In the conditions of modern tough economy many people think about cancelling one or more credit cards that are not used by them. Nonetheless, cancelling a credit card is not as easy as you may think, partly because the companies prefer to keep you as a customer and also because cancelling cards can affect your credit rating very much. Here are a few recommendations for cancelling cards easily and safely.
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From the very beginning check if your card is paid off in full. If it is not fully covered, you can be subjected to some financial penalties, involving raised interest rate to the maximum limited amount, which can be more than 20%. It is easier to cancel a card with an outstanding balance remaining.
After the card is paid in full, address the issuing company and advice them that you are going to cancel the account. Usually you can find contact information on the back of the card. When you call them, you will be having some interesting talk, because they do not want to lose you as a client. They will offer a better percentage rate or a chance to switch to a better grade card. If you consider their offer to be enticing, it is the right time to be flexible and to cancel another card that will not give such perfect terms.
If you are advised about the company’s offer and still want to cancel the card, the next thing you should do is to send a letter to the company to tell them that you want your credit report to show that you cancelled the card on your own. It is an important aspect, because the last thing you want is to be showed as though they cancelled you. This will look bad for future creditors. Do not overlook this step, because it makes all the difference of obtaining credit or not.
You can review your credit report later by getting your free annual report and making sure that the details that you requested is on there. The report should reveal that you have cancelled the account. If you noticed any mistake, send a letter and demand that they change the information immediately to show your desire to close the account.
Cancelling Credit Cards Influence Credit Scores
From the other side, there may be moments in your life when you do not want to close credit accounts, I mean the situations in which you are attempting to enhance your credit score. For example, creditors will sometimes look at having much but unused credit as a positive thing.
See how long you have had a credit card before the account have been closed
Credit cards with a long history add up more in your credit score than latest accounts which may have better interest rates. If you have an old credit card, talk with the issuing company for a better interest rate so you can keep the older card instead of the newer one. So be careful when you’re thinking about a cancelling card just to cancel it.
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