Canceling Your Credit Card
Did you know that canceling a credit card can actually hurt your credit! Here are some tips for canceling a credit card while causing minimal impact to your credit score.
- Offset the shift in your balance-to-limit credit ratio. When you cancel one card, your balance to limit credit ratio may be higher, which looks like more credit risk to lenders. To counter this effect, it may be a good idea to request a boost in one of your existing account limits, which will lower your balance-to-limit ratio.
- Before canceling a card, pay down your other accounts as low as possible. Paying them down to zero will have the least impact on your credit when you close the other account.
- Know who to contact. Know the contact information, including the customer service number and mailing address of the credit card company.
- Pay down your balance to zero. Pay off your credit card, or transfer your balance to another account with better terms.
- Deliver the news. Contact the customer service center and first confirm that the card balance is zero and there is no residual interest to be paid. Tell the customer service representative you are cancelling the card and ask them to note that the account is being closed at your request. Take notes from your call, including the name of the representative, date and time of the call and any other call details. Also get a name and address so you can write them a notice of the cancellation, as well. They will try to keep your business and convince you to keep the card account open, so if you are certain of your decision to cancel the card, stay firm and politely tell them you would like the account closed immediately.
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