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Balance Transfer Calculator

Now it’s even easier to see how much you could save by switching to a balance transfer credit card. Simply use the handy calculator we’ve built below to see how much you could save.

07 October 2022Lloyd Smith 6 min read
Calculator and a note page on a desk
Photo by Mediamodifier on Unsplash

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We’ve built this handy calculator to show you how much money you could save by swapping to a balance transfer card.

Enter the following details into the calculator to see your savings in seconds:

  • Your current credit card balance (or the amount you’d like to transfer)
  • Your current credit card’s interest rate
  • The 0% balance transfer card offer length (in months)
  • The transfer fee % (if applicable)

The calculator works by assuming you make even payments of the balance to $0 across the balance transfer term. The total amount payable is then compared to your existing card to calculate your savings.

Ready to make some savings? See your 0% balance transfer cards now.

Balance transfer refers to transferring the debt due on your existing credit cards to a new credit card.

Having multiple credit cards means managing multiple repayments that attract different interest rates and are payable on different due dates. This can make debt repayments a nightmare. But when you opt for a balance transfer, you get the option to make simplified and singular credit card repayments, often at a lower interest rate.

Balance transfer credit cards are a financial product that allows holders to consolidate outstanding debts on multiple credit cards and transfer them to a single credit card.

These cards make it easier to manage debts since you are no longer responsible for managing multiple cards. Moreover, you also avoid multiple annual fees and late fees payable for each card -- instead, you pay them only for a single balance transfer credit card and save on money.

Another benefit of a balance transfer credit card is savings on interest payments, especially if your existing cards charge a higher interest. Transferring the dues to a balance transfer card credit card can help you pay them off at significantly low interest rates, which can be as low as zero percent.

Such a rate applies during the promotional period, which is usually between six to 21 months. If you don’t pay off the entire or majority of your debt during the promotional period, the card company charges a regular interest rate on the card. Often, such interest rates are higher compared to what you paid for individual cards prior to the transfer.

Before selecting a balance transfer credit card, you need to carry out a balance transfer compare to know whether opting for a balance transfer is the right choice for you. Similar to credit card calculators that help you choose the best credit card suited to your needs, there are balance transfer calculators. The goal of a credit card balance transfer calculator is to help you compare different offers and choose the right card.

1 - Enter your current card details

You will have to enter the following information:

  • Amount of debt you want to transfer
  • Current interest rate charged
  • Your monthly repayment instalment

2 - Enter the details of the new card you are considering

Next, the credit card balance transfer calculator will prompt you to enter the details of the balance transfer card you want to compare. You will need to provide the following details:

  • The introductory interest rate
  • The interest rate you will be charged after the promotional period is over
  • The repayment instalment you plan to pay
  • Other costs like balance transfer fees and annual fees (if any)

Once you enter all the information, click on the ‘calculate’ button.

If you are comparing multiple balance transfer cards, you will need to repeat steps 1 and 2 for each card separately.

3 - Understanding the results

A credit card balance transfer compare tells you how much you will potentially save by choosing to transfer your debt to the shortlisted balance transfer card.

In other words, you will know whether it is cheaper to continue paying debts on your current card or pay off the entire debt during the promotional period by opting for a balance transfer card.

Given that multiple balance transfer options exist in the market, determining the best one cannot be solely done through guesswork. A balance transfer calculator helps compare different offers and weigh your options. You can find out how much you can potentially save by transferring your debt to a balance transfer card.

At the same time, keep in mind that the terms of your balance transfer may not exactly mirror the estimates shown by the calculator. For example, the estimated repayment amount during the promotional period may vary from the actual amount you have to pay in case you default on any payments.

So use the calculator to know your best option but also account for some changes once you get approved.

To apply for a balance transfer credit card in Australia, you should be:

  • At least 18 years old,
  • Be an Australian citizen or hold proof of permanent residency; and
  • Have a source of income

The exact eligibility requirements may vary depending on the credit card company you choose. You can use a balance credit card eligibility calculator in Australia to browse through different options available to find cards suitable for you. Also, check your credit score as some card issuers use it as an eligibility criterion.

Applying for a balance transfer card is similar to applying for a credit card. You need to fill up an online or physical application form to provide basic information about yourself and indicate the total amount of debt you want to transfer. The success of your application depends on several factors, including your credit history and the amount of outstanding debt.

Some credit card issuers may charge a balance transfer fee for facilitating the balance transfer to a new card. Usually, it is expressed as a percentage of the total debt transferred and added to the debt transferred to your balance transfer card.

The transfer fee reflects the true cost of carrying out a balance transfer. It is important to consider it when comparing balance transfer offers so you can decide whether to proceed further. Say, for instance, you want to transfer $50,000 to a balance transfer credit card. The credit card company issuing the card charges a 3% balance transfer fee. In that case, you will need to pay a balance transfer fee of $1500. Usually, the fee is added to the total balance transferred. In this case, the outstanding balance of your balance transfer credit card becomes $51,500.

Using a balance transfer fee calculator makes it all the more easier to calculate the fees.

The best way to know whether your balance transfer is worth it is by comparing the money you will potentially save on interest with any balance transfer fee that you may be charged.

You can use a credit card payment calculator to check how much time it will take to repay the debt at its current interest rate. If the interest charged is more than the balance transfer fee and you are confident that you will be able to pay off the outstanding during the promotional period, then the transfer is worth considering.

You can then use a minimum payment calculator to check how much you would need to pay monthly to ensure that the entire debt is paid off during the introductory period.

Plus, if you have a strong credit score and can negotiate a zero balance transfer fee, the balance transfer can benefit you even more.

Usually, a balance transfer fee between 3% and 5% is considered a standard in the market.

The ideal balance transfer percentage is one that is lower than the interest due on your credit card debt. If you find that you are merely replacing the high interest with a high balance transfer percentage, then it is not the right option to pick.

When you transfer debt due on credit cards that charge a very high-interest rate to a balance transfer credit card offering a promotional interest rate, there’s potential to save money. How much you can save depends on the type of card you receive and the amount of debt transferred.

Suppose the outstanding debt on your credit card is $6,000, and you are charged a 10% interest rate. You pay monthly instalments of $300 and $1260 as interest for two years to repay the debt. If you get a zero-interest balance transfer card, you can pay off the debt during the promotional period without paying any interest at all and save the entire amount.

Rushing into transferring your balances without undertaking a credit card balance transfer compare may not give you the expected results. Make sure to use a credit card balance transfer calculator to compare various available options and choose one.

Additionally, consider your payment instalments as per a credit card repayment calculator and compare them with instalments payable on your balance transfer card to know whether it is practically possible for you to pay such amounts.

Lloyd Smith Image

Written by Lloyd Smith

General Manager AU

Lloyd spreads the word about how awesome ClearScore is.