Key Takeaway
Credit card balance transfers move high-interest debt (36–42%) to a new card offering 0–12% introductory rates for 3–6 months. This can save thousands in interest if the balance is cleared during the promotional period.
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
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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.).
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