How to close a credit card the right way—A complete guide

Closing or cancelling a credit card is a big financial decision which could impact your credit score and overall financial health. Should any of these motives apply-debt consolidation, avoidance of an annual fee, or general simplification-it is crucial to follow the proper procedure. Here we will describe the main steps to be taken while cancelling a credit card in such a way that their effects on the credit score are minimized.

Things to consider when cancelling your credit card

Before cancelling a credit card, keep the following in mind:

• Eliminate outstanding balance: You must clear all charges. Should there be an unpaid balance, you cannot request for cancellation.
• Know the procedure: It may differ from one credit card to another, so be sure to check the procedures set by that specific bank.
• Losing reward points: When you cancel a credit card, very often you will lose reward points that you accumulated from the purchases.
• Remove automatic payments: Change any recurring payments associated with the card to another method of payment before cancelling it.

Ways to close/cancel a credit card

1) Through customer service

• To cancel your credit card, call the customer care unit of your bank.
• They will provide you with confirmation and further guidance on the necessary steps.

2) Through written request

• To start initiating closure, write to your credit card issuer requesting cancellation while including all relevant credit card information.

3) Through email

• Some banks allow cancellation of a credit card through e-mail.
• Be sure that your e-mail contains a request for cancellation, credit card information, and personal information.

4) Through online request

• Depending on the bank, one can usually close an account online.
• Log in to the bank's website, fill in the required fields, and send in the request.

How may a credit card be closed without lowering credit scores?

Closing a credit card account can affect your credit score, so it is imperative that you approach this line of action with care.

• Pay off all debts: If there is a due amount, closure may not be processed and this sort of situation can lead to a few points being docked from your credit score.
• Use reward points: When you close out a card account, you lose any unused rewards. Thus, redeem your reward points before this process.
• Contact the credit card provider: Call the bank to get your credit card cancelled. Prepare for them to offer some incentives to stay, and, if necessary, reiterate your decision.

In conclusion, cancelling a credit card is an important financial decision that should not be taken hastily. If this is done right, they can help control one's spending and safeguard against penalties. However, the effects this decision would have on credit scores should be checked.

(Note: Using a credit card carries its own set of risks.)