Before you close a card, make sure you review your credit history to see how it will be affected. You can obtain your credit score for free from many issuers by simply requesting it. Numerous websites offer credit scores for free. Although they may not be as precise as FICO scores, these scores can give you an indication of where your credit is at.
Close inactive credit cards or those that are not frequently used
Credit cards are an important tool in your financial planning, but they can become unusable at times. There may be high annual fees, high interest rate, or rewards that simply aren’t enough. Whatever the reason for closing them, it is important that you understand how they will impact your credit score as well as how to manage the change.
The FICO Score may be lower if you close a credit account. It is a smart decision to consider whether closing an account that is inactive or not used frequently is in your best interest. Closing an inactive account doesn't improve your credit score, but it can reduce the temptation to make unnecessary charges.
An inactive or infrequently used credit account should be closed. Consider opening an online shopping account using the infrequently used card. You can make small purchases over the course of a few months, and then pay them off in your next billing cycle. This strategy will ensure that your credit limit is high and you are responsible with credit.
Cancel cards with outstanding balance
First, contact the credit card company to cancel credit cards with outstanding balances. You should be able call customer service to cancel your credit card. Before closing your account, make sure that you have verified that there is no balance. You may also find residual interest on your account. Also, closing an account may require a significant amount of time and effort.
Your credit report can take many months to reflect the cancellation. Regardless of how you cancel a card, make sure you get a written confirmation from the issuer. You will be able to track the time your account was closed. You could be charged additional fees if you don't.
If you aren’t sure whether to cancel a creditcard with an outstanding balance, consult a financial professional. A card with a current balance is sometimes the best solution for creditors who cannot make payments.
Cancel cards with a low balance before closing
Be sure to contact your credit provider before you close your credit-card account. You'll need to tell them you'd like to cancel the account and confirm that the balance is zero. Otherwise, residual income will accrue following the final payment. It is possible to reach them to ask about a reward program or a new rate.
To cancel your credit card account, contact the credit card issuer and ask for written confirmation that the account balance is $0 before closing it. You can check your credit reports between 30 and 45 business days after cancelling the account. The account should be closed and the balance $0. However, if the balance appears to still exist, you can file a dispute at the credit bureaus to have it removed.
It may be necessary to close joint credit cards if you are going though a divorce or separation. This will ensure that you don't make regrettable purchases. If you are working on debt management, closing your joint credit card will help you to concentrate on paying off other loans.