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How to Close a Credit Card

How to Close a Credit Card

*Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any credit card issuer. This site may be compensated through a credit card issuer partnership.

This article was last updated Feb 10, 2019. Terms and conditions may have changed. For the most accurate information, please consult the issuer website.

If you’re looking to close a credit card you no longer use, you may be wondering the best way to go about it. Closing a credit card isn’t as simple as cutting it up — there are several steps you need to take to ensure your account has been properly closed and you don’t incur any fees or miss out on earned rewards.

We’ll explain the steps you should take if you want to close a credit card.

  1. Pay off or transfer any balances remaining on your card
  2. Redeem any rewards you’ve accumulated
  3. Call your bank
  4. Mail a cancellation letter
  5. Check your credit report
  6. Destroy your old card

Still not sure if you should close your credit card account? Find out exactly what happens when you close a credit card account.

How to close a credit card

1. Pay off or transfer any balances remaining on your card

Before you close your account, we recommend paying your balance in full. While your bank may allow you to close an account with a balance, the account won’t be officially closed until you pay it off in full. Plus, after you request your account to be closed, you’ll still be responsible for paying off unpaid balances, which will continue to incur interest charges.

Prior to account closure, you should also cancel any automatic payments, like recurring electric or auto bills and subscription services. Once your account is closed, these payments won’t be approved and you may risk service interruption or fees from the billing company.

If you’re unable to pay off your balance, but still want to close your card, you could consider transferring your debt to a low or no-interest balance transfer card first. Once your transfer is completed and the balance on your old card reaches $0, you can then choose to close your card

If you don’t have a rewards card, skip to step three.

2. Redeem any rewards you’ve accumulated

Depending on type of rewards card you have, unused points or cash back may be forfeited upon account closure. Since you don’t want to lose those hard-earned rewards, it’s in your best interest to redeem or transfer them before closing your card.

Many travel cards allow you to transfer points to hotel or airline loyalty programs or transfer points to family or friends. There are also other redemption options, such as merchandise and gift cards. Cashback cards can provide statement credit or gift card redemption options, but beware that there’s often a $25 minimum redemption amount, so plan accordingly.

If you have a miles-earning card, odds are the miles you’ve earned will remain after you close your card since if they’re stored with the affiliated airline or hotel loyalty program. But, to be safe, contact the loyalty program to make sure your points won’t be forfeited.

3. Call your bank

To contact your bank, call the number on the back of your card. Before you ask to close your account, check that there is no balance. Even if you paid it off in full, there may still be residual interest charges, which is the amount of interest that accrues in the time between when your bill was sent and when your card issuer receives payment.

Once you’ve confirmed that no residual interest will be charged to your account, tell the representative you’d like to permanently close your account. The representative may try to discourage you doing so, but remember that it’s your decision, so reiterate that you want to close your account.

Before you hang up, get the name of the person you’re speaking to and the mailing address you can use to send a written cancellation letter. In addition, write down the date and time you contacted the bank to close your account.

4. Mail a cancellation letter

While the representative you spoke to most likely closed your account, there’s always the chance a mistake was made and your account may remain open. As an added layer of assurance, follow up with a brief letter stating your desire to close the credit card.

The letter should also mention you want the card cancellation reason to be “closed at consumer’s request.” Don’t forget to include your name, phone number, address, account number, and the details of your call with the bank’s representative.

The last thing to include is that you’d like written confirmation that your account has been closed with a $0 balance. It’s a good idea to send this letter via certified mail so you have proof you mailed a letter and will receive a confirmation when the bank has received it.

5. Check your credit report

Verify that your account has been closed by checking your credit report. This may take up to 30 days to be reported by the card issuer. You’ll also want to check that the reason for closure is “closed at consumer’s request,” or something similar. If the reason is anything else, such as “closed by issuer,” it can potentially harm your credit score as it indicates the issuer had a problem with you as the account holder.

You can view your credit report for free once a year from each of the three credit bureaus — TransUnion, Experian and Equifax — at AnnualCreditReport.com, or you can create a free account with CreditWise from Capital One and receive monthly updates on your TransUnion credit report.

6. Destroy your old card

After your account is officially closed, the last step is to destroy your card. Most cards are made of plastic, so the simplest way to destroy the card is to put it in a shredder or cut it up into little pieces.

Metal cards have become increasingly popular, and can’t be disposed of in the traditional way; regular shredders or scissors won’t work. However, most card issuers, like American Express® and Chase, provide prepaid envelopes upon request that you can use to mail your old card back and they’ll safely dispose of it.

Bottom line

There are a variety of reasons you may want to close your credit card. It may have a high annual fee, a low credit limit, a high APR or you just don’t use it anymore — or maybe you just want to rid yourself of the temptation to spend money you don’t have.

Whatever the reason, closing a card is not a decision to be made lightly as it can negatively impact your credit score by boosting your overall credit utilization if you carry balances on other cards, reducing the length of your credit history if it’s one of your oldest cards, or it can even eliminate your credit score entirely if you don’t have anything else reporting activity to the credit bureaus.

If you are sure you want to move forward and close a card, it’s best to apply for a new card you want first before any credit score hit. Once approved, you can move forward with closing the old card. And whatever you do, never close multiple cards at once as your credit score will surely suffer.

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July 26, 2018