If I Cancel My Credit Card Will The Interest Stop? (Learn How)

If I Cancel My Credit Card Will The Interest Stop? (Learn How)

credit card advice

Ashley Dull
By: Ashley Dull
Posted: November 12, 2015
Opinions expressed here are ours alone, and are not provided, endorsed, or approved by any issuer. Site may be compensated through the issuer affiliate programs.

If you’re considering closing your credit card to save on interest charges, you’ve got the right idea but the wrong method. There are some things you need to know, which we’ll cover in this article:

  1. No, interest doesn’t stop when you cancel a card with a remaining balance.
  2. You can do a balance transfer to a card that will offer 0 percent interest.
  3. We’ll show you the 10 best cards available that offer no interest for up to 18 months.

That being said, let’s dive in.

Interest Will Still Be Charged to Your Card

If you close an account with a remaining balance, the terms of your credit card agreement are still in effect. This means you’re responsible for paying your bill each month and on time, and interest will still be charged. Same goes for late fees if you miss your due date.

Some issuers even charge additional fees for closing an account with a balance. Be sure to read your credit card agreement to see if this applies to you.

Basically, everything remains the same except for your ability to use the card to make purchases. But there’s another important thing to consider: Your credit score will be negatively affected if you close your card.

Your Credit Score Will Go Down

This is because of your credit utilization ratio. The amount of your available credit for said account will now be $0, but your outstanding debt will still be reported to the bureaus. This means your debt appears higher, therefore your score will be lower.Credit Utilization Calculation

By how much depends on your outstanding balance, as well as how long you’ve had the account. Closing older accounts hurts your score more than closing newer accounts.

But there IS a way for you to still close that account AND stop paying interest…

To Avoid These Negatives, Transfer Your Balance to a 0% APR Card

What this means is you actually do the opposite and open a new account and transfer the old card’s balance to the new card. Issuers now offer balance transfers with 0 percent interest for up to 18 months. This means you’re making interest-free payments during that time.

After you’ve transferred your balance to the new card, go ahead and close the old account.

And just like that, you’re making interest-free purchases and your old account is closed. Mission accomplished.

10 Best Balance-Transfer Credit Cards

We’ve made it easy and compiled a list of the best balance transfer offers out there as reviewed by our credit experts. All the information you need is there, including how long the 0 percent interest lasts, the regular APR, annual fees and all other pertinent info.

Here are our expert’s 10 top picks for the best balance transfer cards available today:

Discover it® 18 Month Balance Transfer Offer Review

at Discover'ssecure website

  • Our Take: "With a ridiculously good deal on balance transfers, low APR's, and a generous cash-back program, we can see why this card is so popular.
  • 0% intro APR on balance transfers for 18 months
  • 5% cash back in categories that rotate quarterly, up to $1,500 per quarter when you sign up for the quarterly bonus
  • 1% cash back on all your other purchases
  • Matches the cash back you've earned at the end of your first year (only for new cardmembers)
  • No limit to the amount of cash back that can be matched"
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0%
6 months
0%
18 months
11.24% - 23.24% Variable
$0
Excellent/Good

0% BALANCE TRANSFER RATING

★★★★★
4.9

OVERALL RATING

4.7/5.0
  • $0 Introductory balance transfer fee for transfers made during the first 60 days of account opening
  • 0% Introductory APR for 15 months on purchases and balance transfers
  • Monthly FICO® Score and Credit Dashboard for free
  • No Penalty APR - Paying late won't raise your interest rate (APR). All other account pricing and terms apply
  • $0 Annual Fee
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0%
15 months
0%
15 months
13.24%-23.24% Variable
$0
Excellent/Good

0% BALANCE TRANSFER RATING

★★★★★
4.9

OVERALL RATING

5.0/5.0
  • Unlimited 1.5% cash back on every purchase — it's automatic
  • Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening
  • 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 14.24-23.24%. Balance transfer fee is 5% of the amount transferred, $5 minimum
  • Redeem for cash — any amount, anytime
  • Cash Back rewards do not expire as long as your account is open
  • No annual fee
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0%
15 months
0%
15 months
14.24%-23.24% Variable
$0
Excellent/Good
Wells Fargo Propel American Express® Card Review

at Wells Fargo'ssecure website

0% BALANCE TRANSFER RATING

★★★★★
4.9

OVERALL RATING

4.8/5.0
  • Earn 3X points at U.S. gas stations, 2X points at U.S. restaurants, 1X point on other net purchases every day
  • $0 Annual Fee
  • 0% Intro APR for 15 months on purchases and balance transfers, after that the variable APR will be 13.24%-25.24%
  • Enjoy exclusive offers on airline tickets, hotels, car rentals, and cruises
  • Redeem points for travel, gift cards, cash redemption options or merchandise through Go Far™ Rewards
  • Get up to $600 protection on your cell phone (subject to $25 deductible) against covered damage or theft when you pay your monthly cellular telephone bill with your Wells Fargo Propel American Express® Credit Card
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0%
15 months
0%
15 months
13.24%-25.24% (Variable)
$0
Excellent/Good
Wells Fargo Platinum Visa® Credit Card Review

at Wells Fargo'ssecure website

0% BALANCE TRANSFER RATING

★★★★★
4.9

OVERALL RATING

4.6/5.0
  • 0% Intro APR for 15 months on purchases and balance transfers, after that the variable APR will be 15.40%-25.24%
  • Get up to $600 protection on your cell phone (subject to $25 deductible) against covered damage or theft when you pay your monthly cellular telephone bill with your Wells Fargo Platinum Visa® Credit Card
  • Zero Liability protection for promptly reported unauthorized transactions
  • Convenient tools to help create a budget and manage your spending with My Money Map
  • $0 Annual Fee
  • Select "Apply Now" to learn more about the product features, terms, and conditions
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0%
15 months
0%
15 months
15.40%-25.24% (Variable)
$0
Excellent/Good
Wells Fargo Cash Wise Visa® Credit Card Review

at Wells Fargo'ssecure website

0% BALANCE TRANSFER RATING

★★★★★
4.9

OVERALL RATING

4.9/5.0
  • New: Earn $150 cash rewards bonus after spending $1,000 in net purchases in the first 3 months
  • Earn unlimited 1.5% cash rewards on everyday net purchases
  • Enjoy 1.8% cash rewards on Android Pay™ or Apple Pay™ mobile wallet net purchases during the first 12 months from account opening
  • 0% Intro APR for 12 months on purchases and balance transfers, after that the variable APR will be 13.24%-25.24%
  • No category restrictions or quarterly sign ups and cash rewards don't expire as long as your account remains open
  • Get up to $600 protection on your cell phone (subject to $25 deductible) against covered damage or theft when you pay your monthly cellular telephone bill with your Wells Fargo Cash Wise Visa® Credit Card
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0%
12 months
0%
12 months
13.24%-25.24% (Variable)
$0
Excellent/Good

0% BALANCE TRANSFER RATING

★★★★★
4.9

OVERALL RATING

5.0/5.0
  • Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening
  • Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate
  • Unlimited 1% cash back on all other purchases — it's automatic
  • 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 14.24-23.24%. Balance transfer fee is 5% of the amount transferred, $5 minimum
  • Enjoy new 5% categories every 3 months like gas stations, restaurants, and wholesale clubs
  • Cash Back rewards do not expire as long as your account is open
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0%
15 months
0%
15 months
14.24%-23.24% Variable
$0
Excellent/Good
Discover it® Cashback Match™ Review

at Discover'ssecure website

0% BALANCE TRANSFER RATING

★★★★★
4.8

OVERALL RATING

5.0/5.0
  • Our Take: "One of our favorite cards, with long 0% intro APRs, low ongoing APRs, awesome cash back rewards, and lots more.
  • 5% cash back in categories that rotate quarterly, up to $1,500 per quarter when you sign up for the quarterly bonus
  • 1% cash back on all your other purchases
  • Matches the cash back you've earned at the end of your first year (only for new cardmembers)
  • No limit to the amount of cash back that can be matched"
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0%
14 months
0%
14 months
11.24% - 23.24% Variable
$0
Excellent/Good
Discover it® chrome Review

at Discover'ssecure website

0% BALANCE TRANSFER RATING

★★★★★
4.8

OVERALL RATING

4.8/5.0
  • Our Take: "What's not to love? Great intro rates, low ongoing APR, cash-back rewards, and great customer service make this card a solid choice
  • 2% cash back at gas stations and restaurants, up to $1,000 per quarter
  • 1% cash back on all your other purchases, with no limits
  • Matches the cash back you've earned at the end of your first year (only for new cardmembers)
  • No limit to the amount of cash back that can be matched"
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0%
14 months
0%
14 months
11.24% - 23.24% Variable
$0
Excellent/Good
Wells Fargo Propel 365 American Express® Card Review

at Wells Fargo'ssecure website

0% BALANCE TRANSFER RATING

★★★★★
4.7

OVERALL RATING

4.8/5.0
  • Earn 20,000 bonus points when you spend $3,000 in net purchases in the first 3 months
  • Earn 3X points at U.S. gas stations, 2X points at U.S. restaurants, and 1X points on other net purchases every day
  • 0% Intro APR for 12 months on purchases and balance transfers, after that the variable APR will be 14.24%-22.24%
  • Enjoy special offers on airfare, hotels, and amenities, plus a 24/7 concierge and other travel and purchase protection benefits
  • Earn an annual relationship bonus of 10%, 25%, or 50% on non-bonus rewards points if you maintain a qualifying consumer Wells Fargo Checking or Savings Account
  • Redeem points for travel, gift cards, cash redemption options or merchandise through Go Far™ Rewards
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0%
12 months
0%
12 months
14.24%-22.24% (Variable)
$0 1st year, then $45
Excellent/Good

Control Your Spending & Be Mindful of Fees

With a new card comes the opportunity to use it, of course. If you’re worried about spending and racking up a balance on the new card, there are some things you can do to prevent abusing credit:

  • Cut up the new card, and close it when your balance is paid.
  • Freeze the card in a block of ice. Sounds weird, but you won’t be able to get to it unless you really need to.
  • Have your significant other/someone you trust hold on to it. You’ll have to go through them to justify any use of the card.

While transferring a balance really can be a great solution, be sure to check for any balance transfer fees. Some issuers charge a small percentage of the balance you’re transferring and tack it on to your statement. If the fee is more than what your current interest charges equate to over the life of your payments, it may not be worth it.

Photo credits: nextadvisor.com