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Can You Close a Credit Card Balance with a Credit Card?
July 1, 2025
Quick Answer
You can use a new credit card to pay off an old one, not by direct payment, but through a strategic balance transfer.
Should You Close A Credit Card Balance With A Credit Card?
Let's weigh the advantages and disadvantages of this debt management strategy.
Benefits of Paying a Credit Card with Another
- You can consolidate multiple credit card debts into a single monthly payment.
- A balance transfer may offer a lower promotional interest rate, often 0% APR.
- This introductory period provides a window to pay down principal without accruing interest.
Drawbacks of Paying a Credit Card with Another
- Most balance transfers come with a fee, typically 3% to 5% of the amount transferred.
- The new card's interest rate can be very high after the promotional period ends.
- It does not address the spending habits that may have led to the debt.
How to Close A Credit Card Balance With A Credit Card
Transferring a high-interest credit card balance to a new card can save you money and simplify payments. Here’s a general guide to navigating the process from start to finish.
- Assess Your Current Debt: Before you do anything, take stock of your existing credit card debt. Note the exact balance you want to transfer and, most importantly, the annual percentage rate (APR) you’re currently paying.
- Choose the Right Card: Find a new credit card that offers a low or 0% introductory APR on balance transfers. Ensure the promotional period is long enough for you to realistically pay off the debt. Tools like the Kudos' Explore Cards tool can help you compare options.
- Apply and Initiate the Transfer: Once you've selected a card, complete the application. If approved, you can usually request the balance transfer during the application itself or through your new online account shortly after approval.
- Create a Payoff Plan: The work isn’t over once the transfer is complete. Divide your total balance by the number of months in the introductory APR period to calculate your required monthly payment. Stick to this plan to avoid future interest charges.
- Manage the Old Account: After the balance is successfully moved, decide what to do with your old card. Keeping the account open with a zero balance can positively impact your credit score by maintaining your credit history and utilization ratio.
Impact On Your Credit Score
Closing a credit card can have several effects on your credit score, so it's important to understand the potential consequences. Here are the key factors to consider before you decide to close an account.
- Credit Utilization Ratio: Closing a card reduces your total available credit, which can increase your credit utilization ratio. A higher ratio can negatively impact your score, as lenders may see you as a riskier borrower.
- Length of Credit History: Closing an older credit card can shorten the average age of your accounts. A longer credit history is generally better for your score, so this could have a negative effect over time.
- Credit Mix: Lenders like to see a healthy mix of different credit types. If the card you're closing is your only revolving credit account, it could negatively affect this part of your score.
Alternative Ways To Close A Credit Card Balance
Balance Transfer Cards
One popular strategy is to use a balance transfer credit card. This involves moving your high-interest debt to a new card that offers a low or 0% introductory annual percentage rate (APR) for a specific period. This interest-free window allows you to focus on paying down the principal balance more quickly. It's crucial to be aware of any balance transfer fees and the interest rate that will take effect once the promotional period concludes.
Debt Consolidation Loans
A personal loan can be an effective tool for debt consolidation. By taking out a loan, you can pay off your credit card balance in full and then repay the loan through fixed monthly installments, often at a lower interest rate. This approach simplifies your payments into a single, predictable amount and provides a clear timeline for becoming debt-free, unlike the revolving nature of credit card debt.
Choose the Right Card to Close A Credit Card Balance
Navigating the sea of over 3,000 credit cards to find one that helps you tackle a balance can feel overwhelming. That's where Kudos comes in. Our free Explore Tool simplifies the process by asking what you're looking for—whether it's a balance transfer, low interest, or specific rewards—and then matches you with personalized recommendations. You can compare your top choices side-by-side to make an informed decision and find the perfect card to help manage and eliminate your balance.
If you want to get the most from your credit cards, Kudos is the essential free shopping assistant for your online purchases. We're also offering a $20 bonus after your first eligible transaction—just sign-up for free with code “GET20” and buy from a Boost merchant.
Frequently Asked Questions
Will paying off one credit card with another hurt my credit score?
It can cause a temporary dip due to the hard inquiry and new account lowering your credit history's average age.
What are the risks of a balance transfer?
Potential risks include transfer fees, high interest rates after the introductory period, and the temptation to accumulate more debt.
Are there alternatives to using a balance transfer?
Yes, personal loans for debt consolidation often provide lower, fixed interest rates and a structured repayment schedule.
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Editorial Disclosure: Opinions expressed here are those of Kudos alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.
