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After you complete a balance transfer, your old credit card will remain open unless you decide to cancel it.
If you transferred the entire previous credit card balance to a new card, you'll have the option to close the original account. But canceling the old card doesn't happen automatically, and it could have a negative impact on your credit. Instead, you could consider keeping the old card open or downgrading it to a fee-free version with the same issuer.
Here's what to know about your options once you've made a balance transfer.
What Happens to Your Old Credit Card After a Balance Transfer?
After you complete a balance transfer, your old credit card will either have a zero balance or the remaining amount that wasn't transferred. In the case of a zero balance, you can decide whether to close the old account or to keep it open. (We'll go into the pros and cons of doing so next.)
If the new balance transfer credit card didn't provide a high enough limit to accommodate your previous card's entire balance, the old card will have a remaining amount to pay off. Keep making payments for the account to stay current and to avoid missed payments and damaged credit. You can make either the minimum payment required or more if you're committed to paying off credit card debt.
Learn more >> Does Closing a Credit Card Hurt Your Credit?
Should You Cancel Your Old Credit Card?
There are benefits and drawbacks to closing your old credit card if it has a zero balance post- transfer. Whether to cancel it often depends on your goals, including whether you want to maintain as strong a credit score as possible in the short or long term. Here's what to consider.
Pros of Canceling Your Old Credit Card
- You'll avoid accruing more debt. If you've made a balance transfer in order to concentrate on debt reduction, it may be beneficial to cancel the card so you can't add to your debt.
- You'll save on annual fees. Some rewards credit cards and subprime credit cards have annual fees, which can range from $50 to more than $600 a year, depending on the card. If you don't plan on using the card to avoid accruing debt, consider canceling it to save on the fee. Or you can ask the issuer to downgrade your card to one of the company's no-fee options.
Cons of Canceling Your Old Credit Card
- You'll have increased credit utilization. When you cancel a credit card, your overall credit utilization rate, or the percentage of available credit you're currently using, will increase. That's because you've lost access to the credit limit on the card you closed. If you can keep your old account open with a low or zero balance, the amount of credit you use will be a smaller proportion of your total available credit, and that can help keep your credit score strong. Amounts owed, of which credit utilization is a factor, is one of the most important factors in your FICO® Score☉ , accounting for 30% of it.
- Your average account age will eventually drop. A less significant contributor to credit scores is the length of your credit history, which accounts for 15% of your FICO® Score. On-time payment history on a closed account will contribute positively to your score for 10 years, so you may not experience a major negative impact to your score immediately after canceling the card. But if the credit card is one of your oldest accounts, and if you have a thin credit file otherwise, closing it will shorten your average age of accounts and potentially limit your credit mix, damaging your score. Consider keeping it open if it's a particularly long-running account.
Learn more >> Should You Cancel Your Unused Credit Cards or Keep Them?
What Happens to Your New Credit Card After You Pay Off the Balance?
Once you've paid off the debt you transferred to the new card, it will remain open and will function like a normal credit card. You can also close it. Here's what to weigh when deciding what to do next.
Use Your Credit Card
If you keep the card open, you can make purchases and potentially earn rewards if your card offers them. It's crucial to only make purchases after you've completely paid off the transferred balance. Credit card issuers don't offer the standard grace period on purchases made before a transferred balance is paid off, and interest will start accruing immediately on those charges.
Keep an eye on the purchase annual percentage rate (APR) offered by your balance transfer credit card. When your 0% APR introductory period ends, the APR could jump to as much as 30%. It's ideal to pay off your full balance each month to avoid significant interest charges. Since keeping the card open may positively affect your credit utilization, consider using the card to make a single recurring payment, like a monthly subscription, and pay it off right away.
Cancel Your Credit Card
Once your transferred balance is paid off, you can also cancel the new credit card. This could lead to a change in your credit utilization rate, average account age and credit mix, affecting your credit. But it may be worthwhile if it will help you stay debt-free and you don't foresee benefitting from the card's rewards.
Save with an intro 0% APR balance transfer
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Pick from top balance transfer cards with lengthy intro 0% APR periods on balance transfers.
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Frequently Asked Questions
Consider pursuing a balance transfer if one of the following is true for you:
- You'll save money on interest. Transferring a balance from a high-interest credit card to one with an introductory 0% APR, even with a balance transfer fee, could mean massive savings—and could help you pay down debt faster.
- You'll benefit from simplified bills. If the credit limit on your new balance transfer card is large enough, you can consolidate multiple debts with various minimum payments and due dates into one streamlined monthly bill.
- The new card has more favorable terms. You may find a balance transfer card with preferable terms and conditions to your previous card, such as no annual fee, no late fees or cash back if you use it after you've paid off the transferred balance.
To initiate a balance transfer, follow these steps:
- Compare options across multiple issuers. You'll likely need to find a credit card with a different issuer than the one with the existing balance. Pay attention to how long the introductory 0% APR period lasts—at the high end, some cards provide an intro period of 21 months—and the balance transfer fee, which is usually 3% or 5% of the transferred amount.
- Apply with your chosen issuer. You will typically need good to excellent credit to qualify. If you're approved, you'll find out what your credit limit will be. Then, if the issuer hasn't provided instructions for how to make the transfer, contact them and follow their process.
- Make the transfer. The issuer may either pay off your old balance directly or issue you a check to do so on your own. You'll likely have a limited time to transfer the balance—generally a few months from the time you opened the account.
Learn more >> How to Do a Balance Transfer
In the short term, a balance transfer can slightly hurt your credit due to a new hard inquiry appearing on your credit report and the fact that you'll have a new, lower average account age. But in the long term, your credit score could improve. That's because getting a new card will lower your overall credit utilization, and you'll pay off debt, reducing your amounts owed. Plus, having fewer credit card bills to pay may help you avoid missed payments.
The Bottom Line
After you've transferred a credit card balance, you can choose whether to cancel or keep your old card. The same is true for the new card once you've paid off the debt you transferred. In both cases, consider what is most important to you—staying debt-free, for example, or bolstering your credit score—when deciding on your next move.
If you're at the start of your balance transfer journey, shopping around for a balance transfer credit card can help you score the best deal on fees, terms and interest rates. Experian's card comparison tool allows you to compare balance transfer card offers that are personalized to your credit score.