With the right strategy, cancelling a credit card will not be the most traumatic experience ever. Many people fear that cancelling a credit card might affect their credit score. If it means convenience and reduction in overall expenses, now is the time to learn how to cancel a credit card most efficiently. This is one question that many people always grapple with, and that is the concern of what comes next after the card has been cancelled.
Do not worry! We will take you through every step. Everything has been covered from knowing the reasons for never using that card again to canceling rewards or complete debt. These tips will allow you to make that financial decision quickly and confidently. Let us see how to cancel the account without any complications.
Is it necessary for you to close your credit card?
The dilemma can be burdensome when one has to close a credit card. It is important to analyze every aspect involved carefully.
One reason for the cancellation of an account is that it can eliminate any unnecessary charges or provide better control over expenditures. If precisely this is the case, then closing an account that encourages overspending every month should be more common.
Nevertheless, keep in mind the repercussions on your credit score. Closing such an old account may adversely decrease the years of credit history. This factor plays a significant role in calculating your score.
In addition, if you are looking to buy something expensive shortly, like a house, it is better to have an optimum credit score.
Before you make this choice, think about what you believe is the priority for your finances. These determinants are vital in deciding whether cancellation fits within your objectives.
How to cancel a credit card in six steps
Although cancelling a credit card can be a bit scary initially, it is quite simple when you adhere to the following six steps.
Begin by considering the reasons for closing the account in the first place. This helps guide the decision-making process.
Then, look into the other options before deciding to cancel the card. This may lead to better scores in many scenarios as no fees are associated with the negotiated circumstances.
Finally, examine the recent transactions done with the card in question. Ensure there are no outstanding transactions that need to be fulfilled before the closure is attempted.
Lastly, make sure any existing balances are cleared before the phone call. You don’t want to be in debt after the cancellation.
This process may be the last time you use those reward points that you have accumulated. Or, if you have cashback options available, this could be the perfect time to take the benefits one last time before saying goodbye to your card.
Call customer support and ask them to close your account over the phone. Follow this up with written confirmation. Upon confirmation, remember to destroy the physical card!
Know your reason for closing the account.
Why did you even think of closing your credit card account in the first place? Knowing why you will take such an action is good because it explains the entire process. Most importantly, it should explain how you will go about this.
If it’s because of high charges and interest, there is a way out through cancelling the card. If you now realize your spending behavior does not require you to have so many cards, there is a reason, and such facts should resolve cases of closing an account.
How will it affect your credit score when you remove the card? If that is the case, do so, but ask yourself whether there could be adverse effects. It is important to know in advance so that one does not have regrets later.
If one understands what factors influence such decisions, then only one will know how to deal with other loans and credit cards in the future.
Look at Options
Do not be so quick to go ahead and cancel your credit card without weighing the available options. Sometimes, all it takes is a change in communication strategy.
It might be worth attempting to reason with your issuer. Because of your loyalty, they may be willing to lower your interest rate or remove yearly fees. In many instances, all that is necessary is a phone call.
If debt issues are too extensive, closing the account is not an option and recovering balances is an alternative that should be considered. This method can be effective in terms of reducing progress on multiple debts while maintaining lower levels of interest rates.
Alternatively, you can stay with the issuing bank and switch to another card. If you switch to a different card, you may get a card with better odds and fewer fees without affecting your credit score too much.
You may want to consider whether it is worth holding that account open for emergencies. Without adding any costs, some people may feel more secure knowing they have available credit when the time comes.
Look for fraud
Lastly, check millions of times before informing the credit card issuer to cancel.
Steady the course for automatically billed services and subscriptions. You would not wish to forget anything that does not need to be missed. This is a crucial step.
Look around to see if there are some pending transactions as well. These may not have been posted until now, but they will affect your balance when they arrive. In as much as possible, roll up those, to begin with, to save yourself lambasting at a later stage and help save stress.
Also, any card payments for which an account is being closed should be completed to facilitate risk management. It is very difficult to difficult to move one’s unsettled bills, as they will almost certainly retort at a later stage.
If automatic payments are affiliated with this card, other options should also be available for making payments. Moving those over beforehand can relieve future headaches.
Considering this, all the above facts would make for a less cumbersome cancellation process and, more importantly, no unforeseen eventualities concerning finances that would occur in the future.
Settle the payable balance if it is not overdue
Clearing any overdue amounts on a credit card is necessary before cancelling it. This is done to ensure that an individual does not end up with debts that are still overdue.
When an account is closed with a balance, there is no hindrance towards interest that will build up over time. Otherwise, one will likely pay an amount that is significantly more than what was settled.
Check your recorded past transactions very thoroughly and abide by the standard rules. All those should be cleared, including new items that have been posted as already b
If you cannot deal with efficiently making multiple payments, consider transferring the remaining amount to some other card or loan with lower interest, as it would be easier to manage.
Finally, you would be free from the headaches and can proceed without any financial burden with that card. You can move forward in your financial journey with a fresh start.
Make sure to use your rewards
If you’re about to cut your credit card, think for a second and let your next actions be reimbursed thanks to the rewards program. Plenty of credit cards provide opportunities for acquiring points or perks such as cashback or travelling.
When deciding on the terms of your balance or the certificate for this collar, pay attention to their conditions. There is a chance that certain contests – your dedicated item could have a period attached to it or an expiration date, so to speak- take caution. Not all merchandise is genuine. You earned it, and do not leave it for others.
Think deeply and try to find the best way to spend your credits. You may claim a gift card or a statement pro bono coupon.
Some think it feels like they are using a physical card to get a recourse when they withdraw. It is a review rule because once you take all these accounts, you must devote resources to certifying something at the end of the day.
Cancel the card and shred it into small pieces
Kindly follow through so that the card has been cancelled and ensure that this is the last action left: shredding the card. This is done to ensure no one gets the chance to abuse any personal information. Grab a pair of scissors and cut through the chip and the magnetic strip. This automatically eliminates the possibility of fraud or misuse of the card. It is a very straightforward and very effective way to safeguard oneself.
Do not throw away the bits; instead, place them deep inside a batter. Mixing it up takes security to the next level as it ensures no possibility of reconstituting the entire card. If you wish, you can employ a shredder to destroy the pieces even further. The numbers can never be returned with shredding, so this procedure brings peace of mind.
Endpoint This, however, is not only relieving but also quite self-confirming about the decision made to cancel the card in question. Shredding has also been made easier with the Big 4 in Australia. Shredding or cancelling some credit cards can be simple due to the differences in the bank’s procedures and policies. Big 4 in Australia, Commonwealth Bank, Westpac, ANZ, and NAB, have dedicated cancellation procedures.
If you have a credit card with Commonwealth Bank, you can call customer service or use their app to destroy your card. Just do what they tell you, and it will be easy.
Similar services are available from Westpac via their internet banking or mobile phone application. Just ensure that all bills have been settled before churning out that process.
So, for those who have ANZ and would prefer human assistance, even after explaining the procedures, they may have to go to a branch, though online methods are also available for the rest.
NAB has an app which makes everything easy, but they also offer support through the phone if one prefers that channel.
Usually, other banks have simple procedures as well. Each bank should uniquely handle this process, and any questions concerning your case should be put to the relevant authority.
As long as you are clear about the right process, it should not become a nightmare dealing with the cancellation of a credit card. Ensure that unnecessary distractions are avoided to achieve the optimal operational efficiency you have envisioned.
