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:
- 0% intro APR for 18 months from account opening on purchases and qualifying balance transfers, then a 16.49% to 24.49% variable APR; balance transfers made within 120 days qualify for the intro rate and fee
- $0 Annual Fee
- 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 card
- Easy access to your FICO® Credit Score with Wells Fargo Online®
- Monitor your spending, purchases and any suspicious activity with text and email alerts and notifications
- Convenient tools to help create a budget and manage your spending with My Money Map
- Select "Apply Now" to learn more about the product features, terms and conditions
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Intro (Purchases)
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Intro (Transfers)
|
Regular APR
|
Annual Fee
|
Credit Needed
|
|---|---|---|---|---|
0% intro APR for 18 months from account opening
|
0% intro APR for 18 months on qualifying balance transfers
|
16.49%-24.49% (Variable)
|
$0
|
Good/Excellent
|
- Earn cash back twice! 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 Offer: 0% intro APR on Balance Transfers for 18 months. After that, the variable APR will be 13.99% - 23.99%, based on your creditworthiness. Balance Transfers do not earn cash back and will have a fee of either $5 or 3% of the amount of each transfer, whichever is greater.
- 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.
- 24/7 access to customer service representatives
- $0 annual fee
|
Intro (Purchases)
|
Intro (Transfers)
|
Regular APR
|
Annual Fee
|
Credit Needed
|
|---|---|---|---|---|
N/A
|
0% for 18 months
|
13.99% - 23.99% Variable
|
$0
|
Excellent/Good
|
- 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)
|
12.99% - 22.99% (Variable)
|
$0
|
Excellent/Good
|
- No Late Fees, No Penalty Rate, and No Annual Fee... Ever
- 0% intro APR offers on both purchases and balance transfers (balance transfer fee applies), then a variable APR applies
- Choose a payment due date that works best for you — beginning, middle, or end of the month
- Stay protected against identity theft with Citi® Identity Theft Solutions
- $0 liability on unauthorized charges
- 24/7 access to customer service representatives - save time, just say "representative" when you call, to enjoy fast, personal help
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Intro (Purchases)
|
Intro (Transfers)
|
Regular APR
|
Annual Fee
|
Credit Needed
|
|---|---|---|---|---|
0% for 18 months
|
0% for 18 months
|
14.74% - 24.74% Variable
|
$0
|
Excellent/Good
|
- 0% Intro APR for 18 months on purchases and balance transfers (balance transfer fee applies), then a variable APR applies
- Alerts keep you informed and stress-free. Once you've set up alerts, we'll remind you about your balance levels, payments due, or when you go over your credit limit, by email or directly on your mobile phone.
- With Citi Entertainment®, get special access to purchase tickets to thousands of events, including presale tickets and exclusive experiences for the year's most anticipated concerts, sporting events, dining experiences, and more
- Shop with confidence knowing that you have dependable protection benefits, including $0 Liability on Unauthorized Purchases and Citi® Identity Theft Solutions.
- 24/7 access to customer service representatives
- Enjoy the flexibility to choose the payment due date that works best for you - the beginning, middle or end of the month
|
Intro (Purchases)
|
Intro (Transfers)
|
Regular APR
|
Annual Fee
|
Credit Needed
|
|---|---|---|---|---|
0% for 18 months
|
0% for 18 months
|
14.74% - 24.74% Variable
|
$0
|
Excellent/Good
|
- New! Earn a $200 cash rewards bonus after spending $1,000 on purchases in the first 3 months
- Earn unlimited 2% cash rewards on purchases
- 0% intro APR for 15 months from account opening on purchases and qualifying balance transfers, then a 14.99% to 24.99% variable APR; balance transfers made within 120 days qualify for the intro rate and fee of 3% then a BT fee of up to 5%, min: $5
- $0 annual fee
- No category restrictions or sign ups and cash rewards don't expire as long as your account remains open
- Enjoy a premium collection of benefits at a selection of the world's most intriguing and prestigious hotel properties with Visa Signature Concierge
- 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 Active Cash℠ Card
- Select "Apply Now" to learn more about the product features, terms and conditions
|
Intro (Purchases)
|
Intro (Transfers)
|
Regular APR
|
Annual Fee
|
Credit Needed
|
|---|---|---|---|---|
0% intro APR 15 months from account opening
|
0% intro APR 15 months from account opening
|
14.99%-24.99% Variable APR
|
$0
|
Good/Excellent
|
- Earn 15,000 bonus points after you spend $1,000 in purchases with your card within 3 months of account opening, redeemable for $150 in gift cards
- Earn 2X ThankYou® Points at supermarkets & gas stations for the first $6,000 per year and 1 point per $1 spent thereafter
- Earn 1 ThankYou® Point per $1 spent on all other purchases
- Automatically rounds up to the nearest 10 ThankYou® Points on every purchase - with no cap, and get 10% Points Back for the first 100,000 ThankYou® Points you redeem per year
- 0% Intro APR offers on purchases and balance transfers (balance transfer fee applies), then a variable APR applies
- $0 annual fee
|
Intro (Purchases)
|
Intro (Transfers)
|
Regular APR
|
Annual Fee
|
Credit Needed
|
|---|---|---|---|---|
0% for 15 months
|
0% for 15 months
|
13.49% - 23.49% Variable
|
$0
|
Good/Excellent
|
- Earn 10,000 bonus points after spending $500 on purchases in the first 90 days
- Earn 2X points on NFL and team purchases and 1X points on all other purchases
- 0% introductory APR for 15 billing cycles on balance transfers made within 45 days of account opening, then a variable APR applies
- Special ticket financing: 0% promotional APR for 6 billing cycles on eligible NFL ticket purchases, then a variable APR applies
- Enjoy 20% off at NFLShop.com
- Redeem points for exclusive NFL experiences, game tickets, NFLShop.com purchases, gift cards, or cash back
|
Intro (Purchases)
|
Intro (Transfers)
|
Regular APR
|
Annual Fee
|
Credit Needed
|
|---|---|---|---|---|
N/A
|
0% for 15 billing cycles
|
15.99%, 20.99%, or 25.99% variable, based on your creditworthiness
|
$0
|
Good
|
- Earn 50,000 bonus miles after spending $500 on purchases and paying the annual fee in full, both within the first 90 days
- Earn 5X miles on eligible purchases at flyfrontier.com, 3X miles on restaurant purchases, and 1X miles on all other purchases
- 0% intro APR for 15 months on balance transfers made within 45 days of account opening (3% balance transfer fee applies), then a variable APR applies
- Earn a $100 flight voucher every account anniversary after spending $2,500 or more on purchases with your card during your card membership year
- Cardmembers enjoy Zone 2 priority boarding
- $0 introductory annual fee for the first year; $79 annual fee thereafter
|
Intro (Purchases)
|
Intro (Transfers)
|
Regular APR
|
Annual Fee
|
Credit Needed
|
|---|---|---|---|---|
N/A
|
0% for 15 billing cycles
|
15.99%, 19.99%, or 24.99% variable, based on creditworthiness
|
$0 intro; $79 thereafter
|
Good
|
- Earn $100 cash back after spending $500 on purchases in the first 90 days
- Earn 1.25% Cash Back Rewards on every purchase
- Earn 1.529% Cash Back Rewards on your purchases when your Upromise Program account is linked to an eligible College Savings Plan
- 0% introductory APR for 15 months on balance transfers made within 45 days of account opening (balance transfer fee applies), then a variable APR applies
- Free online access to your FICO® Score
- $0 annual fee
|
Intro (Purchases)
|
Intro (Transfers)
|
Regular APR
|
Annual Fee
|
Credit Needed
|
|---|---|---|---|---|
N/A
|
0% for 15 months
|
14.99%, 19.99%, or 24.99% variable, based on creditworthiness
|
$0
|
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
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