Do you lose points if you transfer balance?

Mythbusters: Do Balance Transfers Steal Your Rewards Points?

The allure of a 0% APR balance transfer offer is strong. It promises significant savings on interest payments, a tempting proposition for anyone carrying credit card debt. But many cardholders hesitate, fearing the transfer will somehow jeopardize their hard-earned rewards points. The question is: do you lose points if you transfer your balance?

The short answer is: no, not unless you close the account.

Transferring a credit card balance is simply moving your debt from one card to another. It’s like shifting money from one bank account to another; the money itself doesn’t change, just its location. Similarly, your rewards points are tied to your credit card account, not the specific balance on that account. The balance transfer process doesn’t affect the existing points you’ve accumulated.

Think of your rewards points as a separate entity, a bonus earned for spending, distinct from the debt you carry. The balance transfer only impacts the outstanding debt; it has no bearing on your accrued rewards.

Maintaining Your Rewards: The Importance of Keeping the Account Open

To retain your hard-earned rewards, the key is to keep your original credit card account open. Closing the account, regardless of whether you’ve transferred the balance, will likely forfeit your accumulated points. Most credit card issuers have terms and conditions that stipulate point forfeiture upon account closure.

Therefore, before initiating a balance transfer, carefully consider the terms of both your current and the new credit card. Understand the implications of closing the original account and the potential loss of rewards. If you need to consolidate debt, a balance transfer can be a financially sound strategy, provided you manage your accounts responsibly and avoid closing the original card prematurely.

In summary, a balance transfer is solely a debt management tool. It doesn’t diminish your rewards unless you make the mistake of closing the account that holds those rewards. Keep your original card open, transfer your balance strategically, and enjoy the benefits of both debt reduction and your accumulated rewards.