Need To Cancel Your Credit Card? Here’s What You Should Do
Are you receiving bank statements that declare you have dues yet to be paid on the credit card you had cancelled?
This is not an uncommon scenario among credit card users.
With credit card companies vying with each other in offering benefits, rewards, and cash back offers, it is common to see people switching to new credit cards. Some take on multiple cards and suddenly realize that they don’t need so many, and decide to cancel the unused ones.
But the important thing to note here is that you need to take utmost care, when it comes to handling credit cards, especially when you want to cancel one.
Safe procedure to cancel your credit card
Here is a step by step guide for safe cancellation of credit card
1. Owning multiple cards may get you discounts, cash back and rewards. But you need to decide
- How much of those benefits you have taken advantage of
- Which card offers the best benefits?
- Which card has a high overdue and annual fee?
Instead of closing all the unwanted accounts, do one at a given time. It is best to discard the new cards and keep your older card open for keeping up your Credit history safe. Check whether there are dues or EMIs still to be paid in the cards you want to cancel.
Communication Is Important
2. Contact the customer care of the Credit Card Company or bank that has issued your card. Inform them about closing of the account. Follow up your call with a written communication and email.
This is necessary as banks use it to verify whether the request is a genuine one. Make a note of the date, time, and confirmation number of request for reference during all future correspondence regarding the cancellations request.
3. If you get persistent calls from the bank regarding the cancellations, resist them unless you get an offer that negates all the reasons, which had prompted you to go with the cancellation.
4. If you have outstanding amounts on the cards you want to cancel, pay off the dues in a single payment. If the amount is a large one, the payment can be done in installments. Ensure your final payment includes all charges and fees applicable and have complete records of the payments as proof.
5. Communicate with the Credit Card Company to verify the closure of your account by mentioning the details of your request that you have saved.
6. You will receive a communication from your bank regarding the cancellation and closure of the credit card account. Now cut your credit card into small pieces, so the magnetic strip is destroyed. This will complete your cancellation process.
7. Follow up with your bank in case you are still receiving monthly statements. Contact them to make sure the cancellation process is taken care of.
Before you cancel you should know that the changes may take a long time to appear on the credit report. Keep track of the report to ensure the records are accurate.
You will also know if any damage to your credit score has been done due to cancellation. Since the score is based on the amount of credit you have, you should take it into account while cancelling.
If you cancel the card after the date of billing, a residual amount may be present that is not seen in the last statement. So verify thoroughly on whether you have paid off all your dues including charges, fees and interest you owe.
Make sure you have a proper written acknowledgement from your credit card issuing bank regarding the completion of cancellation. And don’t ignore any of the fees or charges because you feel they are unfair charges. These can pile up into a huge amount with interest attracting penalties, which can affect your credit score and future loan applications.