Perhaps your credit card bills are piling up faster than you can pay down the balance, and you’re wondering “If I cancel my credit card will the interest stop?” By 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:
- No, interest doesn’t stop when you cancel a card with a remaining balance.
- You can do a balance transfer to a card that will offer 0% interest.
- We’ll show you the 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 on your outstanding balance.
You’ll also still be charged late fees if you don’t make a monthly payment on time. 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.
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 Problems, 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.
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% interest lasts, the regular APR, annual fees and all other pertinent info.
Here are our expert’s top picks for the best balance transfer cards available today:
- INTRO OFFER: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. You could turn $150 cash back into $300.
- Earn 5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, gas stations and when you pay using PayPal, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases – automatically.
- Redeem cash back any amount, any time. Rewards never expire.
- No annual fee.
- Get your free Credit Scorecard with your FICO® Credit Score, number of recent inquiries and more.
- Click "APPLY NOW" to see rewards, FICO® Credit Score terms, Cashback Match™ details & other information.
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Intro (Purchases)
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Intro (Transfers)
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Regular APR
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Annual Fee
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Credit Needed
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|---|---|---|---|---|
0% Intro APR for 6 months
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0% Intro APR for 18 months
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12.24% - 23.24% Variable APR
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$0
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Excellent/Good/Average
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- No Late Fees, No Penalty Rate, and No Annual Fee... Ever
- 0% Intro APR for 21 months on balance transfers from date of first transfer and 0% Intro APR for 12 months on purchases from date of account opening. After that the variable APR will be 15.49% - 25.49%, based on your creditworthiness. Balance transfers must be completed within 4 months of account opening.
- There is a balance transfer fee of either $5 or 5% of the amount of each transfer, whichever is greater.
- The standard variable APR for Citi Flex Plan is 15.49% - 25.49%, based on your creditworthiness. Citi Flex Plan offers are made available at Citi's discretion.
- Stay protected with Citi® Quick Lock and $0 liability on unauthorized charges
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Intro (Purchases)
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Intro (Transfers)
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Regular APR
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Annual Fee
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Credit Needed
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|---|---|---|---|---|
0% Intro APR Period 12 months on Purchases
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0% Intro APR Period 21 months on Balance Transfers
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15.49% - 25.49% (Variable)
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$0
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Excellent, Good Credit
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Additional Disclosure: Citi is a CardRates advertiser.
- 0% Intro APR for 21 months on balance transfers from date of first transfer and 0% Intro APR for 12 months on purchases from date of account opening. After that the variable APR will be 14.49% - 24.49%, based on your creditworthiness. Balance transfers must be completed within 4 months of account opening.
- There is a balance transfer fee of either $5 or 5% of the amount of each transfer, whichever is greater
- Get free access to your FICO® Score online.
- With Citi Entertainment®, get special access to purchase tickets to thousands of events, including concerts, sporting events, dining experiences and more.
- The standard variable APR for Citi Flex Plan is 14.49% - 24.49%, based on your creditworthiness. Citi Flex Plan offers are made available at Citi's discretion.
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Intro (Purchases)
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Intro (Transfers)
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Regular APR
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Annual Fee
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Credit Needed
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|---|---|---|---|---|
0% 12 months on Purchases
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0% 21 months on Balance Transfers
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14.49% - 24.49% (Variable)
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$0
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Excellent, Good
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Additional Disclosure: Citi is a CardRates advertiser.
- Start off strong with 0% Intro APR for 18 months from account opening on purchases and balance transfers. A variable APR of 15.24% - 23.99% on balance transfers and purchases after the introductory period ends.
- Lower your interest rate by 2% each year. Automatically be considered for an APR reduction when you pay on time, and spend at least $1000 on your card by your next account anniversary.
- Raise your credit limit. Get an automatic, one-time review for a higher credit limit when you pay on time, and spend $500 in your first six months.
- All for no annual fee - You won't have to pay an annual fee for all the great features that come with your Slate Edge℠ card
- Keep tabs on your credit health - Chase Credit Journey helps you monitor your credit with free access to your latest score, real-time alerts, and more
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Intro (Purchases)
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Intro (Transfers)
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Regular APR
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Annual Fee
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Credit Needed
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|---|---|---|---|---|
0% Intro APR on Purchases 18 months
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0% Intro APR on Balance Transfers 18 months
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15.24% - 23.99% Variable
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$0
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Good/Excellent
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- Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.
- To earn cash back, pay at least the minimum due on time.
- Balance Transfer Only Offer: 0% intro APR on Balance Transfers for 18 months. After that, the variable APR will be 14.74% - 24.74%, based on your creditworthiness.
- Balance Transfers do not earn cash back. Intro APR does not apply to purchases.
- If you transfer a balance, interest will be charged on your purchases unless you pay your entire balance (including balance transfers) by the due date each month.
- There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5).
- The standard variable APR for Citi Flex Plan is 14.74% - 24.74%, based on your creditworthiness. Citi Flex Plan offers are made available at Citi's discretion.
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Intro (Purchases)
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Intro (Transfers)
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Regular APR
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Annual Fee
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Credit Needed
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|---|---|---|---|---|
N/A
|
0% Intro APR Period 18 months on Balance Transfers
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14.74% - 24.74% (Variable)
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$0
|
Excellent, Good
|
Additional Disclosure: Citi is a CardRates advertiser.
- For a limited time, get a special 0% introductory APR on purchases and balance transfers for 20 billing cycles. After that the APR is variable, currently 14.74%-24.74%.
- Enjoy Cellphone Protection Coverage when you pay your monthly cellular bill with your U.S. Bank Visa® Platinum Card
- View your credit score anytime, anywhere in the mobile app or online banking. It's easy to enroll, easy to use, and free to U.S. Bank customers.
- Fraud Protection detects and notifies you of any unusual card activity to help prevent fraud
- Choose your payment due date
- $0 Annual fee
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Intro (Purchases)
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Intro (Transfers)
|
Regular APR
|
Annual Fee
|
Credit Needed
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|---|---|---|---|---|
0% for 20 billing cycles
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0% for 20 billing cycles
|
14.74% - 24.74% Variable
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$0
|
Excellent Credit
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- Earn $100 statement credit online bonus after making at least $1,000 in purchases in the first 90 days of your account opening
- 0% Intro APR for 18 billing cycles for purchases, and for any balance transfers made in the first 60 days, then a variable APR will apply
- An optional overdraft protection service is available to help prevent declined purchases, returned checks or other overdrafts when you link your eligible Bank of America® checking account to your credit card. Transfer fees may apply.
- No penalty APR. Paying late won't automatically raise your interest rate (APR). Other account pricing and terms apply.
- Access your FICO® Score for free within Online Banking or your Mobile Banking app
- No annual fee
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Intro (Purchases)
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Intro (Transfers)
|
Regular APR
|
Annual Fee
|
Credit Needed
|
|---|---|---|---|---|
0% Intro APR for 18 billing cycles
|
0% Intro APR for 18 billing cycles (for balance transfers made in the first 60 days)
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12.99% - 22.99% (Variable)
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$0
|
Excellent/Good
|
- Online $200 cash rewards bonus after making at least $1,000 in purchases in the first 90 days of your account opening
- Earn unlimited 1.5% cash back on all purchases
- No limit to the amount of cash back you can earn and cash rewards don’t expire
- 0% Intro APR for your first 15 billing cycles for purchases, and for any balance transfers made within the first 60 days of opening your account. After that, a Variable APR that's currently 14.24% to 24.24% will apply. A 3% fee (min $10) applies to all balance transfers.
- Preferred Rewards members earn 25%-75% more cash back on every purchase. That means you could earn up to 2.62% cash back on every purchase. Learn More About Preferred Rewards.
- $0 annual fee
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Intro (Purchases)
|
Intro (Transfers)
|
Regular APR
|
Annual Fee
|
Credit Needed
|
|---|---|---|---|---|
0% for 15 billing cycles
|
0% for 15 billing cycles
|
14.24% - 24.24% (variable)
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$0
|
Good
|
- INTRO OFFER: Earn an additional 1.5% cash back on everything you buy (on up to $20,000 spent in the first year) - worth up to $300 cash back!
- Enjoy 6.5% cash back on travel purchased through Chase Ultimate Rewards®, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 4.5% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 3% on all other purchases (on up to $20,000 spent in the first year).
- After your first year or $20,000 spent, enjoy 5% cash back on Chase travel purchased through Ultimate Rewards®, 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and unlimited 1.5% cash back on all other purchases.
- No minimum to redeem for cash back. You can choose to receive a statement credit or direct deposit into most U.S. checking and savings accounts. Cash Back rewards do not expire as long as your account is open!
- Enjoy 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 15.24% - 23.99%.
- No annual fee - You won't have to pay an annual fee for all the great features that come with your Freedom Unlimited® card
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Intro (Purchases)
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Intro (Transfers)
|
Regular APR
|
Annual Fee
|
Credit Needed
|
|---|---|---|---|---|
0% Intro APR on Purchases 15 months
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0% Intro APR on Balance Transfers 15 months
|
15.24% - 23.99% Variable
|
$0
|
Good/Excellent
|
- Earn a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening.
- 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. Enjoy new 5% categories each quarter!
- 5% cash back on travel purchased through Chase Ultimate Rewards®, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more
- 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and unlimited 1% cash back on all other purchases.
- No minimum to redeem for cash back. You can choose to receive a statement credit or direct deposit into most U.S. checking and savings accounts. Cash Back rewards do not expire as long as your account is open!
- 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 15.24% - 23.99%.
|
Intro (Purchases)
|
Intro (Transfers)
|
Regular APR
|
Annual Fee
|
Credit Needed
|
|---|---|---|---|---|
0% Intro APR on Purchases 15 months
|
0% Intro APR on Balance Transfers 15 months
|
15.24% - 23.99% Variable
|
$0
|
Good/Excellent
|
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
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Editorial Note: Our site content is not provided or commissioned by any credit card issuer(s). Opinions expressed on CardRates.com are the author's alone, not those of any credit card issuer, and have not been reviewed, approved, or otherwise endorsed by credit card issuers. Every reasonable effort has been made to maintain accurate information; however, all credit card offer details, including information about rewards, signup bonuses, introductory offers, and other terms and conditions, is presented without warranty. Clicking on any offer on CardRates.com will direct you to the issuer's website, where you can review the current terms and conditions of the offer.
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