What happens to my old card when I transfer a balance?

After you transfer a balance from one card to another, your old account doesn’t automatically close. In fact, it could still hold a balance depending on the amount you were able to transfer. Despite that, you can still close your credit card with a balance with most card providers.

You can with your provider to take the necessary steps to close your account. But it’s not always the best option, however, depending on your financial needs.

Does a balance transfer close my account?

No. After you transfer your balance to your new credit card, your old card account remains open. The only difference is the balance is reduced, assuming your transfer was successful.

To stay current on your account — and avoid your old issuer submitting negative reports to the credit bureaus — continue making regular payments on your old balance until your new card confirms the transfer. After that confirmation, you can request closure of your credit card.

Will my old bank know I completed a balance transfer?

Yes. After you initiate a balance transfer, your new issuer makes a payment to your old issuer equal to the transfer you’ve requested. Once your transfer is complete, your old bank will know you initiated a balance transfer.

When to close an account after a balance transfer

You don’t have to close a card account after a balance transfer. In fact, it can be beneficial to your credit score to keep it open. But there might be a few good reasons you decide to close the account:

• Annual fees. Paying an annual fee for a card you’re not using can be a waste of money unless the perks and other benefits outweigh the cost. If you truly aren’t using the card but you are paying an annual fee, it may be wise to cancel the card.
• The temptation of spending. If you don’t think you can keep a card in your wallet without feeling the urge to use it, you may want to cancel it.

How to close a credit card with a balance

The process varies between card providers, but closing your card is often a simple process. The general steps include:

1. Call the number on the back of your card.
2. Request to close your credit card.
3. Provide customer support with your name, phone number and address.

The customer support representative will guide you from there.

Alternatives to closing your old account after a balance transfer

You aren’t required to close your account after a balance transfer. Here are three ways to keep your finances in check:

1. Stick to a budget. Create a detailed budget that accounts for money coming in and payments going out — and then commit to it.
2. Cut up your card. It’s more difficult to charge purchases without a card in your wallet.
3. Delete your card from digital wallets. Make it further difficult to spend money by removing your card from sites and e-wallets — and curb midnight impulse buys.

Tips for after a balance transfer

Here are a few financial steps to take after confirmation that your balance transfer is complete:

• Look for other balances to transfer.
  Depending on your available credit, you may be able to transfer other debts. Check your card’s terms to see how long you have to take advantage of the intro APR.
• Double-check your intro APR period.
  Work to pay off your entire balance before your intro APR expires to keep from accruing interest.
• Make payments on time.
  If you make a late payment, your issuer can revert your intro APR to a higher everyday APR. Not only that, but it may impose a penalty on your account.

Can I cancel a balance transfer?

If your balance transfer hasn’t yet posted, you may be able to cancel, depending on your issuer’s policies.

Call the number on the back of your card to ask about canceling a balance transfer.

Bottom line

Managing a credit card after a balance transfer requires dedication and planning, and it doesn’t immediately close your old card. You’ll still need to make payments and accrue interest if you don’t close your old card. Even after shifting your debt, smart budgeting is crucial to prevent you from falling into the same place you were in before the transfer.

If you’re in the market to transfer your debt from one car to another, compare your balance transfer options to find the best fit for your needs.

Frequently asked questions

• How long does a balance transfer take?

  Balance transfers can take anywhere from a few business days to several weeks after you activate your new card. It depends on the provider, your existing account and the information you give. Read the fine print on your new card to understand how long it can take for a transfer to complete.

• Will closing an account affect my credit score?

  Yes, but not by much. Two of the five factors involved in your FICO credit score — your credit utilization ratio and credit history — are affected by closing your old account. Read our guide on how closing a card affects your credit.

• How will I know if my full balance was transferred?

  You can check your old account after the transfer is complete. Your new credit card issuer will likely tell you if it decides to transfer only a partial amount.

• Can I close a credit card with a balance?

  Yes, most cards allow you to close your card with a balance. But you are still responsible for any outstanding balance. Try to pay it off as soon as possible to avoid accruing interest.

• What do I do if my full balance isn't transferred?

  Continue to pay down what’s left over to avoid accruing too much interest on a card you may not intend to keep.