How to Cancel a Credit Card

There may be a variety of reasons you have for wanting to cancel you credit card. You simply want to stop going into more credit card debt, and canceling your card would help you accomplish that goal. Perhaps you have a card you simply no longer use, or one that charges an annual fee you no longer want to pay. Whatever your reason, there are some things to consider before canceling a card and some simple steps to take once you decide that canceling a credit card is your best option.

Prior to closing the account, consider the possible effect it could have on your credit. FICO looks at several factors to determine a person’s credit score, including the amount of available credit they have and the length of their credit history. By closing a credit card account, you reduce the amount of available credit you have. If you close an old account, you can also eliminate some of the credit history you have on file with the credit bureaus. Both of these actions can result, at least for a while, in a lower FICO score.

If you want to cancel your credit card here are a list of steps to help you with the process:

Suggested Steps to Canceling Your Card

  • Know who to contact: To begin the process of closing the account, start by getting all the customer service numbers and the mailing address you need. You can locate the appropriate customer service number on the back of the credit card, on your monthly statement or on the company’s website. When you make your call be sure to have sufficient amount of time to be on the phone without interruptions.
  • Pay your balance in full: Closing your credit card while it has a balance might not be the smartest thing to do. You should pay off your credit card in full before you let the card issuer know you’re canceling it. This will keep them from raising the rate on you because your canceling the card. Keep in mind you also have the option to find a balance transfer credit card with a good deal and transfer the balance.
  • Inform the company: Always confirm your balance is zero and do not assume. Just because you paid the total amount of your last bill doesn’t necessarily mean your balance is zero. Call the customer service department and have them confirm the balance for you over the phone. Remember that interest continues to accumulate between the time the issuer sent the bill and when they received your payment. Explain your reasons for canceling your card. Companies do not want to lose good customers and maybe they will make you an offer that will change your mind about canceling.
  • Send a letter: There is nothing wrong with taking extra precautions, especially when it comes to your credit. Send a written request to the bank asking them to close our account and to send you a confirmation once the account is closed. The letter should include all your basic information such as: your name, address, phone number and account number. It is also a good idea to state in the letter that you want your credit report to reflect that the account was “closed at the consumer’s request.
  • Take notes: Everyone has probably heard of or ever had an unfavorable customer service experience. It can be a good idea to keep track of who you talk to and when. It is okay to keep thorough notes on who you spoke to and what they said. Be sure to confirm what will appear on your credit report. Even if you cancel your credit card voluntarily, the creditor is still required by law to report this information to the credit bureau.
  • Request a Confirmation Letter: A confirmation letter is an additional step you can take so you have proof that you canceled your credit card. You can always ask for the creditor to send the letter via certified mail.
  • Follow Up: After you have allowed for a reasonable amount of time for your account to be closed you should check your credit report to make sure the account is marked as “closed”. In the event you find the account is still open, you should call customer service and explain the situation. Remember you always have the option of asking for a supervisor if you think something is not going as planned.