Establishing credit is a necessity for "Nesties" who dream to buy a house or new car, and getting a revolving credit card does just that. When you get a revolving credit card account, the credit card company lets you carry a balance and make minimum monthly payments. Although this is handy and flexible, too many open credit cards might affect your credit negatively. Closing a credit card you no longer use can free up debt and get your credit ready for more important purchases.
Pay the Balance
Put yourself in the shoes of the credit card company. Would you allow a customer to cancel a credit card if that person still owed you money? Probably not, so plan on paying off the balance before making the call. Call the credit card issuer and ask for the "Pay Off" amount. If your credit card company charges interest daily, the representative will give you a date the "Pay Off" amount expires. Pay the balance by this day, or you will be charged additional charges and interest. Don’t tell the rep you plan to close the account. Some credit card companies have a universal default clause in the card member agreement. If you appear to be a risk, and closing an account is a risk in their eyes, the company can reevaluate your credit. Occasionally, the company will even impose higher interest rates and additional charges.
Close the Account
After you pay off the balance, call the credit card company again and verify your account has a zero balance. At that point, tell them you want to close the account. Generally, credit card companies will try to pressure you to keep the account open with offers like a lower interest rate. It is cheaper for the card issuer to keep you as a customer than to find other customers. If you are positive you want to close the account, be firm and don't bite on any of these new offers. Keep track of every conversation you have with the credit card company. You'll need to have a record of the date and time of the call, its purpose, and the rep you talked with in case the account is not closed as promised.
Write a Letter
You'll also want verification from the credit card people that shows the exact date the account was closed and your zero balance. Although most credit card companies will do this automatically, it's better to be safe than sorry. Write a letter to the credit card company and include your name, account number, mailing address, phone number and details of the call you made to cancel the account. In addition, remind the company to tell the credit reporting bureaus your account was "Closed at Consumer's Request." Mail the letter using certified mail and request a signed return receipt. That's a sure way to know the company received your request.
You should receive the verification letter from the credit card company within 30 days. Once you do, check your credit report at AnnualCreditReport.com. If everything went according to plan, it should say the account was "Closed at Consumer's Request." If those words don't appear next to the account, or worse, you never got a verification at all, you'll have to contact the card company by phone again. If two attempts fail to get anything done, get the Better Business Bureau involved. Contact them at bbb.org.
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