The Right Way To Cancel Your Credit Card Without Hurting Credit Score- An Infographic
Sometimes, closing credit cards is required. It could be because you are spending unnecessarily or not using them at all. But cancelling a credit card can impact your credit score as it increases your credit utilization rate. When an individual cancels a card, he also reduces his overall available credit. A few tips on closing a credit card.
1. CONSIDER AGE OF THE CARD: Closing your oldest card can cause your credit history to appear shorter, which may harm your credit score.
2. CANCEL ALL AUTO-PAYMENTS: Cancel all automatic bill payments. Else, the institution requesting for payment would levy penalty if money is not paid.
3. CLEAR ALL DUES: An issuer will close the card only if free of all dues. Clear them before the next cycle.
4. REDEEM BENEFITS: Check your reward points balance and redeem them before you apply for closure of the card.
5. MAKE UP YOUR MIND: The issuer might give offers for you to continue. Ensure you have made up your
mind on closing the card.
6.FOLLOW-UP IN WRITING: Ensure you have it in writing that you want to close the card. Keep a record of the letter for the future.
7.CHECK CREDIT REPORT: Check credit report to ensure that issuer reports your card as closed.