How do i cancel my credit card
How do I cancel my credit card?
Wondering how to cancel your credit card? Credit cards are a common source of payment for many consumers and it is almost taken for granted that everyone has at least one credit card. Some people have multiple credit cards, others have dozens, and Walter Cavanagh holds the Guinness Book of World Records with 1,497 valid credit cards in his name. No matter how many credit cards you have, canceling them can be a little trickier than they were to obtain.
Accumulating Credit Cards
Credit cards are opened for a variety of reasons and here are some of the more common examples as to why more than one or two cards end up in your wallet. Oftentimes your first credit card will not have a high credit limit. Of course, if you show responsibility with that first credit card, chances are you will start to receive offers for an additional credit card, and that card may have a higher limit. Most people don’t plan on maxing out the credit limit, but it is a temptation nonetheless, especially if you have some large expenditure you are already considering when the offer comes in. Now you have two cards, and as you continue to use them responsibly, you continue to get more offers.
Reward credit cards are appealing because they give you cash, merchandise, or travel mileage at no additional cost. All you have to do to earn the rewards is to use the credit card when making purchases that you were going to make anyway. These reward cards tend to come with a high interest rate, but as long as you pay the balance in full every month, you can get handsomely rewarded. So now you have three or four credit cards.
Then there’s the retail offers giving you instant discounts off of your purchases just for opening up a credit card with the store. There’s no cost to the card, and you not only get a discount now but you’ll receive future offers as a card member, so you sign up for that card and maybe another favorite retailer, adding up to six credit cards. And since gas is so expensive these days, a gas credit card from your favorite gas station that gives you 5% cash back on fuel purchases is a nice addition to your collection. You now conservatively have seven credit cards in your possession.
Having multiple credit cards is not necessarily bad. In fact, if you use the cards occasionally and pay your balances in full and on time, you can actually do wonders for your credit score. However, keep in mind that every time you apply for a credit card, a credit check is run which temporarily dings your credit, so applying for multiple cards within a few weeks of each other and then applying for a car loan or mortgage is not the best plan. Spacing out your applications, however, will not have a major impact on your credit report at all.
Reasons to Cancel Credit Cards
Having multiple credit cards is beneficial if you have control over your spending habits, however if your debt is growing out of control and you are unable to lock your cards away, you may need to cancel some of your cards. You may also choose to cancel some cards because you would rather carry a card with a lower interest rate or accept an offer for a rewards program and you want to limit the total amount of cards in your possession. Whatever your reasons for
canceling your cards, be sure you first understand the impact that will have on your account(s) and your credit history (See “Warnings before Canceling Credit Cards”). On a side note, if you card has been stolen or there is fraudulent activity on your account, you do not need to cancel the card. Your issuer will close the number in question, issue you a new card, and merge your account activity accordingly.
Steps for Canceling a Credit Card
Here are the steps to take when canceling a credit card:
Step One: Make Contact
Once you’ve decided to cancel your credit card, the best method is to notify the credit card company by phone or in writing, depending on the issuer’s policy. You are usually requested to cancel by phone because many creditors do not want you to cancel your credit card and will actually offer you incentives to stay. If you agree to stay, they may waive your annual fee or offer you a lower rate. Your card may be upgraded to a higher status earning you extra features or you may be awarded additional perks in your rewards program.
Step Two: Consider Negotiating
If any of the offers are desirable and don’t counteract your reason for canceling, you may want to consider accepting the offer. However, you should not be swayed by incentive tactics if you were steadfastly determined to cancel.
Step Three: Document Your Request
Document the date, time, and name of the representative you spoke with when you canceled your card. You should also receive confirmation in writing. This could be important documentation down the unforeseen road if you ever need to prove that you closed your account voluntarily. You should also ask the credit card company to report your voluntary account closure to the credit bureau so that your credit history is accurately reflected.
Warnings Before Canceling Credit Cards
No matter what reason you have for canceling your credit cards, you must first understand the consequences of what seems like a simple action. If you have a balance on the card that you want to cancel, this will most undoubtedly raise your interest rate to the highest possible percentage. If this is the case it may be in your best interest to stop using the card but keep the account active until you have paid the balance in full.
Furthermore, unless you have no balance on any of your credit cards, canceling your credit cards can be a risk to your credit history. Credit scores are calculated by a formula that in part considers the ratio between your debt and your credit limit balance. The greater distance between these numbers, the higher your credit score will be. If you cancel your cards, you reduce this distance and even though your debt is exactly the same, your credit score will lower significantly.If you need to close your cards, try to close the ones with the smallest credit limit first, and then cancel them slowly to reduce the negative effect on your credit score.
Since credit history is crucial to most endeavors today, you want to maintain or improve your credit score as much as possible. Although there may be times when canceling your credit cards is necessary, there will also be times when you will need to utilize credit cards in order to boost your credit rating. To shop for a credit card now that can help you achieve your desired credit score, simply use the free “Credit Card Chaser” on this website. Get started finding the best credit cards now!Source: www.creditcardchaser.com