Once the transfer completes, your balance drops to zero, or whatever is left that you didn't transfer. For example, if you were unable to transfer the entire amount due to your new card's balance transfer limit, you'll need to keep making payments on your old card and won't have the option to close it just yet.
When your balance transfer is complete, your old card isn't automatically closed, and you're not required to cancel it either. Depending on the new card's credit limit, you may not be able to transfer the entire balance. In that case, the old card will have a remaining balance you must continue to pay off.
No, completing a balance transfer will not cancel your old card.
A balance transfer credit card can offer you many months to pay off high-interest debt in the form of a 0 percent introductory APR. But when that balance transfer period ends, interest charges are added to the balance if it isn't paid off.
Your old credit card will remain open after the balance transfer is complete, and you can decide whether you want to keep using it, stop spending on it, or close your account.
A balance transfer fee will likely apply
Depending on the terms of the card you're considering and its current promotion, you may have to pay a balance transfer fee. This fee is usually 3 percent to 5 percent of the total transfer amount and may be subject to minimum fees.
If you'd be able to pay off your credit card balance in three months or less, you might be better off doing so rather than seeking a balance transfer, since the transfer fee might be greater than the interest you'd pay.
Owning more than two or three credit cards can become unmanageable for many people. However, your credit needs and financial situation are unique, so there's no hard and fast rule about how many credit cards are too many. The important thing is to make sure that you use your credit cards responsibly.
Opening a new card account for a balance transfer
However, at the same time, a new card will lower your average account age, which makes up part of your credit score. And if you apply for several balance-transfer cards at once, that can throw up a red flag to creditors.
One of the best tips to follow after a balance transfer is to set up automatic payments. This ensures you're always paying down your balance and paying on time. Try to make these payments more than the minimum due. Doing so can help you pay down your debt faster.
There are some differences around how the various data elements on a credit report factor into the score calculations. Although credit scoring models vary, generally, credit scores from 660 to 724 are considered good; 725 to 759 are considered very good; and 760 and up are considered excellent.
Yes, you can make multiple balance transfers to one card. However, the total amount you can transfer depends on your credit limit. You may also have to adhere to other restrictions, such as: Minimum transfer amounts.
Closing a credit card after transferring the balance can negatively impact your credit scores by increasing your credit utilization rate. It's best to leave the account open, even if you don't use it very often. At Experian, one of our priorities is consumer credit and finance education.
With no grace period, if you make any purchases on your new credit card after completing your balance transfer, then you'll incur interest charges on those purchases from the moment you make them.
You generally can't cancel or reverse a balance transfer once the transaction is complete, although some companies might offer a brief grace period. Some card issuers will let you cancel if it hasn't yet posted, but it's always best to request cancellation quickly once you decide on that course.
Key takeaways
If you don't use your card, your credit card issuer may lower your credit limit or close your account due to inactivity. Closing a credit card account can affect your credit scores by decreasing your available credit and increasing your credit utilization ratio.
The ideal number of credit cards will depend on your spending habits and financial goals. “Three or four is a good number for a lot of people, but you can build credit with as little as one,” Rossman said. Research from Experian found U.S. consumers carried 3.9 credit cards on average in 2023 — down from 4.2 in 2017.
Balance transfers can have downsides, starting with the fees you might pay to complete. Those fees get added to your balance, increasing the amount you have to repay. A balance transfer may not save you money on interest if you're not able to pay the balance off before the end of your promotional period.
For someone with a good or very good credit score, an APR of 20% could be good, while a 12% APR may be good for someone with an excellent score. If your score is lower, an APR of 25% could be considered good. No matter your score, the lower the APR, the better.
Paying on time is always important, but with a balance-transfer card, failing to do so could cost you your zero percent offer and prematurely subject your balance to the go-to APR or an even higher penalty rate that dwarfs what you were paying on your old card. That's on top of any late fees the card charges.
Many issuers are generous, giving cardholders the ability to transfer their full credit limit, but in some cases, your transfer limit may be capped at 75 percent of your overall credit limit. Some card issuers also have internal rules for balance transfers.
Applying for a new credit card to transfer your balance will result in a hard inquiry on your credit report. A hard inquiry will shave a few points off your score initially, and it will stay on your credit report for up to two years. Opening a new card also affects the length of credit history.
Balance transfer credit card mistakes may add fees or cause you to lose your 0% introductory APR. Common mistakes you should avoid include missing the transfer deadline, making new purchases at the standard APR and not having a repayment plan.