5 Steps To Follow Before You Close Your Credit Card
Closing out a credit card is something most people will have to do at some point. It’s not a difficult process, but there are a few steps you’ll need to follow if you’re going to do it safely. We’ll cover each one of them below.
1. Pay Off Any Outstanding Debt on the Card
The first thing you’ll want to do before you cancel one of your credit cards is to make sure that you’ve paid off any outstanding balance on it. You can do this the same way you usually pay your bill, either through the card company’s website or app.
If you still owe a significant amount of money on that card, you’ll need to pay it off in full before you close out the account. A debt payoff calculator can help you determine when and how you can become debt-free. Once you’ve paid the card off you can move forward with the rest of these steps.
2. Redeem Any Rewards You Have Available
Many individuals open accounts with certain card companies because they want to take advantage of the rewards they offer. You might enjoy redeeming those rewards in the form of flights, gift cards, merchandise from your favorite stores, etc.
Redeem any rewards you have left on your card before closing it out. You earned those perks, and you’ll probably be sad if you lose them. Remember, though, that some card companies require you to have a certain amount of reward points before you can redeem. If you didn’t reach that set amount, you might not be able to utilize your remaining points.
3. Switch Cards if You’ve Set Up Automatic Payments
Next, you can check to see if you have any automatic payments that you make monthly or quarterly with that credit card. Perhaps you’re using that card for things like utilities or to pay for monthly streaming services.
If you have another credit card, you can input the information for that account so that any entities you need to pay will now use this alternate card instead of the one you’re going to cancel. It’s helpful if you retain a master list of all the subscriptions or services you pay for with each one of your credit cards. This way, it’s easy to switch over from one payment method to another.
4. Contact Your Credit Card Company to Cancel the Card
After completing steps one through three, you will then reach out to your credit card company to let them know you’re closing the account. You can do this online through the company’s live chat feature, or by calling and speaking to a customer service representative instead.
When you do this, you can make sure you don’t owe any outstanding balance on the card. The company might sometimes give you a reference number indicating they closed out the account as you requested. Save this information for your records.
5. Destroy the Physical Card
Destroying the physical credit card should be the last item on your list. You can usually do that with a sharp pair of scissors or a paper shredder if you have one.
Make sure that you cut the card up or shred it completely. You don’t want to run the risk of someone rooting through your trash and piecing the card together again if you did not dispose of it properly.
