Credit cards are extremely useful, it helps you manage your current cash flow, spread cost of purchases, and is a huge help when traveling. But, some credit cards are definitely much better than the others. The wrong credit card can surely a pitfall that can immediately create a snowball of debt for you.
But, canceling a card is not as easy as cutting it into half. There are some specific guidelines you have to follow if you wish to avoid the penalty.
The Need To Cancel
You may consider canceling, if one of the following applies to you:
• You rack up debts fast
• Card has high interest charges
• You have lots of cards you do not use
• Multiple cards and it becomes difficult to track your repayments
• You have found a much better credit card deal
Perth mortgage broker Jess Peletier says that lenders see you at risk of getting into more debts. The fewer cards you have means the lesser temptation you have and the higher chances of repaying any money you owed.
Steps In Canceling
If this is your first time to consider paying off your debt and canceling your credit card, then continue reading below.
Pay off your credit card balance
This should be on top of your list, especially for those that bear high interest rates. The moment you have cleared your outstanding balance you have to then call on your credit card service provider.
Call your credit card provider
Tell them that you have cleared all the balances that are due on your credit card and that you intend to close the account. For sure, they will try and ask you out of your plan. There is no danger in hearing what they have got to offer this time. They can offer a better deal for you at some point. But, be strong and make sure you don’t yield to their empty promises. When they are unable to offer you a much better deal, stand firm on your ground and go ahead and cancel that account. When they do, ask them to kindly send you a written confirmation of your account cancellation. This is very important, and as much as possible get all the information of the person in charge so you know who to approach if all else went wrong.
Write to the credit card company
Send them a short letter that you are confirming your intent to close your account with them, provide your account number in all of your email correspondence with them. Indicate that you wish it reported on your credit report and indicated clearly that you, and not the company who closed the account.
Check on your credit rating
Lastly, it is worth to take some time and check on your credit rating. Make sure it has not been badly damaged by the account closure. As it can happen when the service provider is careless and they indicated that the credit card has been closed down by them and not by you.