How Much Can You Save With A 0% Balance Transfer for 12 Months

A 0% balance transfer for 12 months enables a card holder to borrow money for 1 year at no interest. Like most balance transfer offers, the money must be used to pay down another debt, typically a high interest credit card balance. While in the past longer balance transfers were available (e.g., 15 months), today the 12-month transfer offer is the longest available.

These 12-month deals all come with a required balance transfer transaction fee typically ranging from 3% to 5% of the amount transferred. Still, at 0% these transactions fees result in one of the lowest cost of borrowing available. But the real question is, how much can you save with a zero percent transfer that lasts for 1 year?

To answer that question, let’s assume a 3% transaction fee on the balance transfer. Let’s also assume you are transferring a high interest rate credit card balance of $5,000 to $20,000. Depending on your current interest rate, and using simple interest to make the calculations a bit easier, here is roughly what you can expect to save:

For each of the above calculations, we’ve taken the interest one would have paid on the high interest card over a 12-month period, and subtracted the balance transfer fee. For example, on a $5,000 balance at 10%, we’ve taken the interest one would have paid ($5,000 x 10% = $500) over a 1 year period and subtracted a 3% transfer fee ($5,000 x 3% = $150) to arrive at the $350 savings.

So where do you find 12-month balance transfer deals? While they are not as plentiful as they once were, they are still out there if you know where to look. For example, the Discover More Card–American Flag edition, offers a 1 year balance transfer offer. You can also find some 12 month 0% APR deals on balance transfers and purchases from several Chase credit cards.