Yes, you can close a credit card that still has a balance. The card stops working for new purchases, but the debt stays, along with interest and the monthly minimum payment, until you pay it off. Closing it usually makes your credit utilization look worse, and it can cost you any rewards you haven’t redeemed.
Here’s what changes when you close it, what doesn’t, and the order to do things in.
What happens when you close a card with a balance? #
- New charges stop. Purchases, cash advances and balance transfers from the card are blocked. Any subscriptions or autopays billed to it will start failing.
- The debt remains. You owe the balance, plus interest and fees, under your cardholder agreement.
- Interest keeps accruing. Unless the balance is on a 0% promotion, you’ll keep paying the card’s regular APR on what’s left.
- Minimum payments continue. You’ll keep getting statements and must pay at least the minimum by each due date. A missed payment is reported just as it would be on an open card.
- Rewards may disappear. Many issuers forfeit unredeemed points when a card closes. Some let you move them first.
Under federal rules, an issuer generally can’t require you to repay a closed account faster than your existing terms allow. You can keep paying it down on a normal schedule.
How does closing a card affect your credit score? #
Credit utilization usually gets worse #
Utilization is your total balances divided by your total credit limits. It’s part of the “amounts owed” factor that makes up about 30% of a FICO score, per FICO. Closing a card removes its limit, but not its balance.
Say you have two cards:
- Card A: $2,000 balance on a $5,000 limit
- Card B: $0 balance on a $5,000 limit
- Overall: $2,000 of $10,000, or 20%
Close Card B and you’re at $2,000 of $5,000, or 40%. Close Card A instead, and its $2,000 balance now sits against a limit that no longer exists. Scoring models handle a closed account with a balance in different ways, and some may treat that card as heavily used. Either way, your overall number rises until the balance is gone.
Credit history mostly stays #
A card closed in good standing can stay on your credit report for up to 10 years and keeps counting toward your length of history during that time. Late payments stay for seven years from the delinquency. What you lose over time is an open account that ages. We cover that in what happens when you close your oldest credit card.
What should you do before closing a card? #
- Redeem or move your rewards. Transfer points to another card in the same program or redeem them. Once the account closes, they’re often gone.
- Move recurring charges. Check the last few statements for subscriptions, insurance premiums and utility autopays, and switch them to another card.
- Check for an annual fee refund window. If you’re closing to avoid a fee that just posted, timing matters. Chase generally refunds a fee if you cancel within about 30 days of it being billed. Amex refunds it if you cancel within 30 days after the closing date of the statement showing the fee. After that, you may get nothing back.
- Consider a downgrade instead. A product change to a no-fee card keeps the limit and the account’s age while ending the fee. See how to downgrade a credit card to avoid the annual fee.
- Confirm how you’ll get statements. Ask whether online access stays on and where to send payments.
- Get written confirmation that the account was closed at your request.
Most people close a card because an annual fee arrived that they didn’t plan for. Credit Card Central reminds you 30, 7 and 1 day before each card’s renewal, which gives you time to redeem points and choose between keeping, downgrading, calling for a retention offer or cancelling. When you decide, you log the outcome so you remember what you did. Its utilization bands also show how your wallet-wide number changes when a limit disappears, based on the balances and limits you enter.
How do you pay off a closed card’s balance? #
Keep paying, more than the minimum #
The simplest path. Minimum payments on a card at typical APRs mostly cover interest, so pay as much above the minimum as you can.
Move it to a 0% balance transfer card #
If your credit is still good, a new card with a 0% introductory APR on balance transfers can stop the interest while you pay it down. Expect a one-time transfer fee, often 3% to 5% of the amount. You can usually transfer a balance away from a closed card using its account number.
Consolidate with a personal loan #
A fixed-rate personal loan can pay off the card, often at a lower rate, with a set end date. Your card balance drops to zero, which usually helps your utilization right away.
If you’re carrying a balance and wondering whether your rewards are still worth chasing, see credit card rewards while carrying a balance.
Frequently asked questions #
Does closing a credit card stop interest charges? #
No. Interest continues at the card’s regular APR until the balance is paid in full or moved to a lower-rate option such as a 0% balance transfer.
Can a credit card company close my account while I owe money? #
Yes. Issuers can close accounts for missed payments, inactivity or changes in your credit. You still owe the balance under your original terms.
Will paying off a closed card raise my credit score? #
Usually, yes. As the balance falls, your overall utilization drops, and lower utilization tends to help your score.
Can I transfer a balance from a card that’s already closed? #
In most cases, yes. Give the new issuer the closed account’s number and the amount, and keep making payments on the old card until the transfer shows as complete.
What happens to a refund that posts after I close the card? #
The issuer applies it to your balance, or sends you the money if it leaves a credit. More in what happens to a refund on a closed credit card.