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A balance transfer is a type of credit card transaction in which debt is moved from one credit card account to another, usually one with a 0% introductory APR offer on balance transfers. A balance transfer fee, in its turn, is the fee you should pay for transferring a credit card debt onto a new credit card. It's usually around 3% to 5% of the total amount transferred. The fee is charged by the bank that issues the card you transfer your debt to. If you perform several balance transfers, you will be charged a balance transfer fee for each transfer.

For example, you have a $3,000 balance on a credit card with an 18% APR. You would incur $372.22 in interest charges if you paid that off with 15 monthly payments of $225.

If you transfer that balance to a credit card that offers a 0% introductory APR on balance transfers like the Citi Rewards+® Card (Citi® is a advertising partner), you will need to pay a balance transfer fee of at least 3%. The fee added to the transfer amount would be $3,000 x 3%, which calculates to $90. When the transferred debt posts to your new account, your starting balance would then tally $3,090. If you pay $220 monthly on your new credit card, you will pay off the card balance in 15 months and save $372.22 in interest charges. If we deduct the $90 balance transfer fee from this amount, your net savings would be $282.22. This calculation assumes you do not make any purchases with the card and do not accrue new balance. Please note that if you do not pay off the card balance in full by the end of the promotional period, a go-to APR will apply to the remaining balance and any new balance you accrue.