Balance Transfer Credit Card Savings Calculator
Use this calculator to estimate how much you could save by transferring your high-interest credit card balance to a new card with a lower, introductory APR.
Understanding Balance Transfers and How to Use This Calculator
A balance transfer credit card allows you to move debt from one or more high-interest credit cards to a new card, often with a lower or 0% introductory Annual Percentage Rate (APR) for a set period. This can be a powerful tool to save money on interest and pay down your debt faster.
How Balance Transfers Work
When you perform a balance transfer, your new credit card issuer pays off the balance on your old card(s). You then owe the new card issuer, but at their promotional APR. This introductory period can last anywhere from 6 to 24 months, during which you pay little to no interest on the transferred amount. After the introductory period, the APR typically reverts to a higher, standard rate.
Most balance transfer cards charge a one-time balance transfer fee, usually a percentage of the amount transferred (e.g., 3-5%). This fee is added to your new card balance.
Benefits of a Balance Transfer
- Save on Interest: The primary benefit is reducing or eliminating interest payments during the introductory period, allowing more of your payment to go towards the principal.
- Faster Debt Payoff: With less interest accruing, you can pay off your debt more quickly, especially if you maintain or increase your monthly payments.
- Consolidate Debt: You can combine multiple credit card balances into one, simplifying your payments and potentially lowering your overall interest costs.
Things to Consider
- Balance Transfer Fee: Don't forget to factor in this one-time cost, as it adds to your total debt.
- Introductory Period: Make a plan to pay off as much of the transferred balance as possible before the promotional APR expires.
- Post-Introductory APR: Be aware of what the interest rate will be after the introductory period. If you can't pay off the balance in time, this rate will apply to the remaining amount.
- New Purchases: Some balance transfer cards apply the higher standard APR to new purchases immediately, even during the introductory period for transfers. Avoid making new purchases on the card if this is the case.
- Credit Score Impact: Applying for a new card can temporarily ding your credit score, but successfully paying off debt can improve it in the long run.
How to Use This Calculator
- Current Credit Card Balance: Enter the total amount you owe on your existing high-interest credit card(s).
- Current Credit Card APR: Input the annual percentage rate of your current card(s).
- New Card Introductory APR: Enter the promotional APR offered by the balance transfer card (often 0%).
- Introductory Period Duration: Specify how many months the introductory APR will last.
- New Card Post-Introductory APR: Enter the standard APR that will apply after the introductory period ends.
- Balance Transfer Fee: Input the percentage fee charged for the transfer (e.g., 3 for 3%).
- Desired Monthly Payment: Enter the amount you plan to pay each month towards your debt.
The calculator will then show you a comparison of total interest paid and payoff time with and without a balance transfer, highlighting your potential savings.
Maximizing Your Savings
To get the most out of a balance transfer, aim to pay off the entire transferred balance before the introductory APR expires. If you can't, try to pay down as much as possible to minimize the interest that accrues at the higher post-introductory rate. Always make your payments on time to avoid losing your promotional rate or incurring late fees.
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function calculatePayoffDetails(principal, monthlyPayment, annualRate, maxMonths) {
var monthlyRate = annualRate / 12 / 100;
var totalInterest = 0;
var months = 0;
var currentPrincipal = principal;
maxMonths = maxMonths || 600; // Default to 50 years
if (currentPrincipal <= 0) {
return { totalInterest: 0, months: 0, status: "Balance already paid." };
}
// Check if payment is too low to ever cover interest
if (monthlyPayment 0 && months 0) {
return { totalInterest: Infinity, months: Infinity, status: "Could not pay off within " + maxMonths + " months." };
} else {
return { totalInterest: totalInterest, months: months, status: "Paid off." };
}
}
function calculateBalanceTransfer() {
var currentBalance = parseFloat(document.getElementById('currentBalance').value);
var currentApr = parseFloat(document.getElementById('currentApr').value);
var newCardIntroApr = parseFloat(document.getElementById('newCardIntroApr').value);
var introPeriodMonths = parseInt(document.getElementById('introPeriodMonths').value);
var postIntroApr = parseFloat(document.getElementById('postIntroApr').value);
var btFeeRate = parseFloat(document.getElementById('btFeeRate').value);
var desiredMonthlyPayment = parseFloat(document.getElementById('desiredMonthlyPayment').value);
var resultDiv = document.getElementById('result');
var outputHTML = ";
// Input validation
if (isNaN(currentBalance) || currentBalance < 0 ||
isNaN(currentApr) || currentApr < 0 ||
isNaN(newCardIntroApr) || newCardIntroApr < 0 ||
isNaN(introPeriodMonths) || introPeriodMonths < 0 ||
isNaN(postIntroApr) || postIntroApr < 0 ||
isNaN(btFeeRate) || btFeeRate < 0 ||
isNaN(desiredMonthlyPayment) || desiredMonthlyPayment <= 0) {
resultDiv.innerHTML = 'Please enter valid positive numbers for all fields. Monthly payment must be greater than zero.';
return;
}
// — Scenario 1: No Balance Transfer —
var oldCardDetails = calculatePayoffDetails(currentBalance, desiredMonthlyPayment, currentApr);
outputHTML += '
Scenario 1: No Balance Transfer
';
outputHTML += 'With your current balance of
$' + currentBalance.toFixed(2) + ' and APR of
' + currentApr.toFixed(2) + '%, paying
$' + desiredMonthlyPayment.toFixed(2) + ' per month:';
if (oldCardDetails.months === Infinity) {
outputHTML += " + oldCardDetails.status + ";
outputHTML += 'You would never pay off the balance or it would take an extremely long time (over 50 years).';
} else {
outputHTML += 'Estimated Payoff Time:
' + oldCardDetails.months + ' months';
outputHTML += 'Total Interest Paid:
$' + oldCardDetails.totalInterest.toFixed(2) + '';
outputHTML += 'Total Cost (Principal + Interest):
$' + (currentBalance + oldCardDetails.totalInterest).toFixed(2) + '';
}
// — Scenario 2: With Balance Transfer —
var btFee = currentBalance * (btFeeRate / 100);
var principalAfterFee = currentBalance + btFee;
var totalInterestNewCard = 0;
var totalMonthsNewCard = 0;
var currentRemainingBalance = principalAfterFee;
var paymentTooLowFlag = false;
// During Introductory Period
for (var i = 0; i < introPeriodMonths; i++) {
if (currentRemainingBalance <= 0) break; // Paid off early
var monthlyRate = newCardIntroApr / 12 / 100;
var interestThisMonth = currentRemainingBalance * monthlyRate;
totalInterestNewCard += interestThisMonth;
currentRemainingBalance = currentRemainingBalance + interestThisMonth – desiredMonthlyPayment;
totalMonthsNewCard++;
if (desiredMonthlyPayment 0) {
paymentTooLowFlag = true;
break; // Payment too low
}
}
// After Introductory Period (if balance remains and not already flagged as too low)
if (currentRemainingBalance > 0 && !paymentTooLowFlag) {
// Use a max loop to prevent infinite loops if payment is too low post-intro
var maxPostIntroMonths = 600 – introPeriodMonths; // Total max 600 months
for (var j = 0; j < maxPostIntroMonths; j++) {
if (currentRemainingBalance <= 0) break;
var monthlyRate = postIntroApr / 12 / 100;
var interestThisMonth = currentRemainingBalance * monthlyRate;
totalInterestNewCard += interestThisMonth;
currentRemainingBalance = currentRemainingBalance + interestThisMonth – desiredMonthlyPayment;
totalMonthsNewCard++;
if (desiredMonthlyPayment 0) {
paymentTooLowFlag = true;
break; // Payment too low
}
}
if (currentRemainingBalance > 0 && !paymentTooLowFlag) {
paymentTooLowFlag = true; // Could not pay off within max months
}
}
outputHTML += '
Scenario 2: With Balance Transfer
';
outputHTML += 'Transferring
$' + currentBalance.toFixed(2) + ' to a new card with a
' + newCardIntroApr.toFixed(2) + '% intro APR for
' + introPeriodMonths + ' months, then
' + postIntroApr.toFixed(2) + '%, and a
' + btFeeRate.toFixed(2) + '% balance transfer fee, paying
$' + desiredMonthlyPayment.toFixed(2) + ' per month:';
outputHTML += 'Balance Transfer Fee:
$' + btFee.toFixed(2) + '';
if (paymentTooLowFlag) {
outputHTML += 'Your desired monthly payment is too low to pay off the balance with the balance transfer, or it would take an extremely long time (over 50 years).';
} else {
outputHTML += 'Estimated Payoff Time:
' + totalMonthsNewCard + ' months';
outputHTML += 'Total Interest Paid (on new card):
$' + totalInterestNewCard.toFixed(2) + '';
outputHTML += 'Total Cost (Principal + Fee + Interest):
$' + (currentBalance + btFee + totalInterestNewCard).toFixed(2) + '';
}
// — Comparison —
outputHTML += '
Comparison & Savings
';
if (oldCardDetails.months === Infinity && paymentTooLowFlag) {
outputHTML += 'Both scenarios indicate that your desired monthly payment is too low to pay off the balance.';
} else if (oldCardDetails.months === Infinity) {
outputHTML += 'By making a balance transfer, you can potentially pay off your balance, which was not possible with your current card at your desired payment.';
outputHTML += '
Potential Savings: Significant (as old card never pays off)';
} else if (paymentTooLowFlag) {
outputHTML += 'Even with a balance transfer, your desired monthly payment is too low to pay off the balance. Consider increasing your payment.';
outputHTML += '
Potential Savings: None (as new card never pays off)';
} else {
var totalCostOldCard = currentBalance + oldCardDetails.totalInterest;
var totalCostNewCard = currentBalance + btFee + totalInterestNewCard;
var totalSavings = totalCostOldCard – totalCostNewCard;
outputHTML += 'Total Cost (No Transfer):
$' + totalCostOldCard.toFixed(2) + '';
outputHTML += 'Total Cost (With Transfer):
$' + totalCostNewCard.toFixed(2) + '';
if (totalSavings > 0) {
outputHTML += '
Potential Savings: $' + totalSavings.toFixed(2) + '';
outputHTML += 'You could pay off your balance
' + (oldCardDetails.months – totalMonthsNewCard) + ' months faster!';
} else {
outputHTML += '
Potential Savings: $' + totalSavings.toFixed(2) + ' (This indicates a loss or no savings)';
outputHTML += 'A balance transfer might not be beneficial in this scenario, or it could cost you more.';
}
}
resultDiv.innerHTML = outputHTML;
}