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

By   |   Verified by Bill Ryan Natividad   |   Updated 29 Sep 2023

Balance transfer credit cards in Australia

If you're wondering what happens to your old credit card once the balance has been transferred from it, the short answer is nothing.

Read on for more detail on what your options are and how it works.

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Key takeaways

  • After a balance transfer, your old credit card does not automatically close. One bank cannot instruct another bank to close an account.
  • Closing an old credit card can reduce the risk of spending more and getting further into debt.
  • Keeping your old card open might improve your credit score because of a lower credit utilisation ratio.

Does a balance transfer close your old card?

When you balance transfer from your old card to a new credit card, your old credit card will not be closed automatically. One bank can't tell another bank to close an account.

Since limits apply to how much can be transferred to your new card, it is possible that your old card will still have an outstanding balance.

Do you have to close your old card after a balance transfer?

No. You can keep your old card open or close it after a balance transfer has been processed. The decision is yours to make.

Should you close your old card after a balance transfer?

Whether you should close your old card or keep it open depends on your person circumstances.

If you just want to reduce your interest and get out of debt, or can't trust yourself not to spend on your new card — or worse, both cards — then closing the old card could be beneficial overall.

However, if you are disciplined, you may wish to keep your old card since the credit could be useful or you may be using it to earn points. Bear in mind that in having two credit cards, there will likely be two annual fees to pay.


Keeping your old card open

  • Improves your credit utilisation ratio because you have the same amount of debt with a higher combined credit limit.
  • Increases the possibility of racking up more debt because now you have two cards to spend with.

Closing your old card

  • Stops from getting further into debt instead of using a balance transfer to get out of it.