In some situations, closing your credit card is your only option. It can help a person improve their credit score by getting them out of a certain high rate agreement. If you want to go through the cancellation process without any hidden fees or other unpleasant surprises, just follow the five tips below…
1. Always Read the Small Print when closing your credit card
Just like most credit card processing reviews say, you always have to look out for any hidden fees. Therefore, before calling up the bank and cancelling the card, you should re-read your holder’s agreement and look at the closing procedures. There maybe are some hidden penalties you didn’t know about – you may even find out there a fee for early closures.
2. Collect Your Rewards
Here’s something most people don’t know – all of the rewards you managed to earn still belong to you after you close your card. However, you should collect any rewards you have before you actually close the card – just in case. And if you still need a certain amount of points to get a reward, think twice about closing the card.
3. Cancel Any Auto-Payments
Again, before you make a move, you should check a few things out. Go to your credit card provider’s site and see if there any auto-payments or auto-transfers toward your card. If there are, cancel them immediately. Failing to do so will result in payments going through on 0-dollar balance. Best case scenario – you’ll end up doing a ton of useless paper work; worst case scenario – you’ll end up paying additional fees.
4. Change Your Bill Payments
Take the last statement and go over it. See if you have some recurring charges or bills set up with the card you plan on canceling. Change these payment methods if you don’t want any additional charges appearing on your card. By doing this, you’ll remove any possible non-payment fees that may occur because your card doesn’t work anymore.
5. Get a Written Confirmation on closing your credit card
When you finally decide to make a call, you should ask your credit company to send you a written confirmation. This letter should have the close request and the date of closure on it. Put this letter in your records. If you notice anything strange concerning the canceled card on your annual credit report you’ll have proof that you did close the card and the account.
Lastly, you should definitely get your report at least a few weeks after closing the card – especially if you have closed multiple credit cards. This will ensure that everything has gone as planned. And the sooner you do this, the simpler it will be to deal with something unexpected.
And keep in mind – a credit card can still affect your credit score – even if you don’t carry any balance on it. Look at the cards you have and consider whether you should close them or not. Getting rid of needless cards will allow you to remove all of that deadweight preventing you from having a good score.