Of course, the “Average Household” is a statistic.  Every household is different, and the amount you owe and the rates you pay are likely to vary significantly from the averages.  One tool available to estimate interest expense over the course of a year is the balance transfer calculator at Smart Balance Transfers.  This tool provides an estimate of how much a person will spend on interest at current rates vs. how much they would save by utilizing a 0% balance transfer for 12 months.

Using this balance transfer calculator, the “Average Household” could realize more than $1000 in interest savings by transferring their debt to a credit card with a 0% rate for 12 months.  Once balance transfer fees are taken into consideration, the total savings decline to around $700.  However, the benefits of doing a balance transfer go beyond one year.  Without compounding interest expenses, payments towards debt reduce the principle at a much faster rate, thus leaving you with less debt at year end, even if you make the same monthly payments.

Ultimately, consumers with good credit could easily pay $0 in credit card interest in 2010 if they were to make smart use of balance transfer credit cards.  Unfortunately, the lack of offers being sent out in the mail has caused many Americans to forget that 0% rates are still an option.  This is not the case.  0% deals, while nowhere near as generous as they were in the past, are still readily available.  Thus, anyone with good credit who shudders at the thought of spending $1000-$15000 in interest this year should look to available balance transfer offers as a means to reduce interest expense and expedite the process of getting out of credit card debt.

-Jeffrey Weber

At Smart Balance Transfers, we have a balance transfer calculator that can be used to help estimate how much a person can save with a 0% balance transfer. In general, it is safe to assume that for every $1000 a person carries in credit card debt, they will pay an average of $120 in interest. This number is based on an average interest rate of 14%. With some reports claiming the average household has close to $8000 in credit card debt, a 0% balance transfer can save over $1000 a year in interest charges by taking advantage of a 0% balance transfer.

The amount of savings one can reap with a credit card that offers a 0% interest rate on purchases as well as balance transfers is somewhat tougher to determine. The primary reason this is a tough calculation is the fact that when you spend money on a 0% APR credit card plays a big roll in figuring your savings. For example, if you spend $1000 on a new 0% credit card in the first month, you’ll save about $120 on that spend over the course of a year. However, if you spend $1000 in the sixth month you have your card, you’re savings will be less than $50.

A good way to maximize your savings with a 0% interest rate is to get a new card right before you are about to spend a significant amount of money, such as before the holidays or to pay for a vacation. Say, for example, you intend to spend $2000 on holiday gifts in a month. Over the course of a year, having a 0% interest rate will save you close to $300.

Smart Balance Transfers lists all current 0% APR credit card offers on our main site. For more information, see www.SmartBalanceTransfers.com.