Credit Card Balance Transfer Calculator
Balance Transfer Summary:
- Transfer fee cost (one-time fee): ₹3,000.
- Interest on current card over 6 months: ₹19,129.
- Interest on new card over promo period: ₹0.
- Net saving after transfer fees: ₹16,129.
- Remaining debt balance at month 6 (assuming ₹5,000 monthly payments):
- Current card: ₹89,129
- New balance-transfer card: ₹70,000
What to do next
Based on your Credit Card Balance Transfer Calculator, here are the tools you should try next:
Advertisement
Balance Transfer Net Benefit Formula
Calculates savings when moving high-interest card debt to another bank card offering a 0% promotional rate period.
Worked Example: Transferring ₹1 Lakh debt from 42% APR to a 0% APR card for 6 months (3% transfer fee)
Balance Transfer Cards: Moving debt to save on interest
Sneha had a ₹1 Lakh credit card balance costing her 42% APR. She was paying ₹8,000 monthly, but half of it went toward interest. She decided to transfer her balance to a new card offering a 0% promotional interest rate for 6 months.
She paid a 3% transfer processing fee (₹3,000), but paid zero interest for the next 6 months. This saved her ₹21,000 in interest. She used these interest savings to pay down the principal, reducing her balance to ₹55,000 before the promotional period ended.
Balance transfers allow you to pause high interest accumulation temporarily, directing 100% of your payments toward principal reduction during the promo window.
Ensure you pay off the bulk of the transferred balance during the promotional period. Standard high interest rates apply immediately once the promo ends.
Frequently Asked Questions
How does a credit card balance transfer work?
You request a bank to pay off the outstanding balance on your current high-interest credit card, moving the debt to a new card that offers a low or 0% APR for a promotional period (e.g., 6 months).
Is there a fee for a balance transfer?
Yes, banks usually charge a one-time balance transfer processing fee, typically ranging from 1% to 3% of the total amount transferred.
What happens after the promotional period ends?
Once the promo period (usually 3 to 12 months) expires, any remaining unpaid balance starts accruing interest at the card's standard high interest rate (usually 36-42% p.a.).
Get Smarter With Money Every Week
Join 10,000+ readers. One actionable money tip delivered free every Sunday.
Was this calculator helpful?
Advertisement