Thinking of cancelling your credit card? If you are not able to manage your expenses or feel like you are entrapped in payments and over spending, you should make this call. Here are a few things you should keep in mind to smoothly go through this process.
You can't close a credit card without paying off an outstanding balance or any pending EMIs.
All your existing rewards and points will be nullified once you cancel the credit card. Redeem them to get full benefit of the rewards you've earned.
Review your statements and any recurring charges associated with the card. Update these payments to another payment options.
Closing your card impacts your overall credit score.
Closing your oldest credit card can shorten the average credit history and lower your score. If you have an old credit card with no annual fee, it's better to keep it open.
Review the agreement for any fees or penalties related to closing the account.
Instead of closing the card, you can check with the issuer to downgrade it to a no-annual-fee version. This way you can keep the card and your credit score preserved.
Once you've formally closed your credit card, ask the issuer for a written confirmation that your account is closed with zero balance. This document serves as proof for future records.
After closure, check your credit card report to ensure it is closed and has no lingering issues or unexpected charges.
Once you are 100 per cent sure that the account is permanently closed, destroy the physical card to prevent any misuse.
