What happens to your old credit card after a balance transfer?

What happens to your old credit card after a balance transfer?

First things first – your old credit card doesn’t automatically close after a balance transfer. It stays open, and you'll either have:

• £0 balance – if you transferred the entire balance from your old card, you’re now free to either keep the card open or close it

• Leftover balance – if your new card’s limit wasn’t high enough to take on the full amount or you chose not to transfer it all, you’ll have some debt remaining on the old card. This means you’ll still need to pay off whatever’s left on there before you can close it.

Check out our handy guide on how to pay off your remaining credit card debt.

Can you still use the old credit card?

Yes, you can still use your old card. But before you go on a spending spree, remember:

• You’ll still have to make at least the minimum payments every month

• If you did the balance transfer because a 0% interest period had ended on the old card, you’ll now be charged interest if you don’t off the full balance of your old card each month

• The more cards and accounts you have, the trickier it can be to keep track of things.

Quick tip

Set up a direct debit to cover at least the minimum monthly payments. That way, you’ll avoid late payment fees (usually around £12 a pop). Just make sure there’s enough money in your account each month to cover the payment.

Should you cancel your old credit card?

This depends on what’s most important to you – having lots of available credit, maintaining your credit score, simplifying your finances? We’ve listed the benefits and drawbacks of closing the old card below.

Advantages of cancelling the old card:

• With less credit available, the risk of spending more than you can afford to pay back is reduced

• Budgeting and tracking your spending can be easier with fewer cards to manage

• If the card has an annual fee, you’ll save on that.

Disadvantages of cancelling the old card:

• Your credit utilisation rate (the percentage of available credit that you’re using) will go up, as you’re losing the available balance on the old card – this can harm your credit score

• The average age of your accounts will go down, especially if you’ve had the card for a long time – this can also impact your credit score

• You’ll lose any perks the card offers, such as rewards or fee-free overseas spending.

Learn more about cancelling a credit card.

What happens to your new credit card after paying off the balance?

Once you’ve managed to pay off the debt that you transferred, you can choose whether to keep the new card or close it. The pros and cons we listed above will also apply to your decision here, so use those to help.

One other key consideration will be the interest rate that applies on purchases made using the card. Some cards offer 0% on balance transfers but charge a higher rate on any new spending.

So, if your purchase rate is 0% or relatively low, it might be useful to keep the card. But if it’s higher than what you could potentially get from a new card, consider checking which other products you could be eligible for.

Check your credit card eligibility

Quick tip

Stay on top of what accounts you have open and what credit is available to you by checking your credit score. You can do this for free with any UK credit reference agency. The big three are Equifax, Experian, and TransUnion.

Alternatives to closing an unused credit card

Hesitant to close your old card? You could think about:

• Keeping it open but unused – this can help maintain your credit score and utilisation rate without adding new debt

• Using it sparingly – make a small purchase every now and then and immediately pay it off in full. This helps show you can manage credit responsibly without building up lots of debt