Balance transfer calculator: does the fee pay for itself
A balance transfer moves credit card debt to a card with a low or 0% promotional rate, usually for a one-time fee that is added to the balance. Whether that move saves money depends on three things working together: the fee, how much of the balance is still owing when the promotion ends, and what rate applies to whatever is left. The Balance-Transfer Calculator runs both paths month by month, staying put and moving, and reports the difference in total cost.
The decision it answers
The decision here is whether a specific transfer offer costs less in total than paying down the same balance where it is now, at the same monthly payment. A second question sits right behind it: can the transferred balance be cleared before the promotion ends, and if not, how much survives to meet the higher rate. The tool answers both, and it treats deferred-interest offers separately because they behave very differently when a balance survives the deadline.
How the tool computes it
Staying put
amortise() runs the current balance at your current APR with a fixed monthly payment, month by month, adding interest and subtracting the payment until the balance clears or 1,200 months pass. If the payment does not cover the monthly interest, calcSave() shows a guard message instead of a comparison.
Transferring
calcSave() first adds the fee (balance times the fee percentage) to the amount moved. amortisePromo() then charges the promo rate for the promo months and the rate after the promo for any remainder. The net figure is interest staying put minus the sum of transfer interest and the fee; a positive number is shown as a saving and a negative one as a loss.
Deferred interest and the clock
When the deferred-interest box is checked, amortisePromo() accrues interest at the post-promo rate in the background during the promotion and bills all of it at the deadline if any balance is left. calcClock() uses paymentToClear(), a standard annuity formula, to show the monthly payment that would clear the transferred amount inside the promo window, and the balance left the day the promotion ends.
Worked example
These inputs are hypothetical, not a real person or account. The results were produced by running the tool's own calculation code on them.
- Card balance: $8,000
- Current APR: 23.99%
- Monthly payment: $400
- Transfer fee: 3%
- Promo APR and length: 0% for 15 months
- Rate after the promo: 25.99%
- Staying put, $400 a month at 23.99% clears $8,000 in 26 months with $2,318 of interest along the way.
- Transferring adds a $240 fee, so $8,240 moves to the new card.
- At $400 a month over 15 months, $2,240 is still owing when the promo ends. That remainder accrues $174 of interest at 25.99% until it clears.
- Total cost of transferring is the $240 fee plus $174 of interest, or $414, against $2,318 staying put. The tool reports a difference of about $1,904.
- The beat-the-clock tab shows that $549 a month would clear the full $8,240 inside the 15-month window.
- Change one thing, mark it as a deferred-interest offer, and the result flips. Because $2,240 survives the deadline, $1,767 of back-interest is billed at once, transfer interest rises to $2,327, total cost becomes $2,567, and the tool reports a loss of about $250 compared with staying put.
In this hypothetical, a true 0% transfer costs about $1,904 less in this model; the same terms as a deferred-interest offer cost about $250 more than staying put.
Assumptions and limits
- The same fixed monthly payment is assumed on both paths for the whole period.
- No new purchases are added to either card, and no late fees or penalty APRs are modeled.
- Interest is computed monthly on the running balance as APR divided by 12; real card statements use daily balances, so actual figures differ slightly.
- The fee is a percentage of the amount moved; minimum dollar fees some issuers charge are not modeled.
- Whether an offer is a true 0% rate or deferred interest is something you set; the tool cannot read card terms.
- Credit score effects of opening or using a new card are outside the calculation.
Sources for the rules on this page
Run it with your own numbers
The Balance-Transfer Calculator is free, but it needs a free Obsidian Metrics account: signed-out visitors are sent to sign in first.
Frequently asked
How does a balance transfer fee affect the savings?
The fee is charged once and added to the balance moved, so you pay down more than you transferred. In the tool, the fee is part of the total cost of transferring and is compared directly with the interest you would pay by staying on the current card.
What is the difference between 0% interest and deferred interest?
With a true 0% promotion, interest is only charged on whatever balance is left after the promo ends. With a deferred-interest offer, interest accrues in the background during the promotion and is billed in full if any balance is left at the deadline. The worked example shows how that one difference can turn a saving into a loss.
How is the payment to clear the balance in time calculated?
paymentToClear() spreads the transferred amount, fee included, over the promo months using a standard annuity formula. At a 0% promo rate that is simply the amount owed divided by the number of months.
Why does the tool refuse to compare when my payment is low?
If the monthly payment does not cover the interest charged on the current card, that balance never falls, and a comparison would be meaningless. The tool asks for a payment above the monthly interest before it shows a result.
Does the calculator recommend a card?
No. It does not name or rank any card or issuer. It compares two cost paths using the terms you type in, and you can copy or print the result.
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Talk it through
The free Obsidian Metrics community on Skool is where members discuss decisions like this one and the frameworks behind them. It is education, not personal advice.