Transferring a balance from a high interest credit card to a new card with a low introductory interest rate can reduce your interest charges and help you get out of debt faster.

Sounds good, right? A balance transfer can be a great tool for paying down debt. But how are the potential savings of a balance transfer calculated? Here are the factors that typically go into your balance transfer calculation:

  • The amount you want to transfer
  • Your current card’s annual percentage rate (APR)
  • Your new credit card’s introductory APR
  • The number of months the introductory interest rate will apply
  • Your new card’s standard APR
  • The balance transfer fee

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Other Factors to Consider:

  • The goal of a balance transfer is to pay off existing debt and not add to it. However, in case of emergencies, it’s important to know what the standard purchase APR is because it may be different from the introductory APR.
  • If you make one late payment on your new card you could lose your 0% APR and it may trigger the penalty APR, which is typically a higher APR than the standard APR and applied to existing and future balances.
  • If you are transferring a balance to an existing card and you usually pay for purchases in full each month to avoid interest, transferring a balance will change that. You will be charged interest on purchases unless you choose to pay your entire balance in full, including any transferred balances, by the first payment due date.

To determine the value of a balance transfer offer, you need to pay close attention to the fine print. The savings you could achieve by making a balance transfer vary depending on your personal financial situation. To ensure you will be getting the best deal, take some time to carefully compare offers.

Published February 13, 2015.

Updated March 5, 2020.

Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.

  1. Information and interactive calculators are made available as self-help tools for your independent use and are intended for educational purposes only.
  2. Savings calculations assume interest accrues on transferred balance during and after the promo duration. The initial calculations assume the national average APR of 16.92% as of 10/01/18 according to
  3. For comparison purposes, we applied a fixed monthly payment calculation to the balance you entered until the balance is paid off.
  4. Assumes interest accrues over the duration of the intro period on the balances and APRs you provided and the offer details above.
  5. Assumes fixed monthly payments are made at the end of the billing period.
  6. Assumes no other existing balances or new transactions are made to the account.
  7. Assumes the daily balance method (including new transactions) is used.
  8. Your savings will vary.