Is it easy to cancel a credit card? | How to Cancel Credit Card 2025?

hinking of canceling your credit card? Here’s what you need to know about the process, its impact on your credit score, and how to make the best decision.

Key Takeaways

• Canceling a credit card can affect your credit score, especially by reducing your total credit limit and increasing credit utilization.
• Clear any outstanding balances and redeem rewards before closing your card.
• Consider alternatives, like downgrading your card or negotiating fees, before deciding to cancel.
• Keep your oldest card active to maintain a positive credit history.
• Review your credit report after canceling to ensure the account is properly closed.
• Dispose of your card securely after cancellation to protect your information.

If you come to this page, you must be searching for how to cancel the credit card. Recently I also faced the same situation. Due to a lack of proper guidance, I selected the wrong credit card that was not the right fit for me.

Now I am worried how can I cancel my credit card? . Is there will be any impact on my credit score? To get the answer to this question, I went through multiple articles, blogs, and videos.

Now, I am writing this article to share my experience of how I cancel my credit card and the related queries coming to your mind before canceling it.

Best time To Cancel a Credit Card?

There can be multiple reasons for canceling your credit card. Some people wanted to cancel it because of high debt. Also, there are many users who have multiple credit cards and want to reduce the number of cards to avoid the annual fees for all the cards. People attracted to the welcome offer of the new band can be the reason to close their credit card account.

So there can be the number of reasons for cancelling the credit card, but you must be thinking What will happen if I cancel my card? Will it negatively impact my credit score? And when should I clear all my outstanding amounts on the current credit card?

Impact on Credit score after closing credit Card?

If you have decided to close your credit card, ensure to redeem all the reward points you have earned. After submitting your application for cancellation, you will not have access to your card. However, you are responsible for any outstanding balance left on the card.

Moreover, closing credit card account can impact negatively impact your credit score. So always consider the pros and cons of closing a credit card account to avoid any unfavorable circumstances.

Take away before closing Your Credit Card account

Well, if you finally decided to close your credit card account that you are not using frequently, also the cards have some annual maintenance fee. Consider some reason to keep it still active.

If your situation is like the above, you can consider the below resolution. First of all, make a call to the credit card provider company and ask for a retention offer. It is a cost that the bank or the credit card company spends to attract new customers or to keep the existing keep.

There can be the possibilities that the bank offers you an annual fee refund or some bonus to keep you to continue using your card if you say that you are willing to close your credit card. Remember, before asking for this welcome offer, you must have spent a significant amount recently using your credit card. After all, calculate your worth before making the decision.

There is another you can choose. To avoid the annula free you can ask your same card provider to downgrade your credit card to another. This will allow you to use your card without paying any fees. Not every bank permits this rule; it varies from bank to bank. They have a few requirements, such as when the card can be downgraded or which card can be changed.

It is to be noted that if you have not used your card for a very long time. Credit card company may close your card. To avoid this issue, keep using it once in 3 months.

Does Canceling a Credit Card reduces credit score?

Experts have advised that closing a credit card account and a card with zero balance while closing can negatively impact your credit score. You can minimize the risk by following proper guidance on closing credit cards.

Credit Utilization

Closing a credit card account might cause an inadvertent rise in credit use. To determine your overall credit utilization, divide your entire credit balance by the sum of all your credit limits. If you cancel one of your cards, your overall credit limit will be reduced.

Carrying debt on your other credit cards can raise your credit utilization rate. If your utilization is excessive, it will most certainly have a negative impact on your credit score.

Credit Card Payment History

Credit history plays a significant role in applying for a loan or getting a new credit card. Closing your credit card account will not affect your credit history. Late payment, outstanding due, everything will be visible in your credit report.

Amounts balance

Your credit card balance is important when you apply to close your card. The overall account balance is the deciding factor for your credit score.

Length of Credit History

If you have the oldest credit card account, try to keep it alive because the longer account will positively impact your credit score. Annual fees are the main problem for keeping the old credit card not in use. Contact your card provider if they have any offers for you to avoid annual fees. Downgrading to another credit card with no annual fee can be the best option.

New Credit

Closing your credit card frequently can negatively impact your credit history, especially when you have a short credit history. Credit history greatly matters in opening a new account or getting a loan.

Credit Mix

Closing a credit card can impact your credit mix. It is the types of credit cards you have, such as credit cards, mortgages, car loans, etc. Think twice and close your account only if this is the last option left for you.

Reasons To Cancel a Credit Card

There can be multiple reasons to cancel your credit card. But take your decision wisely after understanding all the pros and cons of closing your card.

Separation or Divorce

If you have a joint account with your husband, it is normally better to terminate the account as soon as you separate. You will remain responsible for any charges on your credit card while your account remains.

A frustrated ex who rolls up excessive charges and runs might incur a large cost for the uninformed divorcee. Even if the division is friendly, little everyday expenses might be imposed without malice, and both parties remain responsible.

High Annual Fees

If you are lying in a situation where you pay the annual fee of the card and not using its benefits, which means the cost overcomes the benefits, then in this case, your best option is to close the card.
Now you have planned to cancel the card, but for satisfaction, call the card provider and ask for any discount or offer on the annual fee and mention that you wanted to discontinue the card.

Minimize the card use before Closing

Before closing your account, utilize all your reward points and stop using the credit card 15 days before closing the application, allowing the statement to close. This is the ideal practice before closing your credit card account.

Pay Off Your Balance in Full

Before closing your account, clear all your outstanding dues. Some company has a grace period system, so you can cancel the card at that time if your card has annual fees, and you will get a refund of annual fees.

If you have a zero balance on your card and receive your annual fee refund. If this happens, your credit card company will issue you a check by mail. Make a note of it and follow up to ensure you get the refund cheque.

Know your team member

If you use an employee or business credit card, make sure to inform all the cardholders that you have applied to close the card and instruct them to dispose of the existing card.

Check the Timing on Your Card Benefits

Before canceling your credit card, it’s important to consider the timing of any rewards or benefits associated with it. While some cards have straightforward earning structures, others offer time-sensitive perks that you might want to take advantage of before closing the account. Here are a few examples:

Hotel Credit Cards

Many hotel cards provide a free night on your account anniversary. Before canceling, check when this free night is credited to your hotel rewards account—it might be worth waiting until you’ve used it.

Points on Cardmember Anniversary

Some cards reward you with points on your card anniversary. Be sure to check if you have any upcoming points to claim before canceling.

Quarterly Bonus Categories

Certain cards offer bonus points in specific categories each quarter, up to a certain limit. If you’re close to maxing out these bonuses, it might be wise to cancel until you’ve earned the maximum reward.

Travel Benefits

Many cards offer travel perks like free checked bags, airport lounge access, or priority boarding. If you have an upcoming trip where these benefits could be useful, consider keeping the card active until after your travels.

How To Cancel a Credit Card in 6 Steps

If you have decided to cancel a credit card, Here is are some step you can follow:-

1. Before canceling, make sure to use up any rewards or points you’ve collected.
2. It’s important to pay off or reduce the balances on all your credit accounts, not just the ones you’re closing. Even if the card you’re canceling has a zero balance, leaving a balance on other cards can hurt your credit score due to higher credit utilization.
3. Call your credit card issuer or check online to ensure your balance is fully paid off and is at INR 0.
4. Contact your credit card issuer to cancel your account. Ask for written confirmation that your balance is zero before the account is officially closed.
5. After 30 to 45 days, review your credit report to make sure it shows that the account was closed by you and that the balance is zero.
6. If you spot any discrepancies on your credit report, promptly open a dispute with the credit bureaus to correct them.

Safely Dispose of Your Credit Card

After closing your credit card, be sure to dispose of it properly. If it’s a plastic card, simply cut it up with scissors. For metal cards, you might need tin snips. Additionally, make a note of the cancellation date in your records.

This is important because some credit cards have fine print that may prevent you from receiving welcome bonuses if you’ve opened or closed an account within the last 24 to 48 months.

Keeping track of your cancellation date can be helpful if you plan to apply for the same or a different card in the future.

Conclusion

In the above article, I shared my experience of how you can close your credit card. There are many reasons to keep the card active for the rewards and the offers, but if it is of no use for you and paying the annual changes is not the best deal.

So make sure to buid a healthy credit card portfolio before closing because cancelling card can impact your credit score. Take your decision after considering all the pros and cons, also if you need a personalised guide go for an expert for better guidance.

I hope all your doubts have been cleared, or if you have any queries, write in the comment section. Also, don’t forget to share this with your close friends and relatives who are facing similar issues.