Closing a credit card might sound as simple as cutting it into pieces — but in reality, there’s more to it than that. If not done properly, it can hurt your credit score, cause unexpected fees, and even lead to identity theft risks. Whether you’re closing a card because of high fees, poor benefits, or simply because you don’t use it anymore, following the right steps is essential.
In this guide, we’ll explain how to close a credit card properly, what to do before and after closing it, and common mistakes to avoid.
Why Do People Close Credit Cards?
People choose to close credit cards for many reasons, such as:
- High annual fees that outweigh the benefits.
- Better alternatives available in the market.
- Lack of use — unused cards can still impact your credit profile.
- Change in spending habits or financial priorities.
- Poor customer service from the issuer.
While these reasons are valid, it’s important to remember that closing a credit card can affect your credit score due to changes in your credit utilization ratio and credit history length. That’s why you need a careful approach.
Steps to Close a Credit Card Properly
1. Evaluate the Impact on Your Credit Score
Before closing your card, understand how it may affect your credit score.
- If the card has a long credit history or a high credit limit, closing it might reduce your overall credit limit, increasing your credit utilization ratio.
- If it’s your only credit card, closing it will remove your revolving credit account from your credit mix.
Tip: If possible, keep your oldest card open to maintain your credit history length.
2. Redeem Any Remaining Rewards or Points
Many credit cards come with cashback, reward points, or miles. If you close the card without redeeming them, you’ll lose them permanently.
- Log in to your online account.
- Check your rewards balance.
- Redeem for statement credits, vouchers, or transfer points before initiating closure.
3. Pay Off the Outstanding Balance in Full
You cannot close a card with an unpaid balance. Make sure:
- All pending transactions are cleared.
- EMI or loan-on-card balances are paid.
- Automatic subscriptions linked to the card are cancelled or moved to another payment method.
Tip: Wait a few days after the final payment to ensure there are no residual charges like interest or late fees.
4. Contact Customer Care to Request Closure
Once your balance is zero, call your bank’s customer care number. Provide:
- Your card number.
- Personal identification details for verification.
- A formal request to close the card.
Ask for:
- Written confirmation (email or letter) that the account is closed.
- A final statement showing a zero balance.
5. Follow Up in Writing
Send a formal email or letter to the bank stating:
- The request to close your credit card.
- The date of your call with customer care.
- Request for confirmation once processed.
Keeping written records helps if there’s ever a dispute.
6. Physically Destroy the Card
Once closure is confirmed:
- Cut through the chip and magnetic strip.
- Dispose of the pieces in different bins to avoid misuse.
7. Check Your Credit Report After Closure
Wait for about 30–45 days and check your CIBIL or other credit reports to ensure the card is marked as “Closed at customer’s request.”
- If it’s still showing as active, follow up with your bank immediately.
⚠️ Common Mistakes to Avoid When Closing a Credit Card
- Closing your oldest card → This can shorten your credit history and hurt your score.
- Leaving a balance unpaid → Interest will keep adding up.
- Not cancelling auto-payments → Can lead to failed payments or overdraft fees.
- Failing to get written proof → Leaves you vulnerable to future disputes.
Alternatives to Closing a Credit Card
Sometimes, you might not need to close your card completely. Instead, you can:
- Request a downgrade to a no-annual-fee card.
- Reduce the credit limit if overspending is a concern.
- Keep it active with minimal use to maintain credit history.
Final Thoughts
Closing a credit card is a personal financial decision, but doing it the wrong way can cost you. By redeeming rewards, clearing balances, contacting the issuer, and monitoring your credit report, you can ensure a smooth and safe closure process.
If you’re unsure about the impact on your credit score, consult a financial advisor before taking action. Remember: a well-managed credit history is a powerful tool for your future borrowing needs.
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