest rate on your existing card
• Monthly Payment - What you plan to pay the debt every month
• Transfer Fee Rate - In percentage, the fee charged for transferring the balance
• Promotional APR - This is interest rate on the new card with limited time
• Promotional Period - This is duration in months of the promo APR (Annual Percentage Rate)
• Regular APR (after promo) - It is interest rate that start after promotional period ends

Real World Example — Credit Card Balance Transfer

Imagine you are in the following credit situation and get balance transfer offer:

• Current Balance = 5,000 dollars
• Current APR = 20%
• Monthly Payment = 200 dollars
• Transfer Fee Rate = 3%
• Promo APR = 0%
• Promo Period = 12 months
• Regular APR = 18%

Now let's perform step by step calculation to calculate if transferring is worth it:

1. Transfer Fee = 5,000 dollars × 3% = 150 dollars
2. New Balance = 5,000 dollars + 150 dollars = 5,150 dollars
3. Current Card:
   • Interest builds quickly at 20%
   • Total Cost ≈ 6,880 dollars
   • Payoff Time ≈ 35 months
4. Balance Transfer Card:
   • 0% interest for 12 months
   • 18% after that
   • Total Cost ≈ 6,200 dollars
   • Payoff Time ≈ 32 months

This mean that you can save around 680 dollars and also pay off the debt 3 months earlier.