Transferring high-interest debt to a new credit card with a 0% APR could be a smart debt reduction strategy. But if you’re considering this debt consolidation tool, it’s important to understand how it works — including what happens to your old credit card after the balance transfer takes place.
The decisions you make after a balance transfer (both with your original credit card and the new one) could have a meaningful impact on your credit score and your finances. Here’s what you need to know to avoid mistakes.
What happens after a balance transfer?
A balance transfer is a debt consolidation strategy that involves paying off an existing credit obligation with another credit card. Essentially, you’re moving debt from one lender or credit card issuer to a new one.
After you transfer debt from your original credit card to a new account, the balance on the old card will decline. This process typically takes a few days, though sometimes it could be longer.
Whether your old credit card balance moves all the way to zero or just some lower amount depends on how much debt you moved during the balance transfer process. Either way, it’s important to confirm that your original creditor received payment from the new one because mistakes can happen.
Should I cancel my old card after a balance transfer?
After a balance transfer takes place, your old account remains open. The original card issuer will typically only close your account if you make a request for it to do so. Unless you have a good reason to cancel your old credit card, however, you may want to think twice before you close the account.
Closing a credit card could hurt your credit score because it may increase your credit utilization ratio. Credit utilization (aka the relationship between your credit card limits and balances) is an important credit scoring factor which influences both FICO® Scores and VantageScore credit scores.
If you’re worried that you won’t be able to resist the temptation to overspend on an old credit card after a balance transfer, closing the account might be worth considering. Likewise, you might consider closing an account or perhaps downgrading if you’re paying an annual fee but not getting sufficient value from the card.
How much will a balance transfer cost you? It comes down to the balance transfer fee.
What happens to the new account when I pay off the balance?
You may open a new balance transfer credit card for the sole purpose of paying off your credit card debt. Yet even if that’s true, the account doesn’t go away once you pay off the balance on the credit card.
Most balance transfer credit cards feature no annual fees. So, it often makes sense to keep the account open after paying off the balance even if you originally opened the card as a debt consolidation tool. Having multiple credit cards (especially cards with zero balances) could make it easier to maintain a lower credit utilization ratio. And remember, a lower credit utilization is typically good for your credit score.
Even if a balance transfer card has an annual fee, it might make sense to keep the account open. But you’ll need to assess the benefits and rewards the credit card offers to see if the cost is worthwhile.
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Citi Double Cash® Card
BLUEPRINT RATING
Our ratings are based on specific use cases for each card. We compared this card to others in the same category and developed our rankings based on this criteria, along with our editorial input. Note that although we chose this card as the best in its category, the right card for you will depend on your own financial circ*mstances.
On Citi’s Secure Website
BLUEPRINT RATING
Our ratings are based on specific use cases for each card. We compared this card to others in the same category and developed our rankings based on this criteria, along with our editorial input. Note that although we chose this card as the best in its category, the right card for you will depend on your own financial circ*mstances.
Welcome Bonus
Earn $200 cash back after you spend $1,500 on purchases in the first 6 months of account opening.This bonus offer will be fulfilled as 20,000 ThankYou® Points, which can be redeemed for $200 cash back.
$200 cash back
Annual Fee
$0
Credit Score
Credit Score ranges are based on FICO® credit scoring. This is just one scoring method and a credit card issuer may use another method when considering your application. These are provided as guidelines only and approval is not guaranteed.
Fair, Good, Excellent
Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases. Plus, for a limited time, earn 5% total cash back on hotel, car rentals and attractions booked on the Citi Travel℠ portal through 12/31/24.
Editor’s Take
Pros
- No annual fees.
- Introductory APR period on balance transfers.
- Excellent cash-back rewards.
Cons
- Charges foreign transaction fees.
- There’s a balance transfer fee.
- Few additional benefits.
The Citi Double Cash® Card is a top-notch choice for everyday use, due to its simple and generous rewards. Plus, the card’s lengthy introductory APR period on balance transfers makes it a great option for those who need to consolidate debt.
Card Details
- Earn $200 cash back after you spend $1,500 on purchases in the first 6 months of account opening. This bonus offer will be fulfilled as 20,000 ThankYou® Points, which can be redeemed for $200 cash back.
- 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. Plus, for a limited time, earn 5% total cash back on hotel, car rentals and attractions booked on the Citi Travel℠ portal through 12/31/24.
- Balance Transfer Only Offer: 0% intro APR on Balance Transfers for 18 months. After that, the variable APR will be 19.24% – 29.24%, 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).
When does it make sense to do a balance transfer?
It’s wise to take an honest look at both the pros and cons of balance transfer credit cards before you decide if this debt consolidation option could work for you. Once you review the benefits and drawbacks, a balance transfer could make sense under the following circ*mstances:
- You can save money on interest charges by moving debt to a credit card with a 0% introductory APR (even counting the added cost of a balance transfer fee).
- You’re confident you can avoid future overspending on your credit cards.
- Your good credit might help you qualify for a solid balance transfer credit card offer.
Will a balance transfer affect my credit score?
A balance transfer credit card has the potential to affect your credit score, just like any other type of account that shows up on your credit report. Yet how a balance transfer impacts your credit score comes down to several factors.
If you open a new balance transfer credit card and use it to consolidate other credit card balances, your credit score might benefit. In this scenario, the new credit card could decrease your credit utilization ratio which tends to be good for your credit score.
On the other hand, if you open a new balance transfer credit card and make late payments on the account, your credit score could decline. Likewise, if you make late payments on the original credit card after a balance transfer, your credit score might also go down. You still have to manage all of your credit obligations in a responsible manner after a balance transfer if you want to earn or maintain good credit scores.
How to do a balance transfer
Below are the basic steps of the balance transfer process.
- Apply for a new balance transfer credit card or initiate a balance transfer request on an existing credit card account. Review the terms and conditions to understand any balance transfer fees, when the promotional APR period ends and other important details.
- Verify the original creditor (or creditors) receive payment. Check both your credit card statements and credit reports to make sure your old credit cards reflect the correct balance after moving debt to your new account.
- Repay your debt. Make a plan to pay off your balance transfer before the 0% or low-APR period expires, if possible. Doing so will help you make the most of your reduced interest rate and could help you get out of debt faster.
Best 0% APR balance transfer cards to consider
The best balance transfer credit cards feature 0% introductory APRs for an extended period of time. Balance transfer cards often come with no annual fee as well, and some may feature extra perks like modest rewards or welcome bonuses.
Below are the top balance transfer credit cards to consider if you’re in the market for this type of credit card product.
| Card Name | APR | Annual fee | Welcome bonus | Rewards |
|---|---|---|---|---|
| Citi Double Cash® Card | 0% intro APR on balance transfers for 18 months. After that, the standard variable APR will be 19.24% to 29.24%. An intro balance transfer fee of either $5 or 3%, whichever is greater, applies to transfers completed in the first 4 months. After that, the fee will be 5% of each transfer (minimum $5) | $0 | $200 cash back after spending $1,500 on purchases in the first six months of account opening | 2% cash back on purchases — 1% when purchases are made and another 1% when they’re paid off, plus, for a limited time, 5% total cash back on hotel, car rentals and attractions booked on the Citi Travel℠ portal through 12/31/24 |
| Chase Slate Edge℠*The information for the Chase Slate Edge℠ has been collected independently by Blueprint. The card details on this page have not been reviewed or provided by the card issuer. | 0% intro APR for the first 18 months on purchases and balance transfers, then a variable APR of 20.49% - 29.24% applies. An intro transfer fee of either $5 or 3% of each transfer, whichever is greater, applies on transfers made in the first 60 days. After that, a fee of either $5 or 5% of each transfer, whichever is greater applies | $0 | None | None |
| Bank of America® Customized Cash Rewards credit card | 0% intro APR for 15 billing cycles for purchases and for balance transfers made within the first 60 days, then a 18.24% to 28.24% variable APR applies. A 3% intro balance transfer fee will apply for the first 60 days; then a 4% fee applies to future balance transfers | $0 | $200 cash rewards bonus after spending $1,000 on purchases in the first 90 days of account opening | 3% cash back in the category of your choice, 2% cash back at grocery stores and wholesale clubs (on up to $2,500 in combined choice category/grocery store/wholesale club quarterly purchases) and 1% cash back on all other purchases |
| Wells Fargo Reflect® Card*The information for the Wells Fargo Reflect® Card has been collected independently by Blueprint. The card details on this page have not been reviewed or provided by the card issuer. | 0% intro APR for 21 months from account opening on purchases and on balance transfers made within the first 120 days, afterwards a 18.24%, 24.74%, or 29.99% variable APR applies. There’s a balance transfer fee of 5% with a $5 minimum | $0 | None | None |
| Citi Simplicity® Card*The information for the Citi Simplicity® Card has been collected independently by Blueprint. The card details on this page have not been reviewed or provided by the card issuer. | 0% intro balance transfer APR for 21 months from the first transfer and 0% intro purchase APR for 12 months from account opening. After that, the variable APR will be 19.24% to 29.24%. There is an intro balance transfer fee of $5 or 3% of the transfer, whichever is greater, for transfers made in the first four months. After that, a balance transfer fee of either $5 or 5% of each transfer, whichever is greater, applies | $0 | None | None |
Frequently asked questions (FAQs)
How a balance transfer impacts your credit primarily depends on your actions. If you make late payments on your new balance transfer credit card, for example, then your credit score is likely to decline after a balance transfer. Likewise, if you overspend and increase your credit card utilization ratio after a balance transfer, your credit score might decrease as well.
However, if you always pay on time and keep your credit card balance-to-limit ratio low, your credit score might improve after a balance transfer.
Balance transfers can take a few days to a few weeks to process, depending on the credit card issuer. As a result, you should monitor your old credit card account until you confirm that the balance transfer has been processed and continue making at least the minimum payment due in the meantime to avoid late payments.
It’s also smart to review your credit reports after a balance transfer to make sure they update properly. (Note: Credit report updates could take a few months to process.)
If you don’t have a good reason to close your old credit card, consider keeping the account open. Closing a credit card has the potential to damage your credit score. But if you choose to keep your old credit card open, it’s important to manage it in a responsible manner. Otherwise, the account could lead to credit score and financial problems down the road.
In general, card issuers don’t set restrictions regarding how many accounts you can pay off with a single 0% APR credit card. But other rules may apply. For example, you can’t exceed your credit limit during a balance transfer and you must leave room for the balance transfer fee as well. Additionally, you usually can’t transfer a balance from one card to another if both accounts are from the same card issuer.
*The information for the Chase Slate Edge℠, Citi Simplicity® Card and Wells Fargo Reflect® Card has been collected independently by Blueprint.The card details on this page have not been reviewed or provided by the card issuer.
