What is the best way to cancel a credit card?
Credit Card
insharc asked:
My credit rating is good, not bad. But I’ve heard that having too many cards can damage it. I know that calling is a bad way to cancell, plus they try to talk you out of it.
My credit rating is good, not bad. But I’ve heard that having too many cards can damage it. I know that calling is a bad way to cancell, plus they try to talk you out of it.
What is the BEST way to cancel, so the credit reporting agencies know that you canned the card, and not the reverse?
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March 12th, 2009 at 3:26 pm
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call your bank tell them your card is stolen please di-activate it.
March 14th, 2009 at 10:17 pm
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The best way IS to call the credit card company. They will ask you the reason for cancelling. Tell them it is a private issue and you do not wish to elaborate. But you can also tell them you may want to reapply sometime in the future but at this juncture it is best for me and for you to close my account. Be polite but firm about your statements. This should keep them from trying to ‘talk you out of it’. Also, when the closure is reported to the credit agencies, it is reported as closed by customer (It’s the law.)
March 15th, 2009 at 9:11 pm
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If you want to cancel credit cards to protect your credit rating, then the important issue is WHICH card to cancel. Credit scores are determined by 1) how much credit you have relative to your ability to pay it off, and 2) how long you have responsibly held that credit. So, you really want to cancel only the recently opened accounts, not the old ones (even if its an old piece of crap, non-platinum, no rewards, etc etc…), since it will reflect well on your score.
On the other hand, even if you had 30 years of great credit, but suddenly open up several new credit card accounts, your score will drop . So, cancel the ones that you have most recently opened. If all of your credit card accounts are relatively long held, there is no need to cancel them for the sake of your credit score.
As for the method, calling is fine, but yes, they will try to talk you out of it, and even worse, they will put you in the “wait for 45 minutes” call line if you push the button that says “press 4 to close your account.” And, more than likely, they won’t actually close it the first time, but if you are persistent, the account will be off of your credit report eventually (though you will need to double check on your next credit report).
Personally, I don’t know of any reporting difference between “you canning them” and the reverse. The only factors that the rating agencies care about is amount of credit, how long you have had it, and (of course) whether you have defaulted.
Good luck!
March 15th, 2009 at 9:37 pm
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The BEST way to cancel a credit card, if you must, is IN WRITING. Calling them will NOT protect your rights and they may SAY they’re closing it but it may never happen. IF you must call, follow it up with letter that re-states your request to close the account.
It is simply unwise to rely on the telephone. IF you read your credit card agreement, you will find that you must cancel in writing.
March 16th, 2009 at 8:50 am
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What I do is call the credit card company and play that game. Yeah, they are jerks. But it will immediately stop the interest and fees if you cancel by phone.
Ten follow it up with a written letter, certified mail. I’ve had cases where they say they will close it but they don’t. The letter covers you on that issue.
Regarding how it’s reported on your credit report, it’s VERY importing that it shows the customer closed the account, and not the creditor. It will reflect on your score, and if someone were to look at your report, it only brings up questions of why it was closed. Bankruptcy? Delinquency? So make SURE you tell them to report it correctly IN THE LETTER. It will make it much easier for you to correct it in the future this way.
While ti’s true that too many cards can hurt your credit, it’s recommended that you have 2-3 cards. This will keep your credit history active.
Canceling cards will mess up your debt/credit ratio and your credit reporting history. Both are major factores when calculating your credit score.
March 16th, 2009 at 9:02 am
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You must never cancel a credit card.
That will hurt your credit score.