Whether switching your credit card will cost anything close to the example outlined above — and whether that nets out to be a moneymaker — depends on a number of factors. Among them: Savings on interest. Switching to a low-rate or 0 percent interest rate card for a six-month introductory period can reduce the overall interest you pay on the outstanding balance. The amount of that savings depends on how long it takes to pay off the balance once the rate adjusts to its normal level, the amount of monthly payments and whether other transactions (i.e., cash advances or purchases) are charged to the account.

Switching to a low-rate or 0 percent interest rate card for a six-month introductory period can reduce the overall interest you pay on the outstanding balance. The amount of that savings depends on how long it takes to pay off the balance once the rate adjusts to its normal level, the amount of monthly payments and whether other transactions (i.e., cash advances or purchases) are charged to the account. Credit scores. Canceling an older credit card can impact your credit score and affect the ability to get other credit cards and loans. The dollar value of this cost depends on a number of variables but should be considered when switching credit cards. Methodology and assumptions: For the transfer amount, we used a credit card with an outstanding balance of $7,300, the average amount of credit card debt in 2007 according to the Consumer Finances Survey published by the Federal Reserve in February 2009. This example assumes the consumer is making two payments a month using recurring automatic payments to the old card. A study released by the Federal Reserve in October 2008 says the number of payments initiated on billers’ sites is unknown. However, rewards card users frequently sign up for such payment methods to boost spending for rewards points. Time cost: What is the value of your time? The closest estimate is what workers are paid by employers. According to the U.S. Department of Labor’s Bureau of Labor Statistics, the average wage for a nonfarm, production nonsupervisory worker was $18.49 in January 2009. For information on your particular situation, see our Balance transfer calculator.