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® Balance Transfer Review

at Discover Card'ssecure website

0% BALANCE TRANSFER RATING

★★★★★
5.0

OVERALL RATING

4.9/5.0
  • INTRO OFFER: Discover will match ALL the cash back earned at the end of your first year, automatically.
  • Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com, or wholesale clubs up to the quarterly maximum each time you activate. Plus, earn unlimited 1% cash back on all other purchases – automatically.
  • Redeem cash back any amount, any time. Rewards never expire.
  • 100% U.S. based customer service.
  • Get your free Credit Scorecard with your FICO® Credit Score, number of recent inquiries and more.
  • Receive FREE Social Security number alerts—Discover will monitor thousands of risky websites when you sign up.
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% for 6 months
0% for 18 months
13.74% - 24.74% Variable
$0
Good/Excellent
Wells Fargo Platinum Visa® Card Review

at Wells Fargo'ssecure website

0% BALANCE TRANSFER RATING

★★★★★
5.0

OVERALL RATING

4.6/5.0
  • 0% Intro APR for 18 months on purchases and balance transfers, then a 16.90%-26.74% variable APR; balance transfer fees apply
  • 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® Card
  • Free access to your FICO® Credit Score with Wells Fargo Online®
  • 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
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% for 18 months
0% for 18 months
16.90%-26.74% (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 16.74-25.49%. Balance transfer fee is 5% of the amount transferred, $5 minimum
  • No minimum to redeem for cash back
  • Cash Back rewards do not expire as long as your account is open
  • Free credit score, updated weekly with Credit Journey℠
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% Intro APR on Purchases for 15 months
0% Intro APR on Balance Transfers for 15 months
16.74% - 25.49% 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
  • Enjoy new 5% categories each quarter
  • 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 16.74-25.49%. Balance transfer fee is 5% of the amount transferred, $5 minimum
  • Cash Back rewards do not expire as long as your account is open and there is no minimum to redeem for cash back.
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% Intro APR on Purchases for 15 months
0% Intro APR on Balance Transfers for 15 months
16.74% - 25.49% Variable
$0
Excellent/Good
Wells Fargo Cash Wise Visa® Card Review

at Wells Fargo'ssecure website

0% BALANCE TRANSFER RATING

★★★★★
4.7

OVERALL RATING

4.9/5.0
  • Earn a $200 cash rewards bonus after spending $1,000 in the first 3 months
  • Earn unlimited 1.5% cash rewards on purchases
  • Enjoy 1.8% cash rewards on qualified mobile wallet purchases, like Apple Pay® or Android Pay™, during the first 12 months from account opening
  • No category restrictions or 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® Card
  • 0% Intro APR for 12 months on purchases and balance transfers, then a 14.74%-26.74% variable APR; balance transfer fees apply
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% for 12 months
0% for 12 months
14.74%-26.74% (Variable)
$0
Excellent/Good

0% BALANCE TRANSFER RATING

★★★★★
4.5

OVERALL RATING

4.8/5.0
  • One-time $150 cash bonus after you spend $500 on purchases within 3 months from account opening
  • Earn unlimited 1.5% cash back on every purchase, every day
  • No rotating categories or sign-ups needed to earn cash rewards; plus, cash back won't expire for the life of the account and there's no limit to how much you can earn
  • 0% intro APR on purchases for 15 months; 14.74%-24.74% variable APR after that
  • 0% intro APR on balance transfers for 15 months; 14.74%-24.74% variable APR after that; 3% fee on the amounts transferred within the first 15 months
  • Pay no annual fee or foreign transaction fees
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% for 15 months
0% for 15 months
14.74% - 24.74% (Variable)
$0
Excellent, Good

0% BALANCE TRANSFER RATING

★★★★★
4.5

OVERALL RATING

4.6/5.0
  • Earn $500 bonus cash back after you spend $3,000 on purchases in the first 3 months from account opening
  • Named "Best Rewards Card for Small Business Owners" by Kiplinger's Personal Finance, July 2017
  • Earn 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable and phone services each account anniversary year
  • Earn 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year
  • Earn 1% cash back on all other card purchases with no limit to the amount you can earn
  • 0% introductory APR for 12 months on purchases and balance transfers
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% Intro APR on Purchases for 12 months
0% Intro APR on Balance Transfers for 12 months
14.99% - 20.99% Variable
$0
Excellent Credit

0% BALANCE TRANSFER RATING

★★★★★
4.5

OVERALL RATING

4.6/5.0
  • Earn $500 bonus cash back after you spend $3,000 on purchases in the first 3 months from account opening
  • Earn unlimited 1.5% cash back on every purchase made for your business
  • 0% introductory APR for 12 months on purchases and balance transfers
  • Employee cards at no additional cost
  • No Annual Fee
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% Intro APR on Purchases for 12 Months
0% Intro APR on Balance Transfers for 12 Months
14.99% - 20.99% Variable
$0
Excellent Credit

0% BALANCE TRANSFER RATING

★★★★
4.4

OVERALL RATING

4.8/5.0
  • Earn a one-time $150 cash bonus after you spend $500 on purchases within the first 3 months from account opening
  • Earn unlimited 3% cash back on dining, 2% on groceries and 1% on all other purchases
  • No rotating categories or sign-ups needed to earn cash rewards; plus, cash back won't expire for the life of the account and there's no limit to how much you can earn
  • 0% intro APR on purchases for 15 months; 16.24%-24.99% variable APR after that
  • 0% intro APR on balance transfers for 15 months; 16.24%-24.99% variable APR after that; 3% fee on the amounts transferred within the first 15 months
  • No annual fee
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% for 15 months
0% for 15 months
16.24% - 24.99% (Variable)
$0
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