Credit Card Balance Transfer

Balance Transfer Formulas:

\[ T = \frac{P + F}{D} \text{ (during 0% period)} \] \[ T = \frac{\log\left(\frac{P + F}{(P + F) - D \times R}\right)}{\log(1 + R)} \text{ (post-promotional)} \]

Transferred Balance (P):

Transfer Fee (% of P):

Monthly Payment (D):

APR (post-promotional):

0% Promotional Period:

months

Time to Pay Off:

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1. What is Credit Card Balance Transfer?

A credit card balance transfer involves moving debt from one credit card to another, typically to take advantage of a lower interest rate (often 0%) during a promotional period. This calculator helps estimate how long it will take to pay off the transferred balance.

2. How Does the Calculator Work?

The calculator uses two formulas:

\[ T = \frac{P + F}{D} \text{ (during 0% period)} \] \[ T = \frac{\log\left(\frac{P + F}{(P + F) - D \times R}\right)}{\log(1 + R)} \text{ (post-promotional)} \]

Where:

$ P $ — Transferred balance
$ F $ — Transfer fee (e.g., 3% of P)
$ D $ — Monthly payment
$ R $ — Monthly interest rate (APR / 12)
$ T $ — Time in months

Explanation: The first formula calculates payoff time during the 0% period. The second formula calculates payoff time after the promotional period ends, accounting for compound interest.

3. Understanding the Results

Details: The result shows total time to pay off the balance including both the promotional period and any time needed after the promotional rate expires. If you can pay off the entire balance during the promotional period, you'll avoid interest charges.

4. Using the Calculator

Tips: Enter the amount you're transferring, the transfer fee percentage, your planned monthly payment, the APR after the promotional period ends, and the length of the 0% promotional period. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Are balance transfers always a good idea?
A: They can be helpful if you can pay off the balance during the promotional period, but watch out for transfer fees and higher APRs after the promotion ends.

Q2: How is the transfer fee calculated?
A: Typically a percentage (often 3-5%) of the transferred amount, with a minimum fee (e.g., $5 or $10).

Q3: What happens if I don't pay off during the promotional period?
A: Interest will be charged on the remaining balance at the regular APR, which could be higher than your original card's rate.

Q4: Can I make additional payments?
A: Yes, making larger payments than the minimum will help you pay off the balance faster and save on interest.

Q5: Does this calculator account for minimum payments?
A: No, it assumes you'll make consistent payments of the amount you specify each month.