More often than not, the convenience of the best credit card can turn into a liability. We understand that sometimes, you are not able to keep up with the monthly balances and expenses. You choose to snip off your credit card. But, the right way to cancel a credit card is not through the scissors.
There is a lot more involved in the process than merely cutting it off into two. It does not only require you to follow specific steps for closing off the credit card account- but the right way will ensure that your credit score does not suffer through any damages. To that effect, we bring to you the following manual which can help you cancel a credit card successfully:
- 1 Your Guide To Cancelling Your Credit Card:
- 1.1 You can use the following steps for canceling your credit card:
- 1.1.1 Step 1: Start by looking for the customer service department that you need to get in touch with
- 1.1.2 Step 2: Remember to redeem all of your pending rewards
- 1.1.3 Step 3: Pay off your remaining balance so that your credit card does not get impacted
- 1.1.4 Step 4: Give your bank a call
- 1.1.5 Step 5: Send a letter to close the credit card, so that it is in the official record
- 1.1.6 Step 6: Keep a check on your credit report to ensure that the card has been cancelled
- 1.1.7 Step 7: Dispose of the credit card by snipping it into two pieces
- 1.1 You can use the following steps for canceling your credit card:
Your Guide To Cancelling Your Credit Card:
You should be well aware that when you close an account right away, it make take a little time. You would also need to organize your finances directly and figure out a way to ensure that none of the balances negatively impact your credit score.
Additionally, it is also ideal to keep a record of people you spoke to and when. This way in case you get charged or something goes wrong, you would know about all the facts in the picture.
You can use the following steps for canceling your credit card:
Step 1: Start by looking for the customer service department that you need to get in touch with
There are some details regarding your credit card, which are crucial. You would need to note down these details when you want to close your account. Before you begin the entire process of closing the account, you would need to note down these details.
Right from the customer service number to the mailing address, you will need all of it. The customer service executive will ask you for details, and it is good to have it handy when you want to shut off the account. In general, also it is an excellent practice to keep all your records. This helps you get quick help whenever you need a credit card issue addressed.
Step 2: Remember to redeem all of your pending rewards
The next step is to ensure that whatever accrued points are, you make use of them. Especially when it comes to rewarding cards, it is quite common to lose the gathered points and then lose them.
But, when you plan a little ahead, then it would be possible to minimize this loss. Keep a check on your rewards balance. Also, keep a tab on the redemption procedures on the website of the issuers.
If you are not able to use these points for merchandise and travel, then there may be a provision where you’d be able to use this in your statement credit.
The best cards to consider when it comes to redemption include cashback credit cards. They have the simplest of redemption features. Most of them, however, would need you to have a threshold. 20 USD to 25 USD is usually the average limit required.
You can redeem this for a statement credit then some cashback programs accrue cash only once on a yearly basis. It is best to be aware of the redemption rules before you consider canceling the credit card. This helps you plan well in advance and cancel a credit card as per convenience.
Step 3: Pay off your remaining balance so that your credit card does not get impacted
It is also essential that you pay off your entire credit card balance in full before shutting off the credit card. Snipping off your credit card does not mean that the balances will go away. The interest will keep piling up, and you would need to keep spending a lot more money to clear off the necessary money that you owed.
If you are unable to pay the full balance, then we recommend you to find a balance transfer credit card that has favorable terms. We also recommend that you contact the issuer and then ask the card to be frozen until the balance gets cleared.
However, if you transfer your balance from one to another, then you would need to pay off the full amount within a stipulated duration (typically two months) so that the charges don’t accrue.
Step 4: Give your bank a call
This is quite an obvious step in the procedure. Once you speak to the customer care executive, ensure that your credit balance is reflecting zero. Don’t just assume that since you paid all your recent bills, it is zero. Interest may keep accruing between the duration where you received the bill, and you made the payment. This leftover amount is usually referred to as residual interest.
Once you are sure that the balance is reflecting no dues, then you can inform them about your cancellation request. Some credit card companies may help you cancel the amount even without speaking to an executive, others may not give you the same convenience.
In case, you do meet resistance, then stay firm on your request. For people who want to close the account, being decisive about it is crucial. Your provider will pursue you to stay with the credit card and may even lure you into better offers. However, you are the best decision-maker and in case, it does get too much for you to handle, then it is ideal that you close off the credit card.
Step 5: Send a letter to close the credit card, so that it is in the official record
There is always a risk of your customer care executive, making a mistake regarding your cancellation. It is ideal for writing a short letter to whomever the issuer is so that you have written confirmation in hand for the closure of the account.
Include all essential details in this letter right from the name, the phone number to the address as well as the account number. You can also add an additional clause requesting the credit report to mention that the credit card was closed at your request.
Along with this letter, mention the details of the check number. Also, put a copy of payment verification as well as the cancelled check. You can use this to pay off the credit card balance. Keep a copy of this letter for your records so in case there is some confusion later, you can see it. Send this letter from a service that provides you with a return receipt.
Step 6: Keep a check on your credit report to ensure that the card has been cancelled
Once all of the steps mentioned above are undertaken properly, all you need to do is wait. Sit tight and wait for the official cancellation. Sometimes, getting cancel a credit card may take longer than a month. Keep your last statement handy.
Post this, keep a tab on your next statement. After this time, ensure that your account can be closed. Remember to pull the free copy of the credit report for the year. You can get this report from- Equifax, TransUnion, and Experian- al three. You can also get a free credit report from any of these bureaus or go for an external service.
In case the account is still reflecting as open; then you would need to repeat the process. Call the customer care executive or go to the bank with your request details and get it sorted. Even after this, if they fail to shut the account, then file a dispute so that you avoid getting scammed. You can approach the Consumer Financial Protection Bureau for the same
Step 7: Dispose of the credit card by snipping it into two pieces
Once the entire cancellation process is complete and the closed account is reflected on the statement, then you can finally discard the card. We would highly recommend that you see videos and check how your plastic and metal card can be destroyed. This would help you delete all the details. This would leave these details untraced and help the information stay away from hackers and ID thieves.
In case you do decide to pick up scissors, ensure that you cut out all the essential information. He includes your CVV, card number, signature, and expiry date. You can check multiple videos on how to destroy a credit card.
We also want you to remember that snipping off a credit card should not be a significant cause of concern for you. If you are in the market to get a new mortgage loan, then ensure that it does not result in impacting your credit scores.