Balance transfers and refinancing are common ways to reduce the interest cost on outstanding debt, at least in the short term. A practical way to estimate savings is to compare simple annual interest amounts when terms are otherwise comparable. For instance, if you move a $5,000 balance from a high-rate account to a lower-rate loan, the difference in annual interest equals the balance multiplied by the APR difference. This quick calculation doesn’t include transfer fees or amortization effects, but it’s useful to estimate the immediate savings potential before you read the fine print. The item below asks for the one-year interest savings when a $5,000 balance moves from 18% APR to 6% APR.