How to Properly Cancel Your Credit Card
Master the full process of credit card cancellation. This guide ensures you handle every detail for a secure and informed account closure.
Cancelling a credit card requires careful planning and execution. This article guides you through the necessary steps and considerations to ensure proper cancellation, avoiding potential pitfalls.
Preparations Before Cancelling
Before initiating any cancellation, pay off the entire outstanding balance on the credit card, including any pending transactions. Some issuers require a zero balance to close an account, and maintaining a balance will continue to accrue interest charges even after you request closure.
Redeem any accumulated rewards, such as points or cash back. Many credit card reward programs state that any unredeemed rewards are forfeited upon account closure. This step ensures you maximize the value from your card before it is closed.
Identify and switch any automatic bill payments or subscriptions linked to the credit card. Updating these payment methods to another card or bank account prevents service interruptions and missed payments.
Closing a credit card can affect your credit score. Your credit utilization ratio, the amount of credit you use compared to your total available credit, may increase if the closed card reduces your overall credit limit. The average age of your credit accounts could decrease, especially if the card is one of your oldest. Consider these impacts, particularly if you plan to apply for new credit in the near future.
Ensure you have other active credit options or a sufficient emergency fund before closing a primary or sole credit card. Relying on a single card for all credit needs can be risky; an alternative provides financial flexibility and helps maintain a healthy credit mix.
Steps to Cancel
Contact the credit card issuer to formally request account closure. The most common method is to call the customer service number on your card or the issuer’s website. Some issuers may also offer online chat or secure message options.
When contacting the issuer, provide your account number and personal identification details to verify your identity. State your intention to close the account permanently. The representative may inquire about your reasons for closing or offer incentives to retain you as a customer.
You are not obligated to accept any retention offers. Politely decline these and reiterate your request for cancellation. Ask for a confirmation number for the closure request.
Request a written confirmation, such as an email, stating the account has been closed with a zero balance. This documentation serves as official proof of cancellation and can help resolve future discrepancies.
After Cancellation
After confirming the account closure, physically destroy the credit card to prevent any unauthorized use. Cutting the card into multiple pieces, ensuring the magnetic stripe, chip, and account number are severed. Discarding the card intact could pose a security risk.
Continue to monitor your final credit card statements for a few billing cycles. Verify the balance remains at zero and no lingering charges or credits appear. A final statement may be issued to confirm the zero balance. Any discrepancies should be promptly reported to the issuer.
Check your credit report after a few months to ensure the account is reported as closed with a zero balance. You can obtain a free copy of your credit report from each of the three major credit bureaus annually. Confirming the accurate reporting of the closed account helps maintain the integrity of your credit history.