In order to estimate how much people can save with a 0% APR balance transfer that lasts for 18 months, I used excel loan amortization schedules. I find these schedules to be very useful in not only determining how much can be saved with balance transfers, but also to develop credit card payment plans. Below are examples of how much can be saved with an 18 month 0 balance transfer assuming a monthly payment of $150. Click on any image to view the full size chart. Full sized images open in a new window.
Example 1: In the next two images, you can compare loan amortization schedules that illustrate how much money can be saved by a person who transfers $5,000 from a credit card with a 12% interest rate to a card that offers a 0% APR on balance transfers for 18 months assuming a monthly payment of $150.
Status of credit card debt at a 12% interest rate after 18 months without a balance transfer
Status of credit card debt after 18 months with a 0% balance transfer
Example 2: In the following images, you can compare loan amortization schedules illustrating how much can be saved by transferring balances from a card with a 15% interest rate to a balance transfer credit card with a 0% rate for 18 months.
Status of credit card debt at a 15% interest rate after 18 months without a balance transfer
Status of credit card debt after 18 months with a 0% balance transfer
Example 3: Lastly, here is a breakdown of how much can be saved by transferring $5,000 of credit card debt from a card with a 20% interest rate to one with a 0% rate for 18 months.
Status of credit card debt at a 20% interest rate after 18 months without a balance transfer
Status of credit card debt after 18 months with a 0% balance transfer
As you can see, balance transfers do a lot more than help people save money on interest. They also help reduce credit card debt substantially faster than can be done when paying a standard variable interest rate.
For more information on balance transfers and to compare offers, please see the 0% APR balance transfer section of SmartBalanceTransfers.com.