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Debt

How to Cancel a Credit Card

Ready to make some money moves and ditch those credit cards once and for all? You won’t regret it. Trust us, the best type of credit card is the one that’s cut up and on its way to the incinerator.

But just because you shred your cards and vow to never use them again, it doesn’t mean they’re gone—you have to close the accounts too. If you’re wondering how to cancel a credit card for good, you’ve come to the right place.

The process is pretty simple, but if you go to the wrong source for advice, you’ll get bombarded with conflicting information. Turns out, many people will try to tell you closing a credit card is the worst decision of your life. Don’t worry, that’s not even a tiny bit true.

Here’s the right (and no-nonsense) way to cancel your credit card accounts.

How to Cancel a Credit Card

Ready to say goodbye to your credit cards once and for all? We couldn’t be more proud. But now that you’ve cut those puppies up, it’s time to close the accounts—every last one. Ready? Don’t turn back now . . . you’re on the right track to freedom.

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Here are five steps to canceling your credit card with ease:

1. Cut up your credit card.

We’ve mentioned it a few times already, but that’s how serious we are about this step. If you haven’t already, get out your heavy-duty scissors and start snipping away at those no-good pieces of plastic. Not only is it great therapy for a stressful day, it’s the first step toward a life of debt freedom. You won’t be sorry. And if you haven’t paid off your card yet, that’s okay. Cutting it up won’t affect your current balance. It just makes sure you won’t add to it.

2. Pay off your card balance.

If you still have a balance on your credit card account, it’s time to pay it off. You won’t be able to officially close your account until your balance is zero. So, whether you’ve got a $5 balance or a $25,000 balance, start putting every single extra dollar you have toward knocking it out. Depending on how much you owe, this might take a little time, but don’t be discouraged. Every dollar earned, every extra hour worked—it all counts. When you’re focused on your goal, you will succeed.

Plus, the process will go a lot faster when you make (and stick to) a zero-based budget. This is when your expenses minus your income equals zero. Download our free, zero-based budgeting app, EveryDollar, and start tracking your money today. You’ll have that credit card paid off in no time.

3. Call your credit card company, bank or issuer.

Closing your credit card can be a breeze, but it can also be a bit tricky. Either way, it’s worth your time and effort to officially close the account. Be ready to stand your ground—because credit card companies really don’t want to lose your account.

So, get out your phone and call your card’s customer service. Let them know you and your credit card account are breaking up. (You don’t have to use those exact words, but feel free to get creative here.)

A word of warning, though: The customer service rep won’t let you off the hook easily. They’ve been trained for this moment—and they’ll do all they can to keep you on the line so they can try to change your mind.

If that’s the case, just stay calm and repeat, “I’m calling to close my account.” And that’s all you have to say! Not even another word. Listen, they’ll say a lot of things to try to keep you from closing your account. But don’t fall for these gimmicks:

  • You’ll lose all your hard-earned reward points.
  • Your FICO score will never be the same.
  • No more cash back bonuses for you.

Once they realize you’re not picking up what they’re putting down, they’ll probably try to win you over with some freebies like:

  • We’ll give you 5,000 airline miles.
  • What if we waive your annual fee?
  • How about no fees?

Whatever you do, don’t fall for it. They’re not trying to shower you with gifts. They’re trying to keep the thousands of dollars in revenue you represent— because when they see you, they see dollar signs. So, be prepared. You might have to fight (with class, of course) to close your credit card account.

If you aren’t getting through to the person on the other end, don’t be afraid to ask for their manager. Just keep telling them you want to close your account. They’ll do it eventually, when they realize you can’t be bribed.

4. Get confirmation in writing.

Here’s the most important part: Get it in writing! No matter what you do, you want written confirmation from the credit card company that you closed your account.

And keep your own record of the conversation too. Be as detailed as possible, and remember what your English teacher said: who, what, when, where and why. Recording these details will come in handy if the credit card company gives you any trouble down the road.

Use your notes to write the credit card company a certified letter with the details of your conversation, including date, time, names and any confirmation numbers you received. Make sure to request a written statement that shows your balance is all clear and your account is completely closed.

5. Never look back.

Congratulations! We’re patting you on the back right now. While others are keeping old accounts open to “save” their almighty credit score, you’ve taken a huge step on the path toward being free from debt for good.

So, what now? (We’re so glad you asked.) If you have more credit cards, it’s time to scroll back up and repeat the process. Call your friends and family and lead the way in showing them how to close their credit card accounts too.

When Should You Cancel a Credit Card?

We’re tempted to say right now. But like we explained earlier, you should cancel your credit card once you’ve completely paid off your balance. Yep—your account statement should have a big ol’ goose egg at the bottom, which means you owe absolutely nothing to those big wigs in the corner offices at Mastercard or Visa.

But that doesn’t mean you should wait to cut up your cards. When it comes to credit card debt, the best way forward begins with never going back.

What Happens to Your Credit When You Close a Credit Card?

Ah, the FICO score. Around here, we hate the FICO score. The whole system is based on how well you handle debt. And that makes absolutely no sense.

Society tells us we have to have a credit score to do just about anything (like buy a house or a car or rent an apartment). But you don’t have to play that game—especially when it comes to your credit card.

When you close your credit card account, your score will drop a little but only for a short period of time. So if you’re one who watches your credit score like a hawk, don’t worry. And if you couldn’t care less, that’s okay too. Because when it comes down to it, your credit score doesn’t measure your worth—you get to do that.

Other Questions About Closing a Credit Card

Can I cancel my card online?

Great question. In this digital age, it only makes sense that you’d be able to close your credit card account with a few clicks, right? But not surprisingly, most credit card companies want to make it as hard as possible for you to close your account, so many of them don’t offer that option. But every company is different. It doesn’t hurt to double-check their website. Either way you go—get proof in writing from the credit card company that your account is closed.

Is it bad to cancel a credit card right away?

Listen: Canceling a credit card is always the best option. So, if you signed up for a brand-new card and decided it was a terrible decision—you’re right. Closing a credit card soon after signing up will probably put a small dent in your credit score, though. Why? Because you’re not playing credit card companies’ game. In this world, the more debt you have (and prove to play well with), the better your score. Weird, huh? 

Is it better to let a credit card expire or to close it?

Again, it depends on who you ask. If you ask the credit reporting systems, they’ll say it’s always better to keep your credit card account open for as long as possible. Somehow (even if you’re not using it), keeping your card open shows that you’re responsible with credit. Go figure. And you probably won’t be penalized if you let it expire. But here’s the thing: If you’re not going to use credit, what do you need the account for? Yep, if you ask us, it’s time to close that thing for good.

Living Debt-Free

Now that you’ve gotten a taste of what it’s like to shake off that credit card debt, it’s time to tackle the rest—until it’s completely gone. Decide right now that you’ve had it with debt. Yup, we’re talking about student loans, personal loans and even those buy now, pay later schemes. But how?

Glad you asked. Here are a few tips to help you get started:

  • Start doing a regular budget. It will put you back in the driver’s seat with your money (where you belong). But we don’t want you to start just any budget. It needs to be a zero-based budget, where your income minus your expenses equals zero. And if you’re not sure how to start, EveryDollar can help (and it’s free).
  • Tackle your debt with the debt snowballList all your debts from smallest to largest—regardless of interest rate. Then, pay the minimum payment on everything but the little one, and attack that one with everything you’ve got. (Throw as much money as you can at it.) When that one is gone, put that payment toward the next-smallest debt. Repeat the process until your debts are completely gone. 
     
  • Follow the 7 Baby Steps to freedom. Paying off all your debts isn’t for the fainthearted. You have to get angry at them. You have to get mad. And then you have to work hard—harder than you’ve ever worked—to free yourself from those heavy chains. But you don’t have to do it alone. The 7 Baby Steps are here to guide you along your journey from living paycheck to paycheck all the way to living and giving like no one else.

Listen, we know that closing your credit card can be a hard decision. Why? Because the almighty FICO wants you to think you won’t be able to live a normal life without a credit card (and an amazing credit score). But who wants normal? Be weird! The fact is, debt is a trap. And credit cards are the bait.

When you close your credit card accounts, you’re taking the first step down the road to weird (aka a life free from debt). But if you really want to take control of your money, Financial Peace University (FPU) will show you how! In this nine-lesson course, you’ll learn how to pay off debt, save for emergencies, and build wealth for your future—without credit holding you back. 

It's time to ditch debt. Start FPU today!

Ramsey Solutions

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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