If you ever thought that canceling a credit card is that simple as scratching it in two, then you were absolutely wrong. First of all, you should know that there are some cases in which you should not ever think about canceling your credit card; in other cases, closing your old (and, as we can suppose, uhow to cancel your credit card, firstly you should know the cons of closing your credit account. Only then we can start speaking about the pros of this decision.nused) credit account can help you to avoid paying fees. Before you start thinking about
When you start considering closing your credit card, the first think you should think about is: how old is that credit card account? If the answer is one year or more, then take in mind that, canceling that credit card, you are losing all your credit history for that account. And that means that, the next time you ask -for example- for a loan, there will be no credit history at all where the lender could check your credit score… unless you have more than one credit card, in which case just try not to close the oldest one of the cards.
Apart of the obvious -if you close a credit card, forget about that credit account-, there is also more reasons to forget (or, at least, think twice about it) canceling a credit card. Apart of the risk of losing (or hurting) your credit score, take also in mind that the less credit cards you have, the less options will you have to get money in case of needing it. It will be always better to use your credit card than asking for a loan, at least when we are speaking about small amounts of money.
And, lastly but not leastly, also take in mind that, by closing your credit card, you will lose any customer deals and rewards you could get with that card. Remember all that reward points you got in the last year? Say goodbye to them. Some credit cards are also tied to offers and discounts when paying -for example- for gas, so be sure to check if that is not your case.
Then, when (and why) should I cancel my credit card?
But nothing we said until this point means that you should not cancel a credit card at any reason: of course, there is a lot of reasons to close your credit card account. The first one is just one simple word: temptation. If you start the month thinking that you have a few hundred dollars in your credit account, you are more likely to end up spending that money, which means you are spending more than you can afford to. If that is your case, don’t think more about it: go and cancel your credit card.
The next reason can also be resumed in one word: fees. Some entities apply monthly (or annually) fees for the credit cards, even if you don’t use it, so and the end of the month (or year) you will be charged for this for the only convenience of having that credit card. It can be only ten or 15$, but it can also end up being 300, 400 or 500$, depending on the credit card. The only way to avoid this credit card fees when you don’t use that credit card, is closing the account.
And, of course, never forget about the risk of identity theft: the more credit cards you owe, more likely are you to being part of a identity theft in which someone else can end up using your card without your permission. If you only use one credit card, and you are aware of this risk, it will be less likely to happen to you.
How to cancel a credit card
Now that you have no doubts about the pros and the cons of this decision, it’s time to move on. Forget about cutting up the card: that means nothing in terms of canceling a credit card. It’s not that easy, and the first thing you must do is calling the customer service number, which you can for sure find at the reverse of the card. But even before you call the customer service, don’t forget to pay the balance of the card in full, as you can’t close or cancel a credit card until the balance is paid. When you speak with the customer service, explain the reason you want to cancel the card, and follow the instructions you will get in the call.
It depends of the bank if you will have to send a letter asking for the closing of the credit account. But even if you are not asked to do so, being a little bit extra cautions in this case it’s not a bad idea, so send a cancellation letter to the card issuer and include the account number, your name, your phone, the date, and, of course, an explicit request of canceling the credit card. This will be really useful if the card issuer tries to charge your for fees after you have canceled your account.
If you have been using in the last months the credit card you are about to cancel, don’t forget to check if you have any recurring payment tied to the card. Cancel that payment before you cancel the card (you don’t want to lose your Netflix account, right?), or at least be sure to change the card number of the invoice before it’s too late.
Be patient: cancelling a credit card can take a few weeks
Now that you have ordered the cancelling of the credit card, the best thing you can do is to hide the card and just wait until receiving the letter that will confirm you that you have closed successfully your credit account. It can take a few weeks, even more than a month, so be patient.