What happens to a credit card when the company goes out of business?
Matthew Harrington
Updated on February 15, 2026
First, let’s look at what does not happen when a card issuer closes: your debt does not go away. Even if the company closes, you still have to pay your credit card balances off completely. It could transfer to a new bank or issuer, who you will pay going forward, but otherwise you can keep the account and card.
How can I get my credit card to stop charging interest?
5 Ways to Reduce Credit Card Interest
- Pay off your cards in order of their interest rates.
- Make multiple payments each month.
- Avoid putting medical expenses on a credit card.
- Consolidate your debt with a 0% balance transfer card.
- Get a low-interest credit card for future spending.
Can a closed credit card still be charged?
Yes. The bank may charge you for interest and fees that were assessed before you closed your account. Review your account agreement for information on how finance charges are calculated on your account, or contact your bank.
What happens to my credit card if bank closes?
In addition, if a credit card is closed due to inactivity, you may lose card benefits or accumulated rewards. Please note that a closed account isn’t immediately removed from your credit reports. Even if you paid the account as agreed, it can remain on your reports for up to 10 years.
Can you get charged interest on a zero balance?
You won’t be charged interest on your purchases if you started the billing cycle with a zero balance or you paid your last statement balance in full. You’re also not charged interest on balances with a 0% promotional APR. If you pay the full balance before the grace period expires, you won’t pay any interest.
Why do credit card issuers stop charging interest?
Almost all card issuers stop charging interest when they charge off a debt. That’s because continuing to charge interest would mean having to send monthly statements to cardholders, under the U.S. Truth in Lending Act. Besides, the uncollected interest inflates the lender’s losses.
Do you still have to pay interest on a closed credit card?
Will you still have to pay interest? Your credit card issuer won’t stop you from closing your credit card while it still has a balance, but closing the account doesn’t relieve you of interest payments. If that were the case, people would habitually close their credit cards just to get out of paying interest.
Can a credit card company stop you from closing an account?
Your credit card issuer won’t stop you from closing your credit card while it still has a balance, but closing the account doesn’t relieve you of interest payments. Once you close an account, you’ll continue to be charged regular interest until you’ve reached a zero balance.
How does interest work on a credit card?
A credit card allows you to charge up to the credit limit set on the card. The outstanding balance represents what you owe. Interest is charged on the balance if you don’t pay in full and choose to pay only the minimum amount due in your monthly statement.
