How to Cancel a Credit Card

Many consumers have succumbed to carrying far more credit cards than they need. When it comes time for a review of ones personal finances it makes sense to unload unnecessary cards, particularly if they levy an annual fee or high interest rates. Consumers who opt to transfer their credit card balances to a balance transfer card, in order to pay down credit card debt, are well advised to cancel their previous cards to prevent the temptation of using them again. In order to close credit cards satisfactorily it is important to know the cancellation procedure.

Before going ahead consumers should be aware that they should retain the credit card which represents their long term credit history in a good light. This is important as length of credit history is a determining factor in a good credit score. Additionally if considering cancelling several cards it is recommended to do so gradually, as closing several at the same time could have a possible detrimental impact on credit scores.

Cancelling credit cards will result in a reduction of overall available credit thus consumers should ensure that remaining credit utilization remains no more than 30 percent of available credit, to avoid a negative impact on credit scores. However cancelling cards can also have a positive impact if one was perceived as previously having too much available credit.

In order to cancel a credit card the balance needs to be cleared down to zero. It is important to ensure that there are no outstanding transactions, fees or interest charges. When the card balance is clear one needs to contact customer services to double check that the account is clear, and then inform the card provider of ones intent to cancel the card. This may result in an attempt to try to retain ones business and could possibly have a positive result in a lower interest rate being offered. This may suit the card holder if a high interest rate was the reason for cancelling.

Consumers who remain determined to cancel the card should then put their intent in writing, ensuring that a written confirmation that the credit card is indeed closed is sent by the issuer. To prevent any possible speculation that the card may have been closed by the issuer rather than at the card holders request it is advisable to request that this information is noted on ones credit report.

When written confirmation is received that the card has been closed then the cancellation is complete. If the credit card provider fails to send written confirmation then they should be chased up by telephone or in writing, until the necessary written confirmation is received.