There may come a point when you realize that it’s best to cancel your current credit card and move on with another offer (or none at all). While there’s nothing wrong with this, don’t overlook the fact that it could impact your credit history and credit score — and not in a good way.
If you’ve compared the pros and cons of canceling your credit card and still want to head down this path, here are the steps to take:
- Pay off your balance: The biggest mistake you can make is canceling your credit card before paying off the balance. You want to walk away debt-free, so pay off your balance before you ever think about closing your account.
- Cancel recurring payments: If you’ve set up recurring payments — such as for utility bills — update your payment information.
- Check your rewards: Do you have reward points? Are you due cash back? If you answered yes to either question, take advantage before you close your account. It doesn’t make sense to leave points or money “on the table.”
- Contact your credit card issuer: You can generally do this online or via phone. Either way, the goal is to begin the process of canceling your credit card. They’ll tell you what steps you need to take. From there, follow them closely and document your every move.
- Review your credit report: Once you close your account, wait 30 to 60 days and then check your credit report to ensure that it’s reflected properly. If you notice that it’s not closed, reach back out to your issuer for clarification.
- Dispose of it: Don’t forget to dispose of your old credit card(s). This guarantees that nobody can attempt to use it in the future — even though it’s not possible.
The steps you must take to cancel a credit card aren’t nearly as challenging as answering this question: should you cancel your credit card?
Carefully consider the pros and cons of this decision. As long as you feel that you’re making out for the better, you can proceed with the steps above.
It doesn’t take long to move through the steps above. In fact, it’s possible to cancel your credit card account within a matter of minutes if you know exactly what you’re doing. Just make sure you’re familiar with any impact it could have on your credit history and score
Have you ever closed a credit card account? Were you happy with your decision or did you come to regret it?