Balance Transfer Calculator for
Calculating Credit Card Offers

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Help you to see if you will actually save money by transferring a balance from a current card to a card with a low introductory rate.

This free online Balance Transfer Calculator will calculate the net consequences of transferring higher rate credit card balances to a card offering a low introductory rate.

The balance transfer calculator takes into consideration your current monthly interest and fees and compares them to before and after the introductory offer -- including any balance transfer fees that may apply.

What is a Balance Transfer?

A balance transfer is what usually happens when we allow the balance on a high interest rate card to creep up to the point we are forced to take on a part-time job just to pay the interest charges on the credit card.

About that time we get a balance transfer offer in the mail stating that they will allow us transfer our higher rate balances to a their card and they will charge us little or no interest for a period of 6-months to a year. Sounds good, right?

It is a good deal, but only if you cut up the cards and close the accounts you transfer the balances from. Otherwise, guess what typically happens? That's right, because you have little or no available credit on the new card, you end up charging purchases to the cards that now have plenty of available credit.

In other words, if you have not learned your lesson about carrying balances on credit cards before you make a balance transfer, you will most likely end up with two, three, or four times the amount of credit card debt as you had before the balance transfer. Why do you think credit card companies make those generous balance transfer offers?

What Are the Factors to Consider?

When considering a credit card balance transfer offer, here are some factors you need to be aware of before making your decision.

Penalty APR Supersedes Introductory Rate

If you read the fine print on the credit card offer you will likely "discover" that if you're late making just one of your payments, your "introductory rate" will permanently skyrocket to a Penalty APR of up to 29.99%! Now, if you have a working crystal ball that says you will never experience a sudden loss or drop in income, then feel free to totally disregard this warning.

Balance Transfer Fees

In most cases you can expect to pay a 3% to 5% fee on the total of transferred balances. In other words, the 0% APR being advertised is true only if you consider the balance transfer fee to not be a sly way to charge you interest anyway. What's more, the balance transfer fee is usually added to your transferred balance, which could result in you exceeding your credit limit, and viola! You're the proud owner of a brand new Penalty APR!

Post Introductory Period Rate?

Typically the credit card company will state something like, "After that (introductory period), your APR will be 10.99% to 18.99% based on your creditworthiness and will vary with the market based on the Prime Rate."

If you think your post introductory rate will be 10.99% after they just spent 6-months to a year collecting little or no interest from you, then the phone is for you -- it's reality calling.

No Rewards or Grace Periods

In the fine print of most offers you will "discover" that transferred balances do not earn rewards and there is no grace period for avoiding interest charges.

Friend or Foe?

The balance transfer sales pitches all have that "We're Your Friend and We've Come to Your Rescue!" type of revelation on them, but would a true friend make the following kinds of statements when making an offer to assist you?

  • "We use the highest prime rate listed in the Wall Street Journal ..."
  • "Each time you fail to make a payment when due, we may add up to five percentage points to your APR."
  • "We will apply payments at our discretion, including a manner most favorable or convenient for us."

The defense rests.

With that, let's use the balance transfer calculator to calculate the net consequences of transferring your higher rate credit card balances to a low introductory rate offer.

Credit Card Balance Transfer Calculator
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Instructions: Enter the balance transfer offer terms, then enter the balance, interest rate and annual fee for each credit card you would like to transfer balances from. Then click the "Calculate Balance Transfer" button.

Mouse over the blue question marks for a further explanation of each entry field. More in-depth explanations can be found in the glossary of terms located beneath the Balance Transfer Calculator.

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Details Regarding Credit Card Balance Transfer Offer
Help Introductory interest rate (%):
Help Introductory term in months (#):
Help Post introductory term interest rate (%):
Help Annual fee ($):
Help Balance transfer fee percentage (%):
Help Balance transfer fee cap ($):
# Credit Card Entry Columns Calculated Columns
Help
CC
#
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Credit
Card
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Balance
Owed ($)
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Interest
Rate (%)
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Annual
Fee ($)
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Monthly
Cost
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Intro
Term
Cost
1
2
3
4
5
Introductory Term Comparison
Results Balance Monthly
Interest
Monthly
Fees
Monthly
Totals
Term
Totals
Help Current totals:
Help Transfer totals:
Help Introductory term balance transfer savings:
Post Introductory Term Comparison
Results Balance Monthly
Interest
Monthly
Fees
Monthly
Totals
Annual
Totals
Help Current totals:
Help Transfer totals:
Help Post introductory term balance transfer savings:
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Balance Transfer Calculator Glossary of Terms

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Calculator Entries Regarding Credit Card Balance Transfer Offer

Introductory interest rate: The introductory annual interest rate of the credit card you will be transfering balances to. If the introductory rate is 0%, simply enter 0%. Enter as a percentage (for .039, enter 3.9%). But be forewarned, if you are late making just one payment you may suddenly find yourself paying a Penalty APR of as high as 29.99%!

Introductory term in months: The number of months the introductory interest rate will last for, which is usually 6 to 12 months.

Post introductory term interest rate: The annual interest rate that will go into affect once the introductory term has ended. If the offer states a range of possibilities (e.g., 10.99% to 18.99%), enter the highest rate listed. When doing any financial forecasting it's always best to estimate income low and expenses high. Enter as a percentage (for .1899, enter 18.99%).

Annual fee: If the card you are transferring balances to has an annual fee, enter the amount on this line. Otherwise leave blank or enter a zero. The balance transfer calculator will divide the annual cost by 12 to come up with a monthly fee for comparison purposes.

Balance transfer fee percentage: The balance transfer fee percentage (usually 3% to 5%). Enter as a percentage (for .03, enter 3%). The balance transfer calculator will include fee in the transferred balance on the new card.

Balance transfer fee cap: The balance transfer fee cap or maximum (usually $50 to $75 when offered). If no balance transfer fee cap is stated in the offer, leave this line blank.

Calculator Entries Regarding Credit Card Balances to Transfer

CC # column: This column is just for keeping track of how many credit cards you are including in the balance transfer.

Credit Card column: Optional: Enter the name of each credit card for the purpose of keeping track of which cards you have entered.

Balance Owed column: The balance owed for each entered credit card, which usually appears on your monthly credit card statement. However, if you have made any purchases or taken any cash advances since your last statement, be sure to include those as well.

Interest Rate column: The annual interest rate of each credit card as a percentage (for .1899, enter 18.99%). If a certain credit card has more than one interest rate (1 for purchases and 1 for cash advances), enter the lower of the two so as not to skew the results in favor of a balance transfer.

Annual Fee column: The annual fee for each credit card that charges one. If a card does not charge an annual fee, either leave blank or enter a zero.

Monthly Cost column: Based on the balance owed, interest rate, and annual fee entries, the balance transfer calculator will automatically calculate how much interest and fees you will pay on each card per month if the balance remains unchanged.

Intro Term Cost column: The balance transfer calculator multiplies the monthly cost by the number of months in the introductory term, giving you your introductory term costs for each card if you decide not to transfer your balances to the new credit card.

Calculator Results: Introductory Term Comparison

Current totals row: This row contains the totals of your current credit card balances, interest costs, and fees.

Transfer totals row: This row contains the calculations of your current credit card balances if transferred to the card you entered balance transfer terms for. Note that the balance includes the addition of the balance transfer fee, which is also included in the monthly fee result field (transfer fee ÷ introductory months).

Introductory term balance transfer savings row: This row contains the monthly and introductory term savings (or loss) that will occur if you transfer the entered balances to the new credit card -- assuming all balances remain unchanged for the introductory term. If the results are negative, that means transferring balances will actually end up costing you more money than you are currently paying out.

Calculator Results: Post Introductory Term Comparison

Current totals row: This row contains the totals of your current credit card balances, interest costs, and fees.

Transfer totals row: The balance transfer calculator calculates the consequences of your current credit card balances if transferred to the card you entered balance transfer terms for -- but does not include the introductory period.

Post introductory term balance transfer savings row: This row contains the monthly and annual savings (or loss) that will occur after the introductory term expires -- assuming the transferred balances remain unchanged. If the results are negative, that means transferring balances will actually end up costing you more money than you are currently paying out once the introductory period expires.

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