Does a balance transfer cancel the old card?

Does a Balance Transfer Close the Old Card?

A balance transfer is a financial transaction where you move outstanding debt from one credit card to another. It can be a useful strategy to consolidate debt, reduce interest rates, or take advantage of introductory offers.

Does a Balance Transfer Cancel the Old Card?

No, a balance transfer does not automatically close your old credit card. When you perform a balance transfer, the debt is transferred to the new card, but the old card remains active. This means that you:

• Retain the old card: You will still have the physical card and can use it to make purchases or access your account.
• Have the option to continue using it: If you choose, you can continue using the old card as usual, subject to the terms and conditions of your account.
• Can discontinue its use: You can stop using the old card if you prefer. This will not affect the balance transfer or the status of your account.
• Can close the account: If you no longer wish to have the old card, you can contact the issuer to close the account.

Why Keep the Old Card?

There are several reasons why you might want to keep your old credit card after a balance transfer:

• Maintain credit history: A closed account can negatively impact your credit score. Keeping the old card open helps maintain the length of your credit history.
• Emergency backup: The old card can serve as a backup in case your new card is lost or stolen.
• Additional credit line: The old card can provide you with an additional line of credit, which can be useful for unexpected expenses.

When to Close the Old Card

Closing the old credit card after a balance transfer is usually not recommended, but there may be some situations where it makes sense:

• To avoid temptation: If you are concerned about overspending and want to avoid using the card, closing it can be a wise choice.
• To improve credit utilization: Closing the old card can reduce your overall credit utilization, which can improve your credit score.
• To consolidate accounts: If you have multiple credit cards, closing the old card can help you simplify your finances.

Conclusion

A balance transfer does not automatically close your old credit card. You have the option to keep it, continue using it, or close the account. The decision depends on your individual circumstances and financial goals. If you are unsure whether to keep or close your old card, it is advisable to consult with a financial advisor.