How balance transfers actually work
A balance transfer moves debt from one credit card to another, typically to a card offering a 0% introductory APR for a set period, usually 12 to 21 months. During that intro window, no interest accrues on the transferred balance, so 100% of each payment reduces principal.
The catch is the transfer fee, usually 3–5% of the amount transferred, added to your new balance on day one. This means the transfer is only worth it if the interest you'd save at the current APR is greater than that upfront fee.
The math this calculator runs
For each scenario, it simulates month by month what happens to your balance with your stated monthly payment:
- Stay: Balance accrues interest at your current APR each month. Payment covers interest first, then reduces principal. Loop until paid off.
- Transfer: Balance grows by the transfer fee up front. During the intro window, 100% of every payment reduces principal (0% APR). If balance is still positive when the intro ends, interest starts accruing at the new card's regular APR.
The verdict compares the total cost under each option: interest plus transfer fee.
When a transfer clearly wins
Balance transfers pay off best when: (a) your current APR is high (20%+), (b) the transfer fee is modest (3% or lower), (c) the intro period is long enough that your normal monthly payment can clear most or all of the balance, and (d) you're disciplined enough not to add new charges to either card during the transfer window.
When a transfer is a trap
The classic mistake is transferring, feeling relief, and continuing to spend on the original card. Now you have two balances instead of one. Another common trap: taking a 21-month intro offer with a 5% fee, then only paying minimums, so you enter month 22 with most of the balance still there, now compounding at 20%+ APR. If you can't realistically clear the balance during the intro, the fee often costs more than staying put.
What to look for in a good offer
- Intro APR of 0% (not just "low", actually zero) for at least 15 months
- Transfer fee of 3% or less. Some cards charge 4–5%; occasionally you'll find no-fee transfer offers, which are the gold standard.
- No annual fee on the new card, at least for the first year
- Regular APR that's at or below your current card's, in case you don't fully pay off
Frequently asked questions
Does opening a new card hurt my credit score?
A new credit card application triggers a hard inquiry, which typically drops your score by 3–5 points for a few months. However, the new card increases your total available credit, which usually improves your credit utilization ratio. Often the net effect on your score is positive within 3–6 months, especially if you don't close the old card.
Should I close my old card after transferring?
Generally no. Keeping the old card open (with a zero balance) preserves your total available credit and keeps your credit history length intact. Closing it can hurt your utilization ratio and shorten your average account age. The exception: if the old card charges an annual fee, closing may make sense.
What if I miss a payment during the intro period?
Most cards' terms specify that missing a payment can immediately end the 0% intro APR, meaning you'd be back to the regular APR, sometimes retroactively. This is why setting up autopay for at least the minimum is critical during a balance transfer.
Can I transfer multiple cards to one new card?
Yes, subject to the new card's credit limit. Add up all your current balances and use that as the "Current Balance" in the calculator. The transfer fee will apply to the total. Note that most cards have a maximum transfer amount, often around $15,000.
What's a "hard cutoff" vs. "deferred interest" transfer offer?
Most modern balance transfer cards use a hard cutoff: after the intro period, only the remaining balance is subject to the new APR going forward. A few older offers (mostly on store cards) use "deferred interest," where if you don't pay off in full during the intro period, all the interest that would have accrued gets added retroactively. Read the terms carefully; avoid deferred-interest offers if possible.
Is any of my data stored?
No. Everything runs in your browser. Nothing is sent to a server or saved.