Does a balance transfer close your account?

What happens to your card after you transfer a balance?

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After your balance transfer is complete, your old account doesn’t automatically close. In fact, it could still hold a balance depending on the amount you were able to transfer.

Work with the provider of the card to take the necessary steps should you want to close the account. Note that this may not always be the best option, however, depending on your financial needs.

Should you close your account after a balance transfer?

It depends. Closing your account can remove temptation to spend, but it also may impact your credit score.

Here’s what to consider before closing your old account:

  • Can you resist the temptation of spending? If the answer is no, you may want to strongly consider closing the account or looking into ways of removing that temptation.
  • Does the card have an annual fee? An annual fee for a card you’re not using can feel like a waste of money. However, you may want to consider more than just its face value.
  • Are you applying for other credit products? Closing an account can have a negative impact on your credit score. If you’re seeking loans or other credit, you may want to hold off on closing the account until after.
  • Do you want to use the card in the future? Of course, there’s a reason you got the card in the first place. A good cashback rate, a lower APR or unbeatable travel benefits may make it a keeper.

How closing an old account can impact your credit score

Two of the five portions of your FICO credit score are your credit utilization ratio and credit history. Both can be impacted by closing your old account.

The total amount of credit you have versus what you’re currently using makes up your credit utilization ratio. Closing an account lowers the total amount of credit you have and raises the ratio, which can negatively affect your credit.

Similarly, the credit history portion of your score is the average age of your credit accounts. Longer established accounts indicate a good relationship with creditors, and closing an account lowers that average age.

Alternatives to closing your old account after a balance transfer

You don’t necessarily have to close your account to avoid spending more on your old card. Here are three ways to help keep yourself in check:

  1. Budget and stick to it. A good way to avoid spending on credit is to make a detailed budget and adhere to it.
  2. Cut up your card. Make it more difficult to spend from the account.
  3. Delete the card from digital wallets and saved sites. Similar to the last one, this is about making it difficult to spend the funds. It can also help curb midnight impulse buys.

Managing your balance transfer card

There are a few key details you should pay attention to after you’ve conducted your balance transfer:

  • Offer length

Transfer offers generally last between six and 21 months. Typically the balance transfer promotional period begins once your first transfer completes. The sooner you begin repaying your balance, the longer you’ll have to take advantage of the low interest offer.

Set phone and calendar reminders to prompt you to make regular repayments and to flag how long you have left.

  • Promotional rate

Most US providers offer cardholders 0% intro APR balance transfers, but if it does charge a low interest rate, it’s important to understand how much your balance will grow each month and how to factor this into your repayments.

Creating a payment plan will help simplify the process and reduce your chances of failing to repay your entire debt by the end of the promotional period.

  • Revert rate

Once the promotional offer ends, the revert rate will kick in and start collecting interest on your remaining debt.

Make regular payments to avoid growing your debt again with interest once the offer expires. Don’t use your card for purchases and keep an eye on when the offer ends to ensure you don’t have a balance at that point.

  • Minimum repayment

You may have a 0% introductory interest rate, but you still need to make minimum repayments each month. How much you have to pay will vary from card to card, but this amount rarely allows cardholders to repay their entire debt by the time the promotional offer ends.

You should aim to pay more than the minimum amount each statement period to avoid collecting high interest once the promotion expires.

  • Work within a budget

Consider the size of your debt, the length of the promotion and the interest rate to calculate how much you’ll have to pay each month to ensure your entire debt is repaid by the end of the offer.

After the offer ends

If you’ve found yourself with a remaining debt at the end of your promotional period, you might want to consider doing a second balance transfer. However, you might be less likely to be approved for your application as lenders can see your credit history shows you were unable to repay your debt during the promotional period.

Applying for too many credit cards and rejected applications can have a negative impact on your credit file. It’s important to consider how using a second balance transfer as a back up will affect you.

Balance transfer credit cards can be a worthwhile consolidation tool, but only when used properly. Plan your strategy, make regular repayments and follow the above simple tips to ensure you get the most out of your balance transfer.

Our pick for a balance transfer card

Blue Cash Everyday® Card from American Express

  • Earn a $150 statement credit after you spend $1,000 in purchases on your new card within the first 3 months.
  • 3% cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%).
  • 2% cash back at U.S. gas stations and at select U.S. department stores, 1% back on other purchases.
  • Low intro APR: 0% for 15 months on purchases and balance transfers, then a variable rate, currently 14.49% to 25.49%.
  • Over 3 million more places in the U.S. started accepting American Express® Cards in 2017 and 2018.
  • Cash back is received in the form of Reward Dollars that can be easily redeemed for statement credits, gift cards, and merchandise.
  • No annual fee.
  • Terms apply.
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See Rates & Fees

Compare balance transfer credit cards

Name Product Amount saved Balance transfer APR Balance transfer fee Recommended minimum credit score Filter values
0% intro for the first 15 months (then 14.49% to 25.49% variable)
$5 or 3% of the transaction, whichever is greater
Earn a $150 bonus statement credit after you spend $1,000 on purchases in the first 3 months. Rates & fees
0% intro for the first 15 months (then 14.49% to 25.49% variable)
$5 or 3% of the transaction, whichever is greater
Earn a $150 statement credit after you spend $1,000 or more in purchases with your new card within the first 3 months of card membership. Rates & fees
0% intro for the first 15 months (then 15.74%, 21.74% or 25.74% variable)
Earn unlimited 1.5% cash back on every purchase, every day.
0% intro for the first 15 months (then 15.74%, 21.74% or 25.74% variable)
Earn $150 after spending $500 in the first 3 months.
0% intro for the first 12 months (then 14.49% to 25.49% variable)
$5 or 3% of the transaction, whichever is greater
Earn $250 bonus cash back after you spend $1,000 on purchases in the first 3 months. Rates & fees

Compare up to 4 providers

Bottom line

To manage a credit card after a balance transfer requires a certain level of dedication and planning. Just getting the debt shifted over won’t be an instant home run, and smart budgeting is crucial to prevent you from falling into the same place you were before the transfer.

Nail down your plan, and if you’re going to use a back-up card make sure to compare your options before securing it.

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10 Responses

  1. Default Gravatar
    ShaneJuly 2, 2018

    After a balance transfer and the old card is on zero ,hi Adrienne ,can that card be used again with the same limit,,
    Does the balance transfer to the new card add or subtract from the limit
    5000 credit become 8000 or 2000 after a balance transfer of 3000..
    Thankyou for your reply

    • Avatarfinder Customer Care
      nikkiangcoJuly 2, 2018Staff

      Hi Shane!

      Thanks for getting in touch!

      Yes, you can still use your previous credit card (balance transferred to a balance transfer card) and you’d still have the same credit limit unless otherwise changed by your creditor.

      Regarding this question – Does the balance transfer to the new card add or subtract from the limit – This depends on the balance transfer card you choose, as there are banks who offer 80-100% balance transfer limits.

      To paint a better picture, for example, you have a balance of $5000 from an old credit card and you got approved of a 95% balance transfer, you can transfer $4500 to the balance transfer card and the remaining $500 money owed on the old card must be paid in full so you won’t incur other interest.

      To choose and compare balance transfer credit cards, you can go to this page.

      Hope this helps!


  2. Default Gravatar
    isaacFebruary 22, 2018

    Hi, Will conducting a balanced transfer close off my existing card?

    • Avatarfinder Customer Care
      RoslynFebruary 23, 2018Staff

      Hi Isaac,

      Thank you for contacting about balance transfers.

      No, your old card won’t be closed after completing a balance transfer to your new card. You can continue to use your old card until you close your account.

      If you decide to close your old card, keep in mind there might be an impact on your credit score. You might be thinking of closing your old card to avoid paying the annual fee or simplify your monthly bills. But if that’s your oldest credit card or it has a high limit, the hit to your credit utilization ratio and age of credit might lower your credit score.

      You can learn more about the pros and cons of balance transfers. We hope this helps you make an informed decision.



  3. Default Gravatar
    JoseFebruary 7, 2018

    What to do with a card after the balance transfer is paid in full, and if the card interest is high and the card has no rewards benefits?

    • Avatarfinder Customer Care
      RenchFebruary 20, 2018Staff

      Hi Jose,

      Thanks for your inquiry.

      That’s great that you have already paid your balance transfer in full. Whether to use or not your credit card after you’ve settled your account depends entirely on your own decision after considering your overall financial situation.

      If you think that you’d need to close your account, you may so by contacting your bank’s customer care and they’d be happy to assist you.

      Just in case you’re considering to apply for a new card, you can check and compare credit cards with low interest on this page and credit cards with rewards here. Please review the card’s eligibility requirements and its features and consider whether the card/product is right for you.

      Best regards,

  4. Default Gravatar
    MelNovember 8, 2017

    Can you cancel a balance transfer card after you’ve paid off the entire balance? Without it affecting credit score.

    • Default Gravatar
      DanielleNovember 8, 2017

      Hi Mel,

      Thank you for contacting finder. We are a comparison website and general information service, we’re more than happy to offer general advice.

      If you’re closing an account with positive account history, positive credit data stays on your credit report for 10 years from when the account is closed. This allows good credit information to stay longer than negative, giving you the change to improve your financial situation. See more information here.

      I hope this helps.


  5. Default Gravatar
    nadineAugust 30, 2017

    transfer from capital one to chase bank will capital one know about the transfer and close my account

    • Default Gravatar
      LiezlAugust 31, 2017

      Hi Nadine,

      Thanks for your question. Capital One will know about the balance transfer since they will receive the payment from your new credit card. However, a nil balance on your old card will not automatically close your account unless you’ll instruct them to do so. You can read more about credit card balance transfer on this page.

      Kind regards,

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