What is the difference between CLOSING and CANCELLING a credit card account?
Credit Card
ac asked:
I know that no one should ever cancel a credit card, so I knew when getting my first one it was important decision because I would have it forever basically. So what exactly does it mean to CLOSE an account?? How is this better than cancelling a credit card?
I know that no one should ever cancel a credit card, so I knew when getting my first one it was important decision because I would have it forever basically. So what exactly does it mean to CLOSE an account?? How is this better than cancelling a credit card?
And, what is the difference between formally closing an account or just having a zero balance and shreading it??
Thank you in advance for your clarification!
Lee
July 10th, 2009 at 9:59 am
Hazel
If an account is closed, then you can’t charge anything on it again.
If it simply has zero balance, then you (or an identity thief) can run up a balance.
July 12th, 2009 at 2:40 pm
Todd
It is not true that you should never cancel a card or close an account. However, it is important to have an old one that is open, so you should only close or cancel one if you have another old one.
If you have a zero balance and shred the card, but do not formally close the account, then the account remains open on the books of the bank. This means that any annual fee continues to be charged and that the account continues to be reported to credit reporting agencies. Also, if you ever want to resume using the account, you can have a new card sent without reapplying.
July 14th, 2009 at 5:07 am
Jerome
Why shouldn’t you cancel a credit card? That is the first thing I would do if my purse was stolen or I had lost my card. Although my card has been cancelled, the account is still open at the bank unless I choose to close it.