Will transferring a balance from a credit card get it closed?

January 24, 2018 1:46 AM

I currently have two credit cards with roughly similar balances and one-time windfall that can pay off one of them. Hurray! But I’m worried if my plan to pay off one and balance transfer from the other will backfire into the card company closing a card. Details below the fold.

One card, A, is a premium card from rhymes-with-base that I use for daily expenses. The other, B, is a card with a good balance transfer offer that I intend to pay down over the course of months. I could pay A and then pay down B while B accumulates interest. Alternatively, I could pay off B, balance transfer from A, and then pay off B but without interest for a while. I worry, though, that because A is a premium card and it’s issuer is anecdotally capricious they’ll close the account. I don’t want that because it’s a good card for my spending and I have a lot of points I don’t want to lose.

Is them closing the card something I should worry about? Or am I worried about nothing?

posted by anonymous to Work & Money (12 answers total)

I don't know either of your providers, but flipping a balance between two cards is very common practice, and IMHO unlikely to set off any alarms.

My experience is that shortly after I clear a balance on a given card, that provider will contact me with a reasonably attractive balance-transfer offer, to encourage me to put a balance back on it. Because I've done that a couple of times now, I have two different providers who are offering similar balance-transfer terms. So, as soon as the 0% deal expires on one, I transfer whatever balance is left to the other, and pay it down there for the duration of their current offer. Repeat as needed, ideally with minimal-to-zero spending on the card that's currently taking a break - otherwise you'll never get ahead of your debt if you're still accruing it.

The assumption here is that your credit rating & payment record is sufficiently good for both providers. But on the whole, keeping a balance for a while and then paying it off makes you their dream customer.
posted by rd45 at 2:07 AM on January 24, 2018 [4 favorites]

I've never had a card closed, but I did once have a company drop the limit drastically on a card I'd had near max for some time, paying minimums only, after I paid it off with a loan. Maybe call them and ask?
posted by corvine at 4:24 AM on January 24, 2018 [1 favorite]

In my experience (US-based) the only time a company has closed a card is when there's been no activity on it for a set period of time (multiple years). They have sent a letter in advance of closing the account asking me to indicate if I do not want it closed.
posted by theorique at 6:15 AM on January 24, 2018 [3 favorites]

Isn’t the Card in question, Card A, the one you use for daily purchases? If so, they’re making money via fees charged to retailers, et al, even if you aren’t carrying a balance and paying interest. They’d rather you paid interest, of course, but they’re still making money from your account, so why close it?

Incidentally, depending on the balance transfer fee with Card B, you may be better off paying Card A with your windfall, and continuing to pay down the current balance on Card B.
posted by notyou at 6:41 AM on January 24, 2018

They won't close a card without inactivity for a long time. It's in their best interest that the credit line remain open.

They may reduce your maximum.

Anecdotally, I've had a Discover card for 8 years that I've never used. They just closed it January 2nd.
posted by teabag at 7:13 AM on January 24, 2018

A good solution is to transfer the balance, then set up a recurring payment on the card that automatically pays itself: so transfer the balance from Card A to Card B, then set up Netflix, a gym membership, or something small and recurring to charge to the empty card every month with an auto-pay for the balance.

So you're keeping the card active, paying a bill you would be paying anyway, and appearing to pay off the balance every single month.
posted by blnkfrnk at 7:53 AM on January 24, 2018 [2 favorites]

I've never had a card from the issuer that rhymes with base closed for paying it off / transferring the balance away. I've done it more than once. They have only ever closed a card on me for non-use.
posted by rabbitrabbit at 8:02 AM on January 24, 2018

I also recommend doing a balance transfer from A to B. Continue to use A for your regular spending and pay it off in full each month, while paying off the balance on B interest free.

I did this (with card A also from "base") and it worked beautifully - that's still my main card, and I never carry a balance 2 years later. However, I stopped using B (from rhymes with "bapital none"), and after about 18 months of no use they restricted my card. I could have jumped through some hoops to open it again, but opted to close it instead. I assume that if I'd followed blnkfrnk's advice and put some recurring payment on it it would have been fine.

I also recommend using YNAB to track them and set your goals for paying off B before the balance transfer offer expires.
posted by Kriesa at 8:16 AM on January 24, 2018

I have also never had a company close a card and have done this twice.
posted by aspersioncast at 8:53 AM on January 24, 2018

Some people pay their balances in full every month. The issuers do not close the cards.

In doing the math, don't forget to include the transfer fee card B almost certainly charges, even if it's a 0% interest offer.

(I'm a little bit concerned that you are even thinking about points and multiple cards when you are carrying balances. Until you are able to pay your balances in full routinely each month, the credit card benefits game is not for you. You should just be using the lowest interest rate card you can find from a reputable company. Precisely because of the points, the rhymes-with-base card probably has a higher interest rate than you could get elsewhere. My rhymes-with-base card is at 17% for purchases even though my credit is excellent. So...a transfer to a 0% interest-offer card is good for now, but, in the future, you should be looking for a regular-use card with interest as low as it can be. Points and such only work for people who are lucky enough to not have to carry balances [and are motivated to exploit the system]. For everyone else, they're poison apples.)
posted by praemunire at 9:16 AM on January 24, 2018 [2 favorites]

Oh, if only it were that easy! I have closed numerous zero-balance credit cards over the last two decades and it invariably takes months of playing whack-a-mole with customer service to close them for good, despite my very specific instructions to close the credit card and the underlying line of credit. So you are in no danger of having your card closed just for zero balance. There used to be sneaky inactivity or dormancy fees but they have been made illegal so you have nothing to worry about there either (annual fees are still legal so make sure your card doesn't have one).
posted by rada at 11:10 AM on January 24, 2018

I have 6 credit cards from different issuers and i pay them all off every month and some go many months without use. I have never had one closed. The one tie i did have a card close, it was a Victoria's Secret credit card that I opened to get a promotional 20% off or something and then never used again. They closed it after 3 or 5 years of inactivity.
posted by WeekendJen at 10:12 AM on January 25, 2018