Cancelling Credit Cards – What You Should Know

A lot of people own more than just one or two credit cards. In the end, some may feel that they do not really need their other cards and may decide to close them out. Do you feel the same way too? Do you plan to cancel one of your credit cards? If yes, there are some things that you need to know before giving up on your credit card.

Understand your reason for cancelling.

Are you trying to cancel your credit card because you cannot catch up with your payments? If yes, that would be a big mistake. If you cancel your card with an existing balance, you will be inflicting very serious damage on your credit history.

What should you do with your credit card debt? If it’s not possible to pay off your full balance, meet up with the person in charge with the decisions (bank manager or supervisor) and try to negotiate your debts. Explain your present situation and request if some of your fees be waived or if your interest rates can be lowered so you can have a better chance at repayment.

You may also consider borrowing from friend or taking out a consolidation loan to pay your credit card debt and zero in your balance before cancelling the account. Whatever you do, don’t close it out without paying off your complete balance.

Do not close out an old account.

If you’ve had that credit card for a long time, it may not be a good idea to close it out. Why so? Obviously, your payment history on that credit card account makes up a large part of your overall credit rating. Closing it now would mean deleting the oldest parts of your credit history.

But what if your old credit card has a high rate of interest? You can still keep it without risking bad credit. Nevertheless, it will require self-discipline on your part to use your credit card only on small purchases that you can pay in full right away. Thus, you can avoid the interest rate fee while still keeping your account active.

Cancel your credit card properly.

The first step is to call your credit card company and make sure that you have a zero balance. Afterwards, inform the customer service representative that you want to close your account. The representative will try to talk you out of it so you need to be sure about your decision before making the call.

Aside from the phone call, follow up your request with a letter and send it via registered mail. Be sure to ask your issuer to report to the credit bureaus that you have made the request to cancel. After a month, check your credit reports to verify that your account has been taken out and that it does not say it was your “creditor” that closed your account.


About the Author:

Suzy Vanstrusen is a credit analyst and a writer on the website She has been providing consumers with tips and wise information about credit repair as well as helping you out more with your bad credit loans.  Copyright © 2010

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