Are you thinking of how to cancel a credit card? Well, we’ve got all the answers you need. However, you must take some time to think about the consequences of such a decision thoroughly. This article will go in-depth on how to cancel a credit card. So read on!
Does Canceling Your Credit Card Harm Your Credit?
Canceling a credit card you have used for a while may harm your credit score. So, make sure to pay off all of the remaining balance before canceling your credit card. If you’re struggling to do so, seek help with credit card debt. Click the following link for credit card debt help. Below are five major factors that affect credit scores.
- Payment history;
- Amount owed;
- Length of credit history;
- Credit mix;
- New credit.
Let’s take a look at each of these factors in depth.
Payment history
To build good credit you have to make on-time payments. You can add a credit card to your Chase account to help keep track of all your transactions. If you think you cannot accomplish this, canceling your credit card might be an excellent option to prevent any future activity that might harm your credit score. However, if you currently owe a balance on your credit card, you will need to discuss with your issuer first how to close your credit card.
Amount owed
It is good to have a lower credit utilization rate. A higher rate could cause damage to your credit scores. Canceling your credit card may worsen the situation if it lowers your total available credit. To avoid any impact on your credit score, you might need to open another line of credit if you plan to cancel your credit card.
Length of credit history
A longer credit history is typically advantageous for your credit. Closing your credit card prevents your credit history from growing, negatively affecting your credit scores.
Credit mix
If you plan on closing your credit card and not opening another one, this could end up deleting revolving credit from your credit reports. This lessens the potential of creditors working with you.
New credit
Closing a credit card won’t affect your new credit unless you’re doing so to open a new one. Opening a new credit card may trigger a hard inquiry and negatively affect your score is short.
Steps to Cancel Your Credit Card
After some thorough research and thinking you’re still considering this option, well we will list the steps on how to execute this below:
Play off all remaining credit card balance
You do not want to have a balance due on a credit card you’ve closed, as you still have to pay this amount.
Cancel any recurring payments
If you have any recurring payments for any of your bills, you will need to update your payment information and cancel these.
Check if you have rewards to redeem
Check if you have any rewards that require redemption, as these sometimes expire upon closing an account. These three words can come in handy if you’re having trouble paying your unsecured debt. Redeeming these rewards towards a statement credit, you may be able to pay off the balance owed.
Contact your credit card issuer
Contact your credit card issuer to inform them about your decision to cancel your credit card. The contact details can be located on the back of your credit card.
Visit your credit card website
This option is available if you do not wish to speak with customer service over the phone. You might be able to cancel your credit card online by logging into your account.
Send a text or email
It’s always a good idea to contact your credit card issuer by text or email after canceling your credit card. This will come in handy if you discover that your card is still open after canceling it.
Check your credit reports
Do thoroughly check your credit reports to ensure they reflect that the credit card is canceled.
Cut up the credit card
Cutting up your closed credit card will ensure that no attempts will be made to use it after it has been closed. So, that’s how to cancel a credit card. Remember, you have to weigh your options thoroughly before making this decision. So, do analyze your situation and consider what’s best for you.
