How to Cancel Credit Cards, the Smart Way

The use of credit cards can be an intriguing experience, but along with that comes the risk of living beyond your means. Excessive spending on the part of the user can eventually lead to the question of how do I cancel a credit card? There are several other reasons why canceling a credit card could be an option. Some of which are in cases of divorce, getting rid of unused credit cards, rising annual fees, impulse control, or a better reward elsewhere.

The cancelling of a credit card account can be done to keep one from abusing credit, reducing the risks of identity theft, and just to help better manage your money. It is also important to note that cancelling a credit card can have a negative impact on your credit score. Puzzled on what a credit score is? Your credit score is a number that reflects the likelihood of you paying back credit that lenders use to determine how much credit to extend to you. Sine cancelling cards can affect your credit in both good and bad ways, it’s important that it get done in a smart way.

Canceling a credit card the smart way does not involve the cutting of a card into two.  You wouldn’t want to do that anyway because if you keep the account open, you should keep it in tact, for future emergency purposes. Cancelling requires one to follow specific steps to close the credit card account completely with the least damage to their credit score. Here are several steps on how to cancel a credit card the smart way:

• Know who to contact. Contact the credit card company and select customer service. Some card companies even have a selection in their phone options for cancelling a card at the beginning.

• Remember to redeem any rewards, that is, to check the rewards balance and redemption procedures on the card issuer’s website.

• Wait until your card is balance free, confirm it’s at $0 (owed), and then make the request for the card to be cancelled, usually through an option on their website. You can also send a letter requesting the closure of the card account. MAKE SURE TO NOTE THAT IT WAS CLOSED AT YOUR REQUEST.  Future lenders will look at whether the card company closed the card on you or whether you opted to close the account voluntarily.  There could be a number of reasons, usually bad, as to why the card company would close the account on you, which lenders could then use against you in deciding what credit to extend to you.

• Take a look at a copy of your credit report to make sure the account is marked as closed, by user or account holder. It is very important to check your credit score about a month after the card account has been closed, to see if canceling the card caused any damage. And after the account has been successfully closed, you can then cut up your credit card, if you so want. Since the account is closed, no one can further use the card or the information on it.

Finally, it is indeed a fact that when you close a credit card, the ratio of debt you owe to open credit jumps up because you’re using more of your valuable credit. When this happens, it means your credit score goes down. To avoid this negative situation, cancelling a card must be done in a smart way.