There are several reasons why you may need or be forced by circumstances to cancel your credit card. One, it may be that you want to avoid over spending due to easy line of credit provided by the credit card.
Two, interest rates applicable to your credit card may simply be too high to a point where you cannot manage having that credit card in particular. Three, you may need to open another credit card account, which makes it necessary to close the previous one should you wish to have only one credit card.
Cancelling your credit card is however not as simple as picking up scissors and ripping it apart. One important thing you need to know is that you need to do it in a proper and legal way in order to remain on the safe side of the law. Furthermore, you need to cancel your credit card for good without causing damage to your credit report and credit score.
Cancelling your credit card does not in any way erase information already captured in your credit record. Such information will still remain a critical reference point whenever you need to access any line of credit. You may need to note that information relating to your credit card serves as reference for up to 10 years even if you cancel with zero balances.
Apart from ensuring that your credit card has zero balances before you cancel, it is also very important that consider your credit card’s credit limit. This is because closing a credit card with a high credit limit has the negative effect of damaging your credit score in case you have another or several credit cards with balances. It is therefore very important that you settle bills on all your credit cards before you attempt to close any.
The other very important consideration you need to take into account before cancelling your credit card is how old your credit account is. Whoever said age is gold did not err. This is credit circles is translated to mean “old credit is the best credit”. Cancelling an old credit card may not be the best thing to do especially if you have positive credit history and credit score. Cancelling such a card can seriously damage your credit score.
With all matters considered, cancelling your credit card involves contacting your credit card issuer and giving a notification of cancellation. You should be able to confirm with the issuer at this point that your credit card balance is indeed zero. Since a notification is simply not enough, you need to send your bank or credit card issuer a written letter indicating your intention. It is on the letter that you can attach copies of documents you used to clear balances just in case you had credit card balance.
Having your credit card account cancelled can take a month. You will need to very patient. You may consider getting a copy of your credit report from each of the three credit bureaus. In case several weeks have elapsed since you submitted cancellation letter, your report needs to read something like “account closed”. You should be able to receive a written confirmation from your bank or credit card issuer indicating that your line of credit is indeed closed.