Compare clearing a card balance at its current rate with moving it to a lower promotional or average rate, after the transfer fee.
Use this calculator to test a balance transfer before you accept one. Enter the balance, the rate you pay now, the rate on the transferred balance, how long you will take to repay and the transfer fee in dollars (a fee of 3% on $5,000 is $150).
How it works. For each rate, the tool works out the level monthly payment that clears the balance in the period you choose, then shows the difference, the months needed to recover the fee and the total saving after the fee. Comparing over the same period is the honest test.
Worked example (illustrative). $5,000 at 20.99% cleared in 12 months needs about $465.54 a month. Moved to a 1.99% promotional rate with a $150 fee, the payment is about $421.17, a difference of about $44.37 a month. The fee is recovered in about 4 months and the saving over the year is about $382.
Promotions end. The tool assumes one rate for the whole period. If the promotional rate lasts 10 months and you need 18 to repay, the rest is charged at the card's regular rate; enter an average rate or read the balance transfer worked example, which tracks the switch month by month. Under the Bank Act, payments above the minimum must go to the highest-rate balance first or be split proportionally, so new purchases on the same card can be expensive. Rates are illustrative.
Worked Examples and Checklists
A month-by-month balance transfer example with a 3% fee, a 10-month promotional rate and the switch back to the regular rate, plus the payment allocation rules and traps to avoid.
