How to close a credit card

how to close a credit card

You can close a credit card by paying the remaining credit card balance and telling your credit card issuer that you want an account closure. If your creditor allows it, you may also close a credit card through your online account. 

Many people juggle multiple credit cards. In fact, the average American with a credit score has three cards.1 But if you struggle with personal debt, you may ask, “How can I close a credit card?” In this article, you’ll learn about account closures and how they can impact your FICO score.  

How Do You Completely Close a Credit Card Account?

There are a few steps you want to follow when you decide to close your credit card. To cancel your credit card completely, follow the steps below. 

1. Stop Using Your CardAvoid new charges on the card once you decide to close it to prevent additional debt. Settle pending transactions even after closure.
2. Pay Off Your Remaining BalanceClear any outstanding balance before closing the card to eliminate the need for additional payments.
3. Use Any Rewards Points or PerksUse or transfer available rewards before canceling to prevent immediate revocation by some issuers.
4. Stop Any Recurring PaymentsDisconnect subscriptions and bills tied to the account to avoid post-closure missed or late payments. Remove old card details from associated accounts.
5. Contact the IssuerInform the company of your decision to close the account. Follow their guidance for the cancellation process.
6. Get Written ConfirmationRequest an official cancellation letter as proof of closure. A certified letter can serve as evidence and facilitate the closure process.
7. Check Your Credit ReportsVerify account closure on credit reports. Contact the company if closure details are not evident, using the certified letter as proof if necessary.
8. Physically Dispose of the Canceled CardSafely destroy the canceled card after confirming closure on credit reports. Prevent identity theft by cutting up or shredding the card instead of discarding it.

Below is more information on each step:

1. Stop Using Your Credit Card Account

When you are thinking of closing credit card accounts, you first want to stop using those cards. If you close a credit card but still have a few pending transactions, you are still responsible for paying off that debt; even after the card is closed. To make things easier on yourself, you should stop using your credit card as soon as you decide you want to close the account. 

2. Pay Off Your Remaining Balance

The next step is to pay off your credit card balance. If you have a zero balance when you close your credit card, you won’t have to worry about making any additional payments on that particular account. 

3. Use Any Rewards Points or Perks 

Before you officially cancel a credit card, use up any reward points or perks you have available. With some credit card issuers, customers lose access to their rewards as soon as they close their account, even if they have available points or benefits to use. To avoid losing out on any rewards you’ve earned, use them up or transfer them to an alternative account before closing a credit card account. 

4. Stop Any Recurring Payments 

If you have subscriptions, bills, or any other financial obligations tied to your account, remove them. You run the risk of having missed or late payments if you forget to disconnect your old credit card from accounts tied to your canceled credit card. These missed or late payments may negatively impact credit scores and cause other inconveniences in your life.

Save yourself the hassle and remove your credit cards before canceling the account and replacing it with a new payment method. 

5. Contact the Credit Card Company 

Next, contact the credit card company and inform a customer service representative that you would like to close your account. From there, they will either walk you through the cancellation process over the phone or point you in the right direction where you can cancel your credit card online. 

6. Get Written Confirmation 

To make sure you have proof of your account closure, it is a smart idea to get an official cancellation letter from your credit card issuer. A certified letter will act as evidence of you canceling your credit card.

Some credit card companies require certified letters in order to close certain credit accounts successfully, but not all do. To stay on the safe side, you should request a certified letter of cancellation from your credit card issuer, whether they require one or not. 

7. Check Your Credit Reports To Confirm Your Closed Account

Check your credit reports to see proof of the account closure. Your credit card cancellation will be reflected in your credit utilization rate, credit mix, and potentially a few other factors on your credit report. If you do not see proof of canceling your financial account on your report, contact the credit card company to confirm they have correctly reported your account closure. If need be, you can use your certified letter of cancellation to prove your account should be closed. 

8. Physically Dispose of the Canceled Credit Card 

Lastly, after you see proof of your closed credit card on your credit reports, physically destroy the card. Simply throwing unused credit cards in the recycling or trash puts you at risk for identity theft. To prevent potential thieves from messing with your finances, cut up or shred your canceled card after closing your credit account. 

Does Voluntarily Closing a Credit Card Hurt Your Credit History?

Does closing a credit card affect credit? The answer is yes. Depending on the circumstances surrounding your card, you may see a slight or significant difference in your credit score after closing your account. 

Your credit score and credit history are important; they contain factors that financial institutions look at when they approve borrowers for lines of credit or other forms of funding. Credit card companies report this information to credit bureaus when you close a credit card. Then, that credit bureau will ensure the action is reflected on your following credit report. The three credit bureaus are Experian, TransUnion, and Equifax.

Why Is There Credit Score Damage After I Close Paid Credit Card Accounts? 

Usually, if you pay off your credit card, your credit may go up. If you have a significant amount of credit card debt and manage to pay it all off at once, chances are you will see a score increase on your upcoming credit reports. However, there are a few circumstances where closing a credit card may cause a decrease in credit scores. 

For example, if the closed account was previously your oldest account, you may see a dip in your score. Account history and how long people have had active financial accounts contribute to credit scores. So, when you close an account that was added to your account history, you may see this action negatively impacting your credit.

Furthermore, your credit utilization ratio may also be at risk if you close your credit card. Suppose you had two credit cards, both with a $1,000 credit limit. If you had a balance of $1,000 on one card and a balance of $0 on your other card, your credit utilization ratio would be 50%. If you closed the account with the $0 balance, your credit utilization ratio would increase to 100%! Such a sudden increase in your credit utilization ratio may cause significant damage to your credit history.

Lastly, credit mix is another aspect that may affect your credit report. Your credit mix consists of the different types of financial accounts you have. Typically, it’s best to have a variety of credit accounts. If you closed a credit card that was one of your only revolving lines of credit, your mix of credit might suffer a bit. 

When Should You Consider Canceling a Credit Card?

Before making anything final, make sure you are positive that you want to close your credit card. If you close your account and then decide you want the additional funding, you’ll have to go through the credit card application process again. Not only is that inconvenient, but it may also negatively affect your credit. 

How often you apply for new credit cards and other lines of credit has the potential to affect your credit score. Another action with the potential to affect your credit history is how often you apply for loans, like payday loans or installment loans

But sometimes, closing a card is the right decision. Below are some circumstances which may result in customers wanting to close their credit card accounts. 

Financial Circumstances Have Changed

Financial circumstances can change at any time. If those changes make you feel unsure about your credit card, you may consider closing the account. Perhaps you had a joint credit card with a partner or spouse, and you are now going through a divorce or separation. In that case, you may want to close the joint account and start keeping your finances separate. 

Credit Card Benefits Have Been Altered 

Sometimes, a credit card lender may alter the card benefits they offer. These alterations may result in an annual fee increase or other account changes. If your annual fee increases too much, you may be worried about affording the costs. 

You Cannot Resist The Temptation To Use Credit Cards 

Online shopping can certainly be additive and may also lead to crippling credit card debt. If you find yourself unable to resist the urge to use your card to shop online or make other unnecessary purchases, closing your account may not be a bad idea. To avoid interest rates causing your minimum payment to become unaffordable, you may want to cancel your card before your spending gets too out of hand. 

Alternatives to Credit Card Canceling

Sometimes, canceling a credit card may be the wrong choice. If you want to cancel a credit card without hurting your score, leave it alone. Below are some other things you can do if you don’t want to cancel a card. 

Get a New Product With the Same Issuer

If you want to cancel your card because you can no longer afford the high annual fees or other changes made to your account, talk to a customer service rep. Credit companies typically don’t want to lose customers, so they may be willing to adjust your annual fee or give you other perks so that you keep your account open! 

Adjust Your Budget 

Knowing how often you should use your credit card is crucial. If you use your credit card for everyday purchases, your balance may quickly get out of hand. Instead of using your credit card for recurring purchases, use it only for financial emergencies when there are no other options. When you use your current available funds instead of a line of credit to make your regular purchases, you may end up avoiding unnecessary or extravagant spending.

FAQS: Will Closing a Credit Card Hurt Me?

How does canceling a credit card impact my credit history and credit scores?

Canceling a card can affect your credit and potentially hurt your credit scores. This is due to changes in your credit utilization and the potential shortening of your credit history, especially if the closed card was a long-standing account.

Can I reopen a card account with the same card issuer after I cancel it?

Reopening a canceled card depends on the card issuer’s policies. Some issuers may allow reopening within a certain timeframe, while others might require a new application.

Will a closed card with a high annual fee still affect my credit report?

Yes, even a closed card, especially one with a high annual fee, will remain on your report. If it was in good standing, it could positively impact your credit for up to 10 years.

Should I close a card if it’s affecting my credit utilization negatively?

Before you cancel a card, consider how it affects your credit utilization rate. If closing the card significantly increases this ratio, it might be better to keep it open, particularly if it doesn’t have a high annual fee.

How can I manage auto-pay if I decide to cancel a card?

Before you cancel a card, ensure you switch any automatic payments to another card or payment method. This prevents missed payments, which could negatively impact your credit scores.

Is it better for my credit mix to close a credit card or keep it open?

A diverse credit mix can benefit your credit scores. If canceling a card significantly alters your credit mix, consider keeping it open, especially if it offers beneficial credit card rewards and doesn’t have a high annual fee.

What are the alternatives to canceling a card with a high annual fee?

If you’re concerned about a high annual fee, contact your card issuer to discuss alternatives, like switching to a card with a lower fee or negotiating a statement credit to offset the cost. This way, you can maintain your credit history and credit mix without incurring high costs.

How does my credit limit affect my credit scores, and should I consider it when deciding to cancel a credit card?

Your credit limit plays a significant role in determining your credit utilization. If you cancel a credit card and it significantly reduces your overall credit limit, it could potentially harm your credit scores. Therefore, it’s essential to consider the impact on your total credit limit before deciding to cancel a card, especially if the card has a high limit.

CreditNinja: A Note When Considering to Cancel a Credit Card

It may not always be wise to close a credit card. But if you struggle with financial irresponsibility, there are tools available to help you stop impulse buying and save more

CreditNinja has an online blog that answers all types of financial questions. You could learn the benefits of a debt consolidation loan, how to start budgeting with irregular income, and much more! We know how much debt can negatively impact your life. That’s why CreditNinja aims to be a valuable finance resource! 


  1. How Many Credit Cards Should I Have?│Wall Street Journal
  2. How to Cancel a Credit Card │Forbes

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