🚀 Our new App is live!  Signup

💳 The best offers for May! Details 

Advertiser Disclosure

Advertiser Disclosure

Although we put in a lot of effort to give our readers unbiased information, and we include many credit card offers on our website for which we do not get paid any compensation, we are legally required to notify you that we may be receiving compensation from some of the credit card companies mentioned on our website.

Some of the credit card offers which appear on helpmebuildcredit.com are from credit card companies from which this site possibly receives compensation. This compensation may impact how and where credit card offers appear on this site. This site possibly does not include all available credit card offers.

 

Close

Can I Close A Credit Card With An Open Balance?

- May 8, 2022 Credit Card Info0 comments

Firstly, the answer is… yes! Absolutely! You can close a credit card even if it has an open balance. 

Will my credit be affected?

Having a closed account with an open balance may affect your credit because credit models look at credit utilization a lot, which is how much percent of your credit limit you’re using (never use more than 9%). If you have a closed account with an open balance, then your utilization will obviously be above 100%, which may be very damaging to your credit.

If you’re only closing the credit card because of a high APR, then you might want to rather balance transfer the open balance to one of these great 0% APR credit cards, before closing the card. Make sure though, that you apply for a new card before you close the old one because once you close the old card, your credit will be damaged and you might not get approved for the new card.

Tip

Keep in mind that when you close an account you might lose reward points that you have accumulated on the account, so make sure to cash the points out before closing the account.

Can a credit card issuer close my account with an open balance?

Yes. Even if you still have an open balance, credit card issuers have the right to close the account if they suspect fraud, if you have a sudden drop in your credit score, or for any other reason they decide to close you down. But even if they have the right to close your account, they don’t have the right to change the APR you’re paying, for as long as it takes for you to pay up the balance.

If you get closed down by your credit card issuer for any reason while you still have an open balance and your credit is affected by the high utilization, then this is what I recommend. Either pay up the balance as soon as possible, or you can balance transfer the balance to an open credit card with a limit of at least above 300% percent of your balance.

Frequently asked questions
If I close a credit card with an open balance, how will it count for utilization?
A closed credit card with a balance is automatically considered a maxed out balance
What happens if I return an item on a closed credit card?
The money can still be refunded to your closed account. You will receive a check from the credit card for the refund
If I close my Amex Platinum Business card but I have other Amex personal cards open, do I lose my points?
As long as you have a card open that is part of the membership rewards program then you will not lose your points (no difference between personal and business)

Was this article helpful?

avatar_logo
Sam Sam has nearly a decade's worth of experience educating his many readers on everything credit. Sam spends his days checking out credit cards for a full report, from the minute benefit details to the shebang of welcome bonuses. Plus studying the ins and outs of building proper credit. It’s his favorite pastime and he loves sharing it with others.

Leave A Comments

This site uses Akismet to reduce spam. Learn how your comment data is processed.

0 Comments

Recent Posts

Follow us

Click here to subscribe to
our WhatsApp channel

Today's
best offers

The Business Platinum Card from American Express

Earn 200,000 points after spending $20,000 within the first 3 months.

more info

Capital One Venture X Business

Earn 150,000 miles after spending $30,000 within the first 3 months.

more info

Ink Business Preferred Credit Card

Earn 100,000 points after spending $8,000 within the first 3 months.

more info

American Express Business Gold Card

Earn 130,000 points after spending $10,000 within the first 3 months (terms apply).

more info

You May Also Like

Credit Card Disputes – Know Your Rights

Credit Card Disputes – Know Your Rights

The main benefit as for why I always use a credit card, wherever possible, is because of the option it provides for disputing a charge. It gives me an unexchangeable feeling of security that if something goes wrong I can always dispute the charge. I get asked many...

read more
New Sapphire Preferred Offer. 75k Points!!

New Sapphire Preferred Offer. 75k Points!!

The offer on the card_name just popped up to 75,000 points after spending $4,000 within the first 3 months. There is also an 85k offer available in Chase branches but for that offer you need to spend $6k. (Usually, Chase will match the in-branch offer even if you...

read more
News You May Have Missed Over Yom Tov

News You May Have Missed Over Yom Tov

Yom Tov has come and gone. While you were busy celebrating you may have missed some credit card news that happened within the last 2 weeks. First off, we want to apologize for the posts that regretfully went out on Chol Hamoed / Yom Tov. The posts were pre scheduled...

read more
Credit Card Grace Period Explained

Credit Card Grace Period Explained

We all know that we don’t pay interest on credit card purchases until after the credit card due date. But do you know why? You may answer that the credit card issuers want you to use your credit cards, so it doesn’t make sense for them to charge you interest. That is...

read more
success_icon

Download link sent
succesfully

Got it * please check your promotional inbox
fail_icon

Error sending download link

Try Again