What a balance transfer actually costs
Balance transfer offers can look like an obvious win — 0% APR for 12, 15, or even 21 months sounds like free money compared to a card charging 20%+ interest. But every transfer comes with a catch: a one-time fee, usually 3–5% of the balance you move, and a ticking clock. If you don't pay off the transferred balance before the promotional period ends, the leftover amount starts accruing interest at the card's regular — often high — ongoing APR.
This calculator runs both scenarios side by side: staying on your current card and paying it down at your current APR, versus paying the transfer fee, benefiting from the promotional rate, and — if needed — finishing off any remaining balance at the post-promotional rate.
How the comparison works
For the "stay" scenario, we simply run the standard payoff simulation at your current APR and monthly payment. For the "transfer" scenario, we add the transfer fee to your balance up front, then simulate payoff at the promotional APR. If your payment clears the balance before the promo period ends, that's your full transfer cost. If not, we continue the simulation at the post-promotional APR for whatever balance remains.
A worked example
Say you have a $5,000 balance at 24.99% APR, paying $300/month. Staying put, you'd pay roughly $704 in interest over about 19 months. Transferring to a card with a 3% fee and 0% APR for 15 months means paying a $150 upfront fee, but since $300/month clears the $5,150 transferred balance in about 18 months — mostly within the promo window — your total cost drops to roughly the $150 fee plus a small amount of post-promo interest, saving several hundred dollars compared to staying put.
When a balance transfer makes sense
- The bigger the gap between your current APR and the promotional APR, the more a transfer tends to save — especially on larger balances.
- Make sure your planned monthly payment can realistically clear the balance within the promotional period; if it can't, run the numbers with the post-promo APR included, as this calculator does automatically.
- Compare the transfer fee against your projected interest savings from the APR Comparison Calculator to sanity-check the math.
- If you have multiple cards, decide which one benefits most from a transfer using the Debt Avalanche Calculator first.