Is a balance transfer worth the fee?
It usually is if the promo is long enough and you can pay steadily. In the example, staying on your card costs $2,455 in interest and takes 2 yrs 3 mos. Transferring costs $281 in interest and fee and takes 1 yr 9 mos. The comparison uses the same $400 payment both ways, so the only things changing are the rate and the fee.
The $240 fee is recovered quickly here. At 24.99%, $8,000 charges about $167 a month in interest, so 2 months at 0% would already cover it.
| Promo length | 0% fee | 3% fee | 4% fee | 5% fee |
|---|---|---|---|---|
| 6 months | $1,365 | $1,020 | $904 | $787 |
| 12 months | $2,118 | $1,824 | $1,726 | $1,627 |
| 15 months | $2,320 | $2,049 | $1,956 | $1,864 |
| 18 months | $2,429 | $2,174 | $2,089 | $2,003 |
| 21 months | $2,455 | $2,215 | $2,135 | $2,055 |
How to calculate a balance transfer fee
Multiply the amount you move by the fee rate. A 5% fee on $8,000 is $400. The Consumer Financial Protection Bureau (CFPB) says the fee is typically a percentage of the amount or a flat amount, whichever is larger, so check both in your offer.
Fee = amount transferred × fee rate. New balance = amount transferred + fee.This calculator adds the fee to your balance, since that's where it lands on the new card. That matters at 0%: you repay the fee too, so your promo payment has to cover more than the debt you moved.
| Amount moved | 3% fee | 4% fee | 5% fee |
|---|---|---|---|
| $2,000 | $60 | $80 | $100 |
| $5,000 | $150 | $200 | $250 |
| $8,000 | $240 | $320 | $400 |
| $10,000 | $300 | $400 | $500 |
| $15,000 | $450 | $600 | $750 |
| $20,000 | $600 | $800 | $1,000 |
What monthly payment clears it before the promo ends?
Divide the balance plus the fee by the promo months. In the example, $8,240 over 18 months is $457.78 a month. Round up, or you'll have a small balance left when the higher rate starts. Set up the payment for the full amount, since your card's minimum alone may be well below it.
| Amount moved | 12 months | 15 months | 18 months | 21 months |
|---|---|---|---|---|
| $2,000 | $171.67 | $137.34 | $114.45 | $98.10 |
| $5,000 | $429.17 | $343.34 | $286.12 | $245.24 |
| $8,000 | $686.67 | $549.34 | $457.78 | $392.39 |
| $10,000 | $858.34 | $686.67 | $572.23 | $490.48 |
| $15,000 | $1,287.50 | $1,030.00 | $858.34 | $735.72 |
| $20,000 | $1,716.67 | $1,373.34 | $1,144.45 | $980.96 |
What happens if you don’t pay it off in time?
Whatever is left starts charging the APR after the promo, on that remaining balance. At $400 a month, you'd still owe $1,040 when the promo ends, and that adds about $22 of interest in the first month after. The transfer can still save money overall. It just saves less than the headline 0% suggests.
| Monthly payment | Left when the promo ends | Time to clear | Interest and fee |
|---|---|---|---|
| $250 | $3,740 | 3 yrs 1 mo | $1,028 |
| $300 | $2,840 | 2 yrs 5 mos | $597 |
| $350 | $1,940 | 2 yrs | $383 |
| $400 | $1,040 | 1 yr 9 mos | $281 |
| $450 | $140 | 1 yr 7 mos | $243 |
| $500 | $0 | 1 yr 5 mos | $240 |
A short promo and a low payment are the bad mix. With $200 a month and a 6-month promo, you'd pay $6,015 in interest and fee, against $2,004 with the 18-month offer at the same payment.
Balance transfer rules that can cost you money
A few federal rules and warnings shape what happens after you move the balance.
- New purchases on the same card. The CFPB says you won’t get a grace period for them, so they can start charging interest right away. Spending on a different card keeps new purchases off the transfer.
- Late payments. The CFPB says your issuer can raise the rate on all balances, including the transfer, if you are more than 60 days late.
- How long a promo must last. Regulation Z’s rule for temporary rates covers periods of six months or longer, and the issuer must tell you the length and the later rate first.
- Where your payment goes. If a card has balances at different rates, Regulation Z sends any amount above the minimum to the highest rate first. It doesn’t say the same about the minimum itself, so read your agreement.
Can you do a balance transfer on a balance transfer? Your new issuer's offer terms decide that, so check before you count on it. The cost is easy to figure, though. Moving the $1,040 left in the example at another 3% fee costs $31, against about $22 a month at 24.99%.
When this answer can mislead you
The savings assume you get the full amount approved. Your new limit may be lower than your balance plus the fee, and anything left behind keeps charging the old rate. The result also assumes no new purchases, no missed payments, and one steady payment. It figures interest monthly, while card issuers figure it daily, so a statement can differ by a little. Our credit card interest calculator shows the daily method.
A transfer moves debt without paying it, so the payment is what clears it. If several debts are involved, compare a single loan with our debt consolidation calculator, or see a payoff order in the avalanche and snowball guide. If the payments are out of reach, a reputable nonprofit credit counselor can review your options, and the Federal Trade Commission explains how to pick one.
Common questions
Does a 0% balance transfer really cost nothing?
No. The rate is 0%, but the fee is real money. In the example, 3% of $8,000 is $240, and you repay it along with the balance.
Is the fee added to my balance?
That is how this calculator treats it, and it is what your payment has to cover. Your offer and your first statement will show how your issuer posts it.
Should I keep paying the minimum during the promo?
You must pay at least the minimum, but it may not clear the balance in time. Use the payment that reaches zero instead, which is $457.78 a month in the example.
Can the promo rate end early?
Yes, it can. The CFPB says being more than 60 days late on a payment can raise the rate on all balances, including the transfer.
Can I use this for more than one card?
Add the balances together if they would all move to one new card at one fee, and use a blended rate for your current APR. For several debts with different payments, the debt consolidation calculator lists each one. To see one card with minimum payments, use the credit card payoff calculator.
Sources
- What do I need to know about consolidating my credit card debt? · Consumer Financial Protection Bureau
- What is a grace period for a credit card? · Consumer Financial Protection Bureau
- 12 CFR 1026.55: Limitations on increasing rates, fees, and charges · Consumer Financial Protection Bureau
- 12 CFR 1026.53: Allocation of payments · Consumer Financial Protection Bureau
- How to get out of debt · Federal Trade Commission