I remember when I first got my credit card, it felt like such a big milestone. It was my first step towards financial independence and I felt like I was finally an adult. I used the card responsibly, making sure to pay off the balance in full every month, and even earned some rewards along the way.
But as time went on, I started to notice some things about my card that didn’t sit well with me. The interest rate was quite high and I was being charged fees for things like late payments and balance transfers. I also realized that I wasn’t really using the rewards or benefits that the card offered.
So, I began to consider cancelling the card. But before making a decision, I wanted to explore the different reasons for cancelling a credit card and whether they applied to my situation.
In this blog, I will walk you through how to cancel a credit card from a credit card company, the reasons to cancel a credit card, as well as provide some considerations to keep in mind throughout the process.
Reasons to Cancel a Credit Card
High-interest rates or fees
One common reason to cancel a credit card is high-interest rates or fees. This was definitely an issue for me, as I felt like I was paying more than I needed to in order to use the card. I did some research and found that there were other cards on the market with lower interest rates and fewer fees, which made cancelling my current card seem like a good option.
Unused benefits or rewards
Another reason to cancel a credit card is unused benefits or rewards. While my card did offer some rewards, I realized that I wasn’t really taking advantage of them. I wasn’t travelling enough to use the travel rewards or earning enough cashback to make it worth it. So, I figured that cancelling the card wouldn’t really impact me too much in terms of rewards.
Too many credit cards
Having too many credit cards is another reason that some people choose to cancel a card. While I only had one card, I could see how having multiple cards could be overwhelming and lead to overspending. I also knew that having too many cards could negatively impact my credit score, so I wanted to be careful about how many cards I had open at any given time.
Switching to a different card
Finally, I considered switching to a different card as a reason for cancelling my current card. I had heard about cards with better rewards or lower interest rates and thought that it might be worth exploring my options. However, I knew that switching cards could also impact my credit score, so I wanted to make sure that I had a plan in place before making any changes.
Cancelling my credit card was definitely a big decision, but it was the right one for me at the time. By considering the different reasons to cancel a credit card and carefully evaluating my own situation, I was able to make an informed choice that helped me improve my financial well-being.
Considerations When Cancelling a Credit Card
As I was considering cancelling my credit card, there were a few important factors that I needed to take into account. These considerations helped me to make a more informed decision and ensure that I was taking the right steps to protect my finances.
One of the biggest factors that I had to think about was the potential impact on my credit score. I knew that cancelling a credit card could potentially hurt my score, especially if I had a high balance or a long credit history with the card. However, I also knew that carrying a high balance or having too many credit cards could also negatively impact my score. I decided to consult with a financial advisor and run some simulations to see how cancelling the card would impact my credit score in the short and long term. Based on that information, I felt more confident in my decision to cancel the card.
Another important consideration was any unused rewards or benefits that I might be giving up. I had accumulated a decent amount of rewards points with my credit card, and I didn’t want to lose them if I cancelled the card. I carefully reviewed the terms and conditions to see if there were any restrictions or penalties associated with cancelling the card before redeeming the rewards. I also researched alternative ways to use the rewards points, such as transferring them to a different rewards program or using them to offset other expenses.
Finally, I had to think about any automatic payments or subscriptions that were linked to the card. I didn’t want to accidentally cancel the card and then find out that my gym membership or Netflix subscription had been cancelled as well. To avoid this, I carefully reviewed all of my accounts and made a list of any automatic payments or subscriptions that were linked to the card. I then took the time to update those accounts with a new payment method before cancelling the card.
How to Cancel a Credit Card From a Credit Card Company
After deciding to cancel a credit card, I knew that there were some steps that I needed to take in order to make sure that the process went smoothly. I wanted to make sure that I didn’t accidentally miss anything and end up with lingering debt or issues with my credit score.
The first step was to review the terms and conditions of the card. I wanted to make sure that I understood any potential penalties or fees associated with cancelling the card, as well as any other important information that I needed to be aware of.
Once I had a good grasp of the terms and conditions, I made sure to pay off any outstanding balance on the card. This was important because if there was still a balance when I cancelled the card, I could end up being charged interest or fees. I wanted to avoid any unnecessary costs, so I made sure to pay off the balance in full before moving forward.
Next, I called the credit card company’s customer service number. This was a bit nerve-wracking for me, as I had never cancelled a credit card before and didn’t really know what to expect. However, I found that the representative on the other end of the line was very friendly and helpful.
I followed the prompts to speak with a representative and provided my account information. The representative asked me why I wanted to cancel the card, and I explained my reasons. They then went through a few more steps to confirm my identity and ensure that I understood the implications of cancelling the card.
Once everything was in order, I requested confirmation of the cancellation. This was important to me because I wanted to make sure that there was a record of the cancellation in case any issues came up in the future. The representative provided me with confirmation and some additional information about how to monitor my credit score and ensure that everything was in order.
Finally, I cut up or destroyed the physical card. This might seem like a small step, but it was important for me to physically sever ties with the card and make sure that it wouldn’t accidentally get used in the future.
In conclusion, cancelling a credit card can be a daunting task, but it is sometimes necessary to protect your finances and credit score. Through my own experience, I learned the importance of reviewing the terms and conditions of the card, paying off any outstanding balances, and contacting the credit card company’s customer service to properly cancel the card.
I also discovered the importance of considering the potential impact on my credit score, any unused rewards or benefits, and automatic payments or subscriptions linked to the card. By taking these considerations into account, I was able to make a more informed decision and ensure that I was taking the right steps to protect my finances.
It is also important to remember to monitor your credit report for any changes after cancelling a credit card. This can help you to ensure that your credit score is not negatively impacted and that there are no unauthorized transactions on your account.
In the end, cancelling a credit card can be a difficult decision, but with careful consideration and proper steps, it can also be a smart financial move. By following the guidelines outlined in this article, you can make an informed decision and take the necessary steps to protect your finances and credit score.