1. What is Balance Transfer Interest?

Balance transfer interest is the amount you'll pay each month after any introductory 0% APR period ends. It's calculated based on your remaining balance and the card's standard interest rate.

2. How Does the Calculator Work?

The calculator uses the simple interest formula:

Where:

• \( I \) — Monthly interest (currency unit)
• \( P \) — Transferred balance (currency unit)
• \( R \) — Monthly interest rate (annual rate / 12, as decimal)

Explanation: The formula calculates how much interest you'll pay each month on your remaining balance after any promotional period ends.

3. Importance of Calculating Interest

Details: Understanding your potential interest payments helps evaluate whether a balance transfer makes financial sense and plan your repayment strategy.

4. Using the Calculator

Tips: Enter your total transferred balance and the card's annual percentage rate (APR) that will apply after any introductory period. The calculator will show your estimated monthly interest payment.

5. Frequently Asked Questions (FAQ)

Q1: Does this include the 0% introductory period?
A: No, this calculates interest after any 0% promotional period ends.

Q2: How can I avoid paying interest?
A: Pay off the entire transferred balance during the 0% introductory period.

Q3: Is interest compounded daily?
A: Most cards compound interest daily, but this calculator shows the approximate monthly interest.

Q4: What if I make monthly payments?
A: Your actual interest will decrease as your balance decreases with each payment.

Q5: Are there fees for balance transfers?
A: Most cards charge 3-5% of the transferred amount as a one-time fee, which isn't included in this calculation.