How to cancel a credit card is, in and of itself, pretty simple. Just call the credit card issuer, patiently wait while the customer service representative tries to talk you out of it, and then politely reaffirm that you’re moving on.
Really, it’s like any other breakup.
But like all breakups, closing a credit card account shouldn’t be done in haste. And if you do ultimately decide to close, it’s better to go the responsible rather than reckless route.
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How To Close a Credit Card
Closing a credit card can be completed in six steps:
1. Check your credit score
Closing credit card accounts can damage your credit score (more on that below). If you have a high score, you can likely endure a temporary credit hit, but if you have weaker credit, even a minor drop can be significant.
If you’re planning to apply for a major loan soon, your credit score might be the deciding factor in whether your application is approved. And your score has a direct influence on your overall borrowing costs as well.
If homeownership is within your sights and your score is less than 757 (the average FICO score for mortgagors), consider keeping your credit card account open for now.
You can check your credit score for free with each of the credit bureaus: Equifax, Experian, and TransUnion. Or you can use a free service like Credit Sesame or Credit Karma.
However, if your credit card doesn't charge an annual fee, there's no harm in keeping it open, even if you never use it. The length of your credit history is a factor in your score, so accounts that are open for a long time are a good thing.
2. Move automatic payments
If you decide to close the credit card account, you’ll need to cancel recurring payments and set them up with another payment method.
Go through your card statements for the last 13 months and note each recurring payment you see. That way, you won’t forget any monthly or annual charges and risk losing a critical service or having an account sent to collections.
3. Redeem rewards
If your credit card is co-branded with an airline or hotel chain, any points you’ve earned will likely be safe even if you cancel your credit card.
But if your credit card rewards are tied to the card's in-house rewards program, you may be given a limited window of time after closing your card.
The better-safe-than-sorry approach is to redeem all your points before you close. And if your credit card gives you bonus points or another benefit on your annual card anniversary, consider closing only after you’ve reached that milestone.
RELATED: How To Get the Most Out of Credit Card Points
4. Pay your balance
Although you can close a credit card while it still has an outstanding balance, interest will continue to accrue on that balance, and you’ll need to continue making on-time payments.
Pay the balance off before canceling so that you eliminate the possibility of missing a payment and taking a hit to your credit score.
If you don’t have enough money to pay off the balance in full before canceling, consider transferring the outstanding debt to a card with a 0% annual percentage rate (APR) promotion.
This will give you more time to pay the balance off without having to worry about additional interest charges.
5. Contact the credit card issuer
How to cancel a credit card will vary from issuer to issuer, but you can likely cancel credit card accounts through a few different channels:
- Online: Not all card issuers allow you to cancel online. But those that do may provide a form you can fill out on their website or offer a live chat where you can cancel.
- Phone: Be prepared for the customer service representative to provide some sort of special offer (which may be worth hearing out) in a last-ditch effort to keep your business.
- Branch: It may be convenient to cancel in a brick-and-mortar branch if your credit card company has them. But keep in mind that it’s likely going to be harder to say “no” to an actual person sitting across a desk.
- Mail: If you’re not in a rush and you’d like to dust off some envelopes, you can close a credit card via old-school post. You may want to send your request as a certified letter so you can ensure it's received.
No matter how you make the request, always ask the issuer to send written confirmation of the closed account, including information about any lingering amounts owed.
This will alert you to any residual interest that may have been charged between your last billing cycle’s closing date and your last payment.
If the confirmation can only be sent via mail, double-check that the issuer has your current address. Once you receive the confirmation letter, take a photo and save it.
6. Confirm and dispose
Wait 45 days and allow the card issuer to update your account info with each credit bureau. Then, request free copies of your credit reports to ensure the card is marked as “closed.”
When your card still shows up as being active on any of your credit reports, or if a report indicates there’s still a balance on the card after you paid it off, file a dispute with the relevant reporting agency.
If your card is made of plastic, cut it up with household scissors. Metal may have originally been mailed to you with a prepaid return envelope for disposal. Otherwise, you can return metal credit cards to a branch or mail them to your card issuer.
You can also get in touch with a crafty artist or jeweler friend and see if they can lend you a pair of tinner snips.
Does Closing a Credit Card Hurt Your Credit?
Closing a credit card can affect three key credit score factors:
- Credit mix: The best credit scores are awarded to people who have both revolving credit products, like credit cards, as well as installment products, like a mortgage or auto loan. If you cancel your only revolving credit product, that makes the mix on your credit report less diverse and hurts your credit score.
- Credit utilization: Your credit utilization ratio refers to the balances you have on all your revolving credit accounts. Closing a credit card automatically reduces your available credit limit, which increases your utilization rate and can potentially damage your score.
- Credit history length: Credit scores factor in the ages of all accounts on your credit report. The older your accounts, the better your score will be. So think twice before canceling one of your oldest cards.
Alternatives to Closing a Credit Card
There are potential benefits to keeping a credit card open, even if you've struggled with credit card debt in the past.
“Due to the negative credit scoring impact, we don’t always advise closing a card,” says Thomas Nitzsche, a financial educator for the nonprofit credit counseling agency Money Management International (MMI).
“Credit cards also provide protections and rewards that other payment methods may not.”
Before canceling a card to control your spending or cut annual fees, consider some other ways to address these issues.
Build barriers to prevent overspending
Nitzsche suggests creating spending blocks if you’re worried about misusing your card.
“We might encourage a client to make it harder for themselves to impulse-buy,” he says. “Some of our clients have even gone as far as to freeze their cards in ice.”
If creating a credit card popsicle isn’t your style, there are less drastic measures at your disposal.
“These might include not carrying a credit card on you, not linking your online shopping apps to a line of credit, or setting a very low daily spending limit on the card,” says Nitzsche.
Negotiate your credit card's terms
If you're canceling your card due to high annual fees or APRs, communicate these reasons to your card's customer service reps.
They might be willing to reduce the interest rate or waive the annual fee for a year.
Downgrade to a different credit card
Trying to trim your budget? Ask your issuer about changing to a no-annual-fee credit card. That move is unlikely to affect your credit score because:
- Your utilization won’t change, provided you get the same credit limit for the new card.
- Changing products instead of closing the account keeps your credit mix and history length stable, minimizing potential negative impacts.
RELATED: When and How To Upgrade Your Credit Card
FAQs
Is it bad to cancel a credit card?
It isn’t bad to cancel a credit card if you’re trying to get out of a credit card debt. But closing a credit card may be bad for your credit score, particularly if the credit card is the only source of revolving credit you have, it’s the oldest account on your credit report, or closing it will push your credit utilization ratio above 30%.
What happens when you close a credit card?
When you close a credit card, you’ll receive your final card statement, and you’ll no longer be able to use the card to make purchases. Your credit reports will mark the account as closed. If closed in good standing with a history of on-time payments, it remains on the report for up to 10 years.
Can I reopen a closed credit card?
You may or may not be able to reopen a closed credit card, as the decision is ultimately at the card issuer’s discretion. Issuers are more likely to reopen a card if it was closed in good standing, but less likely if it was closed for delinquency or agreement violation.
TL;DR: How to Cancel a Credit Card
Before closing any credit card, check your credit score and consider the impact on your credit utilization, credit mix, and account age. Pay off the balance completely, redeem all rewards, and update any automatic payments first.
Or, instead of closing, consider downgrading to a no-fee version or negotiating better terms. Your account history affects your credit score, so if you're not losing any money by keeping the card open, it may be better to just leave it, even if you don't use it.
If you must cancel, get written confirmation and verify the closure appears correctly on your credit reports after 45 days.
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