Balance Transfer

When is a balance transfer card actually worth it?

Learn how to judge a balance transfer offer by comparing fees, intro APR length, and the monthly payoff number required to make it work.

A credit balance moving from high APR debt to a lower-cost intro offer

A balance transfer is worth it when the fee is smaller than the interest you avoid and the payoff plan is realistic.

Start with the fee

Most transfer cards charge 3 to 5 percent. That means a $5,000 transfer may cost $150 to $250 before interest savings are even considered.

Calculate the payoff target

If the intro period is 15 months, divide the full transferred balance plus fee by 15. If that monthly number does not fit your budget, the transfer may not solve much.

Watch the failure pattern

The classic mistake is moving the balance, then continuing to spend on the old card. That creates two problems instead of one.

Bottom line

A balance transfer card is useful only when the math works and the spending behavior changes with it.