How to cancel a credit card

How to cancel a credit card

Have you ever found yourself in a situation where you did spend your hard earned money irresponsibly? What did you do to remedy the situation? When in such situation, do not just cut the credit card but also cancel them out.

Canceling a credit card give you time to learn and regain responsible ways of spending money. Even if you do not have trouble with spending, you may still want to cancel your credit card and close your account time with time. Learning how to cancel a credit card is quite easy, as explained below.

Close one account at a time.

If you have several accounts that you intend to cancel, it is better to cancel them systematically. The first credit cards to withdraw are the once that charge you hefty for transactions. Also, it is advisable to cancel new cards before the old ones since some old credit cards might contain good reward programs.

Pay off balances before canceling.

Before canceling a credit card, it is essential to ensure you pay off existing balances. If you are not in a position to afford the payment at the moment, you can transfer them to the current card.

When you contact the issuer to cancel the card for you, make sure that there is no balance in the card. Also, ensure you cash out all the rewards you had accumulated all along.

Call the customer service department

Canceling a credit card starts at the customer’s service department. The customer service number is always at the back of your card, on your bill report sheet or over online form. Once you contact the customer service, let them know your intention.

Since the customer service would want to verify your details, it is advisable to have the card with you, a recent receipt for paid bills and your id number. Also, give reasons why you intend to cancel your account.

Consider the offer

Generally, no financial organization does like losing customers. When you call customer services desk request to cancel your card, there usually gives you an offer such as the low-interest rate for you to remain their client. Sometimes the offer may be or may not be worth to consider depending on the reasons why you decided to cancel the card.

Considering the offer entails weighing out what will change once you take it and remain clients to the company. If the offer is quite okay maybe you can consider canceling another credit card that has a limited offer.

Confirm the cancellation in writing

If you happen to succeed in canceling your account through a phone call, it is always essential to write a letter to the concerned company reinstating your statements. A letter ensures that the account is closed just in case the customer personnel attendant you talked to had not initiated the whole cancellation process.

The letter you send must include your name, address, and the credit card account number. Also, on the letter indicate the dates you requested for cancelation and the name of the respective customer attendant.

To ascertain that you had cleared all pending bills, you may need to attach a proof of your final payment. Lastly, on the letter request the company to send you a cancellation confirmation letter within a specified time.

Watch your credit card score

In most cases, canceling a credit card affects your credit score significantly. It is vital to cancel your card wisely by adhering to the following.

1). Pick the right time to cancel the card.

Always avoid closing an account if you are in the process of applying for another new credit card. Also if you are planning to take up a loan to buy a car or a house, wait until everything is finalized so you can proceed with the cancellation process.

2). Off-set the cancellation

To avoid hurting your credit score once you cancel a card, you may need to offset it by raising your credit limit differently. Increasing your credit limit keeps your credit utilization rate constant. You can always achieve the increasing plan by opening a new card or by requesting a balance increase on the existing card.

If your credit is good enough, but your balance is low, this should be less important. Closing your credit card should only have a slight impact on your credit score.

3). Follow up your credit report after cancellation

Usually, the credit report takes time before it reflects on the portal and before an email is sent to confirm the removal. Once you receive a letter confirming you canceled your credit card, the next thing you should do is to write a letter requesting for a credit report. The credit report should indicate that the card is closed and that it was not closed by the issuer as it would look bad to other creditors.

If the credit report is negative, be sure to contact the customer service desk to rectify the problem.

Also read: What is the highest credit score

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