Are you planning to close or cancel your Credit Card? Well, you should have a solid reason for doing so. Closing a Credit Card is more complex than cutting it in half. You should consider reaching out to the bank representative and understanding the process.
Using a Credit Card responsibly can be an effective way to ensure a secure payment gateway. Nonetheless, if you ever plan to close or cancel a Credit Card, you should learn how to do it. This blog will guide you on how to close or cancel a Credit Card.
How to deactivate a credit card?
Even if you're not using your Credit Card account, it is often advisable to keep it open. This plays an important role in improving your credit score. You may need to close or cancel your Credit Card in certain circumstances.
If you're cancelling or closing a Credit Card, you need to ensure that you do it only after checking everything to not hurt your credit score. Here are a few ways through which you can easily close or cancel a Credit Card:
Pay off the existing debt
Paying off your debt is advisable before you cancel your Credit Card. You may not be able to close the account if there is an existing balance. If you pay it off in full and cover the new charges, it will be easier to close the account. You should also pay off any existing balances.
If there is lingering debt, you should move the existing balance to a Credit Card with around 21 months of no interest. After paying the existing balance, you should update the subscription and automate payments via the new card. If the existing account is not closed, the payments will not be approved. It will also put the services and fees at risk.
Consult the bank
Consulting your bank is always a good idea before learning how to close a Credit Card. You can ask your representative to help you in the process. They will help you check for any remaining balance you may have missed out on. There might be a risk of residual interest rates if you were paying month by month.
You tell the representative to close your account permanently when you have a zero balance. Sometimes, the representative may provide a retention offer, but you should consider it thoroughly before you cancel it.
If you are adamant about cancelling the account, tell the representative you've considered the decision. Also, while cancelling the Credit Card, you must note the person's time, date, name, and mailing address.
Send a letter of cancellation
Sending a formal cancellation letter is also important when closing your Credit Card. Even when the representative has confirmed that they have closed the account, there is always a risk of glitches or mistakes. Your cancellation letter must mention that you're closing the account.
As a certified layer of protection, you should also include the letter to prove it was delivered. Once the letter is delivered, you should request written confirmation that the Credit Card account has been closed. You should also check that the account closed has a zero balance.
Redeem the rewards
It is always a good idea to redeem the existing rewards on your Credit Card. You must check for unused cashback, points, and miles. Redeeming these credits will provide you with a lot of rewards.
It is important to review the reward programmes on the cards thoroughly. This will help you understand how to close a Credit Card and its redemption terms. You can check the cashback Credit Cards and the accounts that are linked to them. Some cards may charge the minimum redemption amount as well.
Check the credit report before closing
Always check your credit report before you understand how to deactivate a Credit Card. This might be a time-consuming process because monthly reports will be submitted. Always check the reason mentioned in the Credit Card, whether it is 'closed at consumer's request' or 'closed by issuer'.
If the issuer closes the reason, you must contact your bank immediately and resolve the issue. Then, you can check your Credit Card report. It is advisable to check every 30 days to get the exact report.
Must Read: How To Earn And Redeem Credit Card Points
Why close the credit card?
Credit Card cancellation may not always be a good idea, but it is feasible for certain reasons. Before you learn how to cancel a Credit Card, here are some of the prominent reasons why you should consider closing your Credit Card:
High annual fee
Some Credit Card issuers charge a higher annual fee even if you don't use it. In such cases, cancellation can be helpful. You should carefully analyze the rewards and benefits and whether they outweigh the annual fee, like perks and credits. If you're getting better rewards, it may be worthwhile.
Before cancelling your account, consult your card issuer and ask them to waive the annual fee. You should also consider informing them that you are closing your Credit Card.
Too much temptation for spending
Spending with Credit Cards can be too hard to resist. If you are used to spending a lot using a Credit Card, closing the account can be worth it. Nonetheless, there is always a way through which you can reduce overspending and prevent reducing or hurting your Credit Card.
You can always consult your bank account representative to help you. If you do not have your Credit Cards readily available, it will be easier to resist the urge to overspend using your Credit Card.
Must Read: Various Types Of Credit Cards Available
Conclusion
You should only close your Credit Card if you have a good reason. It will not hurt your credit score even if you have too many Credit Cards. The only condition is that you must pay the interest charges occasionally.
But if you want to cancel your Credit Card, follow all the steps on how to cancel a Credit Card. If you are cancelling the Credit Card, try to reduce the balances. You must avoid credit score damage or minimize the risks as much as possible.
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