Can You Close a Credit Card With a Balance?
Discover the realities of closing a credit card with an existing balance, including your ongoing obligations and the process involved.
Closing a credit card account with an outstanding balance is possible, but requires careful consideration of your financial obligations. Understanding the full implications is important to manage your existing debt responsibly.
Understanding Your Financial Obligation
Closing a credit card account does not eliminate existing debt. The outstanding balance remains a legally binding obligation that you are responsible for repaying. Interest will continue to accrue on the unpaid balance, calculated according to the original annual percentage rate (APR) in your cardholder agreement.
Minimum payments will continue to be due monthly, as outlined in the terms of your credit card agreement. If payments are not made by the due date, late fees may be applied. These fees vary based on the card issuer and your payment history.
The cardholder remains bound by the terms and conditions related to the debt, even after the account is closed. This includes adherence to payment schedules. The issuer can pursue collection efforts if the debt goes unpaid.
The Process of Closing the Account
To close a credit card account with an existing balance, contact the credit card issuer directly. This can be done by calling the customer service number on your card or statement. Some issuers also allow you to close the account through their online portal or by mail.
When you contact the issuer, they will ask for information to verify your identity, such as your account number, full name, address, and potentially the last four digits of your Social Security number. They may inquire about your reason for closing the account, though you are not obligated to provide a detailed explanation. Clearly state you wish to close the account and acknowledge the outstanding balance.
After requesting closure, ask for written confirmation that the account has been closed. This confirmation can be sent via mail or email and documents your request and the account’s status. Receiving this confirmation ensures correct processing and provides a record.
Paying Down Your Balance After Closure
After your credit card account has been closed, you will continue to receive statements by mail or electronically until the full balance is paid off. These statements will detail your remaining balance, minimum payment due, and due date. Payments are still required to avoid penalties.
Payment methods remain the same. Payments can be made through the issuer’s online portal, by mailing a check, or by calling their customer service line. Establishing automated payments can ensure timely minimum payments and prevent late fees.
Continue tracking your remaining balance and review statements to monitor progress. Once the balance is paid off, you may wish to request a final confirmation from the issuer confirming a zero balance. This provides assurance that your obligation has been met.