What it takes to Cancel a Credit Card?
One could never learn enough of smart ways of using a credit card and maintaining it. It is possible that you feel that a particular card does not serve much to your needs or that you just have too many to maintain but that they are not really required. Or, you may even like to switch to another credit card service and end the one that you hold presently. In all such cases, one option that clearly strikes the mind is ‘cancelling the credit card’.
However, it may happen that you have filed for cancellation and yet you receive the statements from the concerned bank. What could be possible is that maybe you, though attempted to file the cancellation application, have not really completed the whole process of cancellation.
Understand the Basics
Let’s understand the basic steps that need to be followed when getting a credit card cancelled.
1. Find out the exact outstanding amount on the card. This may be done by contacting the customer helpdesk of the bank or through internet if you are registered for online access.
2. Pay the outstanding amount, online or otherwise, and clear all the dues. In case the pending amount is huge, you may pay back the dues on a weekly or monthly basis. It must be kept in mind that in such cases, till the time the dues are cleared, interest will be levied. The final payment must cover all the fees and charges.
3. On making the complete payment, ensure that you contact the customer helpdesk once again and request for the cancellation of the card. It may prove useful to note the date and time of the call as such calls may be kept in their records for reference, if required at any stage. A confirmation number or receipt may be requested when requesting for card cancellation.
4. You must then contact the credit card company and verify with them that the account has been closed. You might be asked to furnish the details of your request, so keep them handy. Such communications must preferably be made through email or should be sent in writing through registered post so that there is a legal record for the same.
5. Post a few weeks’ time, you should receive a confirmation from the bank that the credit card has been cancelled and the account closed.
Points to Consider
a) The bank will not be able to help you with closing the account unless you have cleared all your dues. The dues are inclusive of the expenses incurred on the card, interest amounts, fees and charges. If there is a residue payable amount on the card still left owing to the cancellation being filed after the billing date, the bank ensures that you get notified and pay back.
b) There are certain off shoot charges that consumers may feel are unreasonable; however, the banks are highly reluctant in letting you cancel the card without clearing all the dues. In fact even interest and late payment charges keep getting accumulated until the dues are paid.
c) The individual must also insist upon getting a written acknowledgement from the bank regarding the cancellation of the card.
Does it Affect the Credit Score?
It is true that getting a credit card cancelled may reduce your credit score. This happens because, ultimately, the overall credit limit reduces by closing a card. Overall, the credit utilisation increases.
However, if the card seems to be really of very little use, then it may as well be closed to at least prevent misuse due to fraud or theft. In case you desire to get more than one card cancelled, it’s a good idea to do it gradually and not all at once.
For credit cards, older your account history, the higher is your credit score. A decently long and clean track record helps the banks assess your financial credibility.
Therefore, if possible, it helps to keep the older credit cards alive and if at all closing has to be done, it must be done on the newer cards, preferably.
However, if your credit score is relatively weak, it’s advisable to work on improving it before getting the card cancelled.
After-effects of Non-closure of Credit Cards
It is very important that you take care and follow the proper steps in getting the card closed. In case of outstanding balance on the card, proper care needs to be taken to clear all the dues as soon as possible.
In case post cancellation, the bank has not sent you the due acknowledgement of the same, it’s advised that you immediately check with the bank to avoid suffering renewal charges that appear as unpaid dues in the account even post cancellation. Remember that this may also lead to accruing penalties that may affect your credit score, if not dealt with proactively.
If you keep these few but salient points in mind, the entire process of the decision of getting a credit card cancelled and the relevant procedures become much clearer and simpler. The more you understand the nuances of this process, the smoother the process becomes.
