1. What is Balance Transfer Savings?

Balance transfer savings represent the net benefit you gain from transferring a credit card balance to a new card with a lower interest rate, after accounting for any transfer fees.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• \( Interest\ Saved \) — The interest you would have paid on your current card
• \( Fee \) — The balance transfer fee charged by the new card

Explanation: This calculation helps determine whether a balance transfer makes financial sense after considering the transfer fee.

3. Importance of Calculating Transfer Savings

Details: Calculating potential savings helps you make informed decisions about balance transfers and avoid paying unnecessary fees when the savings might be minimal.

4. Using the Calculator

Tips: Enter the total interest you would pay on your current card and the balance transfer fee. Both values must be in USD and non-negative.

5. Frequently Asked Questions (FAQ)

Q1: What's a good savings amount to make a transfer worthwhile?
A: Generally, you want savings of at least $100-200 to justify the effort and potential credit score impact.

Q2: How do I calculate the interest I would pay?
A: Multiply your balance by your current APR (annual percentage rate) and divide by 12 for monthly interest.

Q3: Are there other factors to consider beyond savings?
A: Yes, consider the promotional period length, regular APR after promotion, and your ability to pay off the balance.

Q4: What's a typical balance transfer fee?
A: Most cards charge 3-5% of the transferred amount, often with a minimum fee of $5-$10.

Q5: Can I transfer balances between cards from the same issuer?
A: Typically no, most issuers don't allow transfers between their own cards.