Cancelling your credit card can be a highly tricky and a time consuming affair as you can have bills from the cancelled credit card still arriving at your doorstep. Although you might have cancelled the credit card from your side by simply chopping it into two, the decision to cancel the credit card may not have been communicated to your respective bank. It is thus important to understand and comply with the exit procedure of the bank, in order to have a smooth departure from your credit card experience. Once you have made a decision to cancel your credit card, you need to clear all your pending dues, including all charges that have not yet showed up on your bank statement. With this step, the bank will accept your request of termination. Another option would be to communicate your decision to exit from the credit card of the bank by submitting a letter in writing, with your credit card, which has to be returned with immediate effect.
The credit card will then be defaced by cutting it into pieces of four, along the magnetic strip, after which you may inform the call centre of your bank, following confirmation that you do not have any pending dues against the card, thereby confirming its deactivation. Often, many customers complain that in spite of writing letters to the bank and informing the call centre to cancel their credit card with immediate effect, they continue to be bombarded with charges on dead cards. This communication gap can be attributed to the fact that the customer may still have outstanding charges for the use of the card. Also, customers often see the cancellation of a credit card in response to a disputed transaction or when the annual fees are charged to their account, after they receive a bill reflecting their dues. Many customers may wrongly implicate the bank claiming that they have been wrongly charged with dues. In such a scenario, the bank and the customer must try to come out with a solution to the problem together, instead of indulging in the blame game. In the normal course, banks have no power to deactivate a customer’s credit card until all dues have been settled by the credit card user.
Thus, as a prudent user, you need to first clear all outstanding dues on your credit card before merely cutting and disposing it. Otherwise, you will continue to receive bills for the pending amount on your “dead” card. While customers may often worry thinking that such disputed transactions on credit cards with banks may dent their credit rating, this is not the case as credit rating involves evaluation of various factors like the number of loans you had applied for earlier, the number of loans you are currently responsible of and their repayment records, the total debt on your existing credit card; if you are holding any; your financial discipline, income and other parameters. But it is also equally important to ensure that you plan out your debt repayment wisely so that in future if you require to borrow further debt like a home loan or any other loan, no financial record can in the way for your loan application to be processed.
Thus, in order to have a smooth exit procedure from your credit card, first of all, acquire a clean chit on your transactions with the bank. You must clear all existing dues at the earliest to avoid any penalties and fines on the existing credit card. Take time to think about it clearly before cancelling your card, as it should not be done merely as an act of impulse.