No, a balance transfer does not cancel a credit card. You are not required to close the account once a balance transfer is complete, either. It may actually be a good idea to keep your old credit card account open, even if you don’t plan on using it. Closing a credit card account after a balance transfer could have a negative effect on your credit score.
When you close a credit card, it reduces your total available credit and drives up your utilization ratio. It’s best to maintain a debt level of less than 30 percent of your total credit limit. Also, the average age of your accounts may decrease, particularly if you close a card that you’ve had for a long time. Potential lenders like to see a lengthy history of credit accounts when reviewing applications for additional credit. You can review some helpful tips on cancelling a credit card without hurting your score.
The exception to the rule, when it comes to cancelling a credit card after a balance transfer, is if the card has an annual fee. You could pay the fee once a year to keep the card active. Or, if you don’t plan on using the card anymore, you may consider closing the account to save money.
If you’re considering credit cards that cater well toward balance transfers, feel free to take a look at some of the best ones.
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