Is your decision to close a credit card final? There might be a number of reasons to cancel a credit card. You might be a spendthrift who is not able to resist the expense. Your uncontrollable spending habits can result in a great loss in the financial status until and unless you are a Richie Rich. Another reason could be that you might not be using it at all and don’t want to end up paying the annual charges for no reason. Whatever your reason is for canceling the card, make sure to think twice before taking any discussion.
Before we let you know the process, get clarity on certain things:
They Keep the Records
If you are shutting down the credit card to avoid the negative feedback about the credit history, then you should read further. Financial institutions generally keep the record of your credit score detail for at least ten years. So before closing the account, make sure to remove the negative report from it by bringing back your account on the positive nod. The bad score remains in history for seven years. So, bad details have quicker expiry date than positive details.
Before Shutting Down, Make the Best Use of Reward Points
Always make sure to use the rewards points that you have earned before closing the credit card. After the shutdown of the credit card, you no longer will be able to bear its fruit. Even redemption of these points helps in reducing the outstanding balance. So, redeemed and bring back the positive balance in the credit report.
Old is Gold
The proverb, “Old is Gold” is equally valid in case of the credit card also. To understand it better, let’s take an example: Say Mr. X has opened the account at a very young age and now after 25 years, he wants to close the credit card. Now there is another person of 50 years who has open the account only a few years ago only, then Mr. X will be more affected as he got a long history of credit.
Once you made up your mind to close a credit card, here is the step by step process to be followed:
Contact Customer Care
One of the methods to call off your credit card is by contacting the agent or representative of the credit card company. The contact number is available on the monthly statement, credit card and official website of the company. They will ask you a few questions like the reason behind your decision and other account-related details. The representative will also try to lure you with offers like lowering the interest rate or enrollment in other reward programs. Make sure to note down the date of the request for further communication.
A letter for Requesting the Closure
To make sure about the request, write a letter to the company asking them to close the account. The letter should include details like your full name, account number, contact number and the details given by the customer representative. In the letter, make sure to ask them for a credit card report to ensure that the account gets closed. If any payment is due, then enclose the check number that you have used to pay off the outstanding. Make sure to ask them for the receipt. Just for the record, keep a copy of the letter and send the letter via mail.
Wait for the Confirmation
The cancellation is not an overnight process, so sit tight for at least one month or more. Your credit card account is not closed until it is marked as “closed” in the credit report. If the process is taking a long time then make sure to take follow from the company. Even after the repeated trials, when your work is not done, then make sure to file disputes in the credit bureaus.
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We wish and hope that queries like how to how to close a credit card might get cleared with this post. But make sure about your decision as closing the credit card can affect your score history. Your decision should be based on the pros and cons of canceling a credit card. For all the finance queries, make sure to visit FinanceShed once again.