Home > Credit Cards > The Right Way to Close a Credit Card

Comments 0 Comments

Are you done with one of your credit cards? If so, then you might be looking to close the account. It sound’s like a simple task, but there can actually be much more to it than people think. First, you have to consider your reasons for closing your account, and then you have to do it the right way.

1. Decide If You Actually Should Close a Card

You may want to begin by asking yourself why you are closing your account, and decide whether this step is really necessary. For example, some people decide to cancel a bunch of their credit cards because they think that it will improve their credit score. In fact, closing your credit cards may have the opposite effect by reducing your debt-to-credit ratio (how much debt you are carrying versus how much credit you have at your disposal). In addition, the closure could wind up ultimately hurting the age of your credit history.

Other people will cancel their cards just because they are not being used. (Here again, cardholders risk lowering their credit score, so you may want to check if yours can handle a hit. You can pull your free annual credit reports on AnnualCreditReport.com or, if you want to monitor month to month, you can get your credit scores for free every 30 days on Credit.com.) But if your card charges an annual fee, and you have determined that paying the fee is no longer worth it, then closing your account can make sense. Other good reasons for closing a card can include excessive fees and poor customer service.

2. How to Close Your Account

Once you have concluded that you want to close your credit card, the next step is to contact your card issuer and inform them of your decision. When you tell your card issuer that you are calling to close your account, the front line customer service representatives may transfer your call to another department called “retentions.” (A hint that this is happening is the representative saying they are transferring you to a “specialist.”)

The mission of a retention specialist is to keep you from closing your account. To achieve that goal, the representative will ask you why you are closing your account, and try to offer you reason to stay. For some cardholders, these retentions specialists can be useful. For example, if you tell the retentions specialist that you are canceling because the annual fee is too high, then you might be offered a one-time waiver of that fee. And, if you indicate that you are dissatisfied with your credit card’s rewards program, then you might be offered some amount of bonus points, miles or cash back in return for your continued use of the card. Like the sign-up bonuses offered to new customers, these offers may require cardholders to spend a certain amount of money within a designated time period.

Yet for those who are trying to cancel their card for other reasons, such as being dissatisfied with the company’s customer service, these retention offers can be a waste of time. Thankfully, many credit card issuers will allow customers to close their accounts online, without having to speak to a customer service representative. To do this, log into your account and try sending a secured private message. You can simply request to have your account closed, and provide the last four digits of your account number as a reference.

3. The Closing To-Do List 

Before closing your account, you will want to take stock of any rewards points or miles you have accumulated with the card. If these rewards are held by a partner, such as an airline or hotel loyalty program, then you have nothing to worry about. But if your rewards are with the program operated by the card issuer, then you may need to take some action. Find out if the points or miles are forfeited when your account is closed, and if so, how long you have to use them. In some cases, you may still be able to retain your reward points if you have another qualifying account that uses the same program.

And, if you have a remaining balance on the account, you will still have to pay it off, along with interest — often before the issuer will let you close the card. Finally, after your account is closed, you may want to destroy your card. (If you have authorized users on the account, you may have multiple cards.) If you have one of the cards that is made out of metal, your card issuer may supply you with a return envelope so that you can send it back to be disposed of.

Your credit card is not designed to be a lifelong relationship, and there may eventually come a time when you will need to part ways with a particular account. By evaluating the reasons for closing your account, and doing it the right way, you can tie up any loose strings and move on without having any regrets.

More on Credit Cards:

Image: moodboard

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team