1. What is the Balance Transfer Interest Calculation?

The balance transfer interest calculation helps you understand how much interest you'll pay after a promotional period ends on a credit card balance transfer. It accounts for both the transferred amount and any transfer fees.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( P \) — Transferred balance (currency unit)
• \( F \) — Transfer fee (currency unit, e.g., 3% of P)
• \( R \) — Monthly interest rate (APR / 12, as a decimal)
• \( I \) — Monthly interest (currency unit)

Explanation: The equation calculates the monthly interest you'll pay after any promotional period ends, including both your transferred balance and any transfer fees.

3. Importance of Interest Calculation

Details: Understanding potential interest costs helps evaluate whether a balance transfer offer is beneficial and allows for better financial planning.

4. Using the Calculator

Tips: Enter your transferred balance, the transfer fee percentage (typically 3-5%), and the APR that will apply after the promotional period. All values must be valid (positive numbers).

5. Frequently Asked Questions (FAQ)

Q1: When does this interest calculation apply?
A: This calculation applies after any promotional 0% APR period ends on your balance transfer offer.

Q2: Are transfer fees always charged?
A: Most balance transfers charge a fee (typically 3-5% of the amount transferred), but some offers may have no fee.

Q3: How can I avoid paying interest?
A: Pay off the entire transferred balance before the promotional period ends to avoid interest charges.

Q4: Does this include minimum payments?
A: No, this calculates only the interest portion. Your actual payment would be this interest plus any principal payment.

Q5: What if I make additional purchases?
A: This calculator only considers the transferred balance. Purchases may have different APRs and payment allocation rules.