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How to cancel a credit card

With care, you can close an account without hurting your credit score


Anyone can take scissors to a credit card, but it takes skill to cancel a card without nicking your credit score. Here’s everything you need to do in order to cancel a credit card successfully — in eight steps.

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As helpful as credit cards can be, they can also be a source of stress. Whether you struggle with managing credit card debt or making payments on time, or simply have an older card you no longer use, you may find the idea of canceling your credit card brings you a sense of relief.

Before you pick up your scissors, though, know this — canceling a credit card the right way involves more than simply snipping it in two. You need to follow specific steps to close the credit card account in a way that causes the least damage to your credit score.

Here’s everything you need to know to successfully cancel a credit card.

Steps to cancel your credit card

There are a few steps you’ll need to take to ensure your credit card account is actually closed, that you don’t miss out on any rewards you earned and that you paid off the card in full. Follow these steps so you’ll do it correctly:

Pay off any remaining balance

Pay off your credit card in full or, if you can find a balance transfer card with better terms, transfer the balance. You can’t completely close a card until the balance is paid.

If you don’t want any more charges accrued to the card until the balance is paid, you can contact the issuer and ask them to freeze your card until you’ve cleared the balance and closed it.

If you normally carry a balance, you’ll need to pay the full statement balance two months in a row to wipe it out and stop further interest charges from accruing.

Redeem any remaining rewards

In the case of rewards cards, you will probably lose some of your accrued rewards when you close the card. But with planning, you can minimize the loss. Check the rewards balance and redemption options on the issuer’s website. If you are unable to apply them to travel or merchandise, you may be able to take accumulated miles or points as a statement credit.

Cash back credit cards generally have the easiest redemption options. However, many require rewards to reach certain thresholds — typically $20 or $25 — before you can redeem for a statement credit.

A few cash-back programs award accrued cash only once a year, on a predetermined schedule. Knowing the rules for redemption will allow you to plan how to cash in on your hard-earned rewards before you cancel the card.

Update payment method on recurring charges

If you use your credit card to make any recurring payments (like a Netflix subscription or a cell phone bill), it’s best to update all of those payments with a different credit card or payment method before you cancel the card. That way, you won’t accidentally miss any payments.

Call your bank

Before you cancel, make sure you call your bank to confirm that the balance on your credit card is zero — don’t assume it’s paid off because you paid the total amount on your most recent bill. Interest may have continued to accumulate between the time the issuer sent the bill and you made your payment, and that “leftover” amount is called residual interest.

Once you’re certain the balance is zero, inform the issuer that you’re canceling the card. While some credit card companies will allow you to cancel without even speaking to a representative, others may require a phone call.

If you are met with resistance, hold firm. It is your right to close the account. Tell the rep you want it noted that the account is being closed at your request.

Ask for a name and address you can write to with a notice of your card cancellation and note this along with the call details, including date, time and a way to identify the representative you spoke to.

Request card account closure

For added insurance (in case the customer service rep makes a mistake), write a short cancellation letter to the card issuer and request written confirmation of the account’s closure.

The letter should include your name, address, phone number and account number — and details from your earlier phone call. Also, state that you want your credit report to reflect that the account was “closed at the consumer’s request.”

Along with the letter, include the check number (or a copy of the canceled check or other payment verification) that you used to pay off your account balance.

Make a copy of the letter for your records. Send the letter via certified mail or with a return receipt requested so you can prove the issuer received your letter.

Check your credit report to confirm the cancellation

Now it’s time to sit tight. Getting the card canceled may take a month or more. After that time, take a look at a copy of your credit report to make sure the account is marked as “closed.”

You can pull a free copy of your credit report once a year from each of the top three credit bureaus (Equifax, Experian and TransUnion) at AnnualCreditReport.com. If the account appears open, repeat the process: Call the customer service number to report the mistake, follow up with a letter by certified mail (including a copy of your original letter requesting that the account be closed) and then check your credit report again.

If that fails, you can file a dispute through one of the three credit bureaus (they are required to notify the others). And if that doesn’t work, you can file a dispute with the Consumer Financial Protection Bureau.

Dispose of your card

After documenting the cancellation process and making sure that your credit report reflects the closed account, you are finally free to discard your credit card. There are a few ways to destroy your plastic or metal card, but you’ll need to pick a disposal method that leaves your information completely unrecoverable from identity thieves.

If you do decide to pick up the scissors, make sure that you are cutting each bit of information including your card number, CVV, expiration date and signature.

Although it may be worth temporarily holding off on closing a credit card if you are in the market for a new loan or mortgage, canceling a credit card shouldn’t be a source of major concern for consumers with good credit, since the impact on their credit scores is likely to be minimal and temporary.

Does closing a credit card hurt your credit?

Before closing any credit card account, you need to consider the possible effect on your credit score. Just because you cancel a credit card doesn’t mean that its payment information comes off your credit report right away.

In the case of open accounts, positive credit data can stay on the credit report indefinitely. Closed accounts with zero balances and no associated negative information typically remain on a credit history for 10 years from the date they are reported closed.

Most bad marks on your credit report have a quicker expiration date. Under the Fair Credit Reporting Act, negative data such as late payments and foreclosures must come off the credit report after seven years.

In addition, potential lenders take into account the amount of credit still in use once a card and its associated credit limit gets canceled. That’s because credit bureaus and lenders are interested in your balance-to-limit ratio, also known as your credit utilization ratio, which compares the amount of credit being you’re currently using to the amount of total credit available to you.

Depending on your total available credit, closing a credit card account with a high credit limit could hurt your credit score, particularly if you have high balances on other cards or loans. To make sure closing one card doesn’t impact your score, pay off the balances on all your other cards. If you have zero balances, your credit utilization rate is zero, so won’t be impacted by the loss of a balance.

When does closing a credit card make sense?

The first question to ask yourself before canceling a card is, “Do you really need to cancel it? Or would it be better to just put it away and not use it?” Having an available line of credit on a card with no balance always helps your credit score, and it could come in handy in an emergency or if its terms improve in the future.

There are two situations, however, when closing a credit card is called for:

You can’t control your spending and need to remove the temptation

If you struggle with spending — especially impulse spending — you may find that having a credit card enables you to make more purchases than you can afford. If you can’t pay off your balance each month, you’ll end up with high interest debt on your hands. Using a debit card may be a better fit for someone who likes the convenience of a credit card but who struggles to stick to a budget.

You’re paying an annual fee for a card you don’t use

Some credit cards come with an annual fee. This fee can be worth paying if you use the card enough to earn a lot of rewards and if you take advantage of all of its perks. If you have a credit card with an annual fee and you no longer use it, however, it makes sense to cancel it.

Bottom line

Closing an account the right way takes a little time, patience and organization. As you go through the process of canceling your credit card, make sure you keep thorough notes on who you spoke to, what they said and when. That way, if anything goes wrong, you’ll have all the facts handy.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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