When a balance transfer pays off
A balance transfer card lets you move existing card debt onto a new card with 0% interest for an introductory period, commonly 12 to 21 months. The catch is a one-time fee of usually 3% to 5% of the amount transferred. If you pay off most or all of the balance during the promo, the fee is far smaller than the interest you would otherwise pay.
Moving $6,000 from a 23% card with a 3% fee costs $180 up front. Paying $300 a month, the debt is gone in about 21 months and the transfer saves around $1,400 in interest compared with staying put. Paying $343 a month clears it within the 18-month promo.
Avoiding the traps
Any balance left when the promo ends starts accruing interest at the card's regular APR, so aim to finish inside the window. Do not use the new card for purchases unless purchases also get 0%, and keep making every payment on time, since a late payment can end the promotional rate. Approval usually requires good credit.
Common questions
Is a balance transfer worth the fee?
Usually yes if you can pay off the balance during the 0% period and the rate you are leaving is high.
What is a typical balance transfer fee?
3% to 5% of the amount transferred, with a minimum of about $5.
Does a balance transfer hurt my credit?
A new application causes a small temporary dip, but lower utilization over time often helps.
This calculator gives estimates for planning. Real returns, rates and prices change, so treat the result as a guide rather than a promise. Read how we build and check our calculators.