Before you pick up those scissors to snip away at your Credit Card, you must follow a process to safely close your Credit Card account. Let’s tell you about it, shall we?
Before you pick up those scissors to snip away at your Credit Card, you must follow a process to safely close your Credit Card account. Let’s tell you about it, shall we?
When is it a good idea to close your Credit Card?
The best way to stop using your Credit Card is to put it away and not carry it around. A Credit Card is awesome if you use it well. But it is true that some are better than managing it. If you feel you’re using it unnecessarily and would be better off without one, you might want to consider closing it.
Okay, your credit habits are good, but you find that the annual fee doesn’t justify the benefits you’re getting or you’re just not using it enough – that’s another good reason to consider closing your Credit Card.
Before you close your Credit Card
While a Credit Card may expire and need to be replaced, a Credit Card account doesn’t. The older your Credit Card account is, the better your credit history will be. This impacts your Credit Score. If you’ve had a Credit Card for over 10 years with a good repayment history, closing this account may hurt your Credit Score.
Let’s take you through the process of closing a Credit Card account
If you’re decided on closing your Credit Card account, here’s your step-by-step guide:
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Contact Customer Service
To initiate the closure of your Credit Card account, make a note of the card issuer’s Customer Service number. (Psst. You’ll find this on the back of your Credit Card). Give them a call and clue them in.
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Redeem rewards on your Credit Card
When you want to close your Credit Card, you will end up losing some reward points that were accumulated on your account. Plan carefully and you can at the most, minimise the loss. Check your reward points balance and learn about the redemption process. This will help you plan the redemption of your rewards points before you close your Credit Card account.
Additional Reading: Credit Card Balance Transfer
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Clear the Credit Card dues
It is best to close your Credit Card account on a clean slate. Unless you want large red remarks in your credit report, avoid closing your Credit Card in a dispute. Clear any outstanding dues on your card.
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Tell the card issuer about closing the Credit Card account
After ensuring that your Credit Card dues are at zero, remember to pay off any residual interest that may show in your bill. Then tell your card issuer about your decision to close your card account.
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Send a letter requesting closure of your Credit Card account
Just to be on the safe side, make your Credit Card account closure official with a letter to the card issuer.
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Wait for confirmation
Wait patiently for the card issuer to send you a letter confirming the closure of your Credit Card account.
Hope that helps. So a Credit Card isn’t really your cup of tea? Go ahead and explore other options!
Additional Reading: When Not To Use A Credit Card