When you have multiple cards and are looking at cutting down on them, the best way is to cancel those cards that aren’t of much use to you. Now, obviously the main use of a credit card is to be able get rewards as well as being able to spend as and when required. So, when you are looking at cancelling your credit card, ensure that you go ahead with it the right way as it could result in a lot of mess, incase it is not done.
Following are some of the steps to be followed in order to close your credit cards safely:
1) Once you have decided to close your card (or cards), call up the respective bank’s customer care and place a request for card cancellation.
2) Your next step should be to find out if you have any outstanding (or unpaid) amount on your card.
3) Pay off all your outstanding dues preferably in one shot or on a monthly basis.
4) After making the payments and ensuring that there is no unpaid amount whatsoever, inform the bank that you have paid the entire bill amount.
5) Check for the cancellation status and follow up with the bank until the point you get a communication from them that your card is closed.
6) Also, ensure that you get a no-dues/ proper closure letter from the bank for your own reference. (Why’s this important?*)
7) Cut up your card, and mentally remind yourself to not use those details in future transactions.
Here are some of the important points to be kept in mind while closing your card:
- If the outstanding on your card is not payable in one shot by you, then you can choose to pay it on a monthly basis. However, you must know that there will be loan interest rates charged on the amount payable every month.
- Ensure that there is no unpaid amount on your card because nobody will close a card with any amount of outstanding on it.
- No bank or financial institution will take the initiative of cancelling your card, continuous follow up from our side is what will help you in cancelling your card on time.
- It is very much necessary to cancel your card in the proper way because your cibil score could be affected in one of the two ways:
1. If you have closed your card with unpaid outstanding still remaining
2. Sometimes, there could be a situation because of which there are chances of wrong entry in your cibil report which could result in derogatory marks in your report as well as lowering of your cibil score.
- Get a No dues or proper closure letter from the bank as evidence for the cancellation, this document could also be used in case a dispute arises later on.
- Ensure that you see your cibil report after you have cancelled your card, just to check for any change in your cibil score or report.