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When used judiciously, a credit card can be an incredible tool that can help you get more out of your spending. However, sometimes, it can affect your financial health adversely. It can come with high annual fees, not enough benefits, or can even lead to overspending. In such situations, it might be best to clear the balance and close the credit card. These days, you can easily cancel your credit cards both online and offline within a couple of minutes. In this article, we’ve detailed out the credit card cancellation process and things to keep in mind while doing so. 

How to Close/Cancel a Credit Card?

1. Online Method

Here’s how you can close your credit card online: 

 

A. By visiting the credit card issuer’s official website

  • Step 1: Visit your credit card provider’s website.

  • Step 2: Fill out the credit card cancellation or closure form.

  • Step 3: Submit the form.

 

Post form submission, you will likely receive a call from a bank representative to verify and confirm the credit card cancellation request. 

Bear in mind that these steps are only indicative, your credit card provider may have a different process to close credit cards. It’s best to check with them beforehand. 

 

B. By sending an email to the card issuer

 

You can also cancel your credit card by contacting the card issuer through email. Email them on their official email address or any specific email address that they may have for credit card cancellations. Make sure to include all relevant information as indicated on their website. Be careful as to not reveal any sensitive information like your CVV number, unless it’s a trusted entity. Once you’ve sent the email, a representative from the credit card company will reach out to you to guide you through the cancellation process. 

2. Offline Method

Here’s how you can cancel a credit card offline 

 

A. By calling the customer service team 

 

You can call the credit card issuer’s customer care team and request a credit card cancellation. A representative will help you through the entire process. 

 

B. By visiting a bank brand

 

You can cancel your credit card by visiting the credit card issuer’s branch office. You can talk to a representative there and get started with the cancellation process. Make sure to have all important information handy to ensure a smooth process. 

 

C. By submitting a written request

 

You can send a post to the card issuer’s corporate office indicating that you’d like to cancel your credit card. Alternatively, you may also fill up a credit card cancellation form and mail it to them. You can find their postal address on their website or by getting in touch with their customer care team. 

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Reasons Why You Must Consider Cancelling Your Credit Card

Cancelling a credit card may not always be the best option, as it can affect your credit score adversely. However, there are some situations where the pros of cancelling a credit card outweigh the cons. In such situations, you may be better off cancelling a credit card. Here are some points to look into if you’re on the fence about cancelling your credit card: 

  • High Annual Fees 

If your credit card comes with very high annual fees, it may make sense to cancel your credit card. Especially if you hardly use the credit card or if the perks offered by the credit card are simply not worth the annual fee. 

  • Separation or Divorce 

Many couples have joint credit card accounts and for good reason. Joint credit cards can help couples manage their finances effectively and enjoy some attractive perks. However, if you are separated from your partner, it doesn’t make sense to have a joint credit card. If that’s the case with you, you might want to consider cancelling your credit card. 

  • Bad Spending Habits 

A credit card makes it incredibly easy to make purchases, which can lead to overspending. This can have a negative effect on your financial health. It may be a good idea to take a look at your credit card statement and analyse your spending to understand where your money is going. If you find that you’ve been making too many unnecessary purchases with a credit card, then it might serve you well to go ahead and cancel it.  

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Things to Keep in Mind While Cancelling Your Credit Card

Here are some points that are worth keeping in mind to ensure that your credit card cancellation process is smooth and stress-free. 

  • Clear All Outstanding Dues 

Make sure to clear any outstanding balance on your credit card before cancelling it. In case you fail to do so, your credit card provider will not allow you to close your account. Moreover, in case there is a balance on your credit card when you close your account, your credit score will likely fall. Closing a credit card without paying your outstanding balance is a very bad financial practice that indicates to credit bureaus that you are not a financially prudent person. 

  • Redeem Rewards and Offers 

Most credit cards come with some exciting offers, make sure to take advantage of these before you close your card. Be gift vouchers, lounge access, or golf rounds, it’s a good idea to enjoy these perks before they’re gone. On that note, if you have accumulated some reward points or air miles, make sure to redeem those as well. 

  • Learn About the Closing Process 

It’s important that you understand the credit card closure process. Make sure to acquaint yourself with the fees and charges (if applicable) involved, the documentation that you will need, the turnaround time, etc. This will help you stay on top of the process. 

  • Avoid Making New Transactions

It’s best that you avoid making transactions on the credit card that you wish to cancel after you’ve raised a request to cancel it. If you have any standing instructions on said card, make sure to cancel them or redirect them. 

  • Cancel Any Add-on Cards

If you have taken advantage of the add-on card feature, then make sure to stop making transactions on that card as well. It’s likely that the add-on card will get cancelled automatically but it’s best to check with the credit card issuer beforehand. 

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Customer Support to Cancel a Credit Card

Here are the customer support contact numbers for some of India’s leading credit card issuers: 

Top Credit Card Issuers

Customer Care Number

SBI Card

1800 180 1290

Axis Bank

1800 209 5577

Kotak Mahindra Bank

1860 266 2666

HSBC

1860 500 2277

HDFC

1800 266 4332

YES Bank

1800 103 6000

IndusInd Bank

1860 500 5004

American Express

1800 419 1092

Bank of Baroda

1800 225 100

IDBI Bank

1800 200 1947

RBL Bank

1800 121 9050

Bank of India

1800 220 229/ 1800 103 1906

Corporation Bank

1800 22 6606

Consequences of Cancelling Credit Cards

When credit cards are closed haphazardly, they can have some negative consequences. Here are some of them:

  • Increased Credit Utilisation Ratio 

Credit utilisation ratio represents the amount of credit that you have used in comparison to the amount of credit available to you. A very high credit utilisation ratio means that you are heavily reliant on credit to meet your financial obligations. This can cause a dip in your credit score. So, when you close a credit card, it’s highly likely that your credit utilisation ratio will go up as the overall credit available to you decreases. 

  • Reduced Credit Limit 

When you cancel your credit card, your overall credit limit will come down. This can be a cause for concern for two main reasons. Firstly, it can drive up your credit utilisation ratio, which can have a negative impact on your credit score. And, secondly, it gives you limited access to inexpensive credit. So, if you are someone that is reliant on credit to manage your finances, a reduced credit limit can prove to be a hassle. 

  • Reduced Credit History 

When you close a credit card, you are also effectively erasing all history related to this card. So, if you have diligently paid off dues on this credit card, this history will be lost. Because there is now lesser information available to credit bureaus regarding your financial behaviour, they may knock a few points off your credit score.

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FAQs on How to Cancel a Credit Card

Is it better to cancel unused credit cards?

Cancelling an unused credit card may be a good idea, particularly if it comes with a high annual fee. At the same time, you might want to hold off on unused credit cards if you are looking to improve or maintain your credit score. Closing unused credit cards can cause your credit score to fall. 

Do I need to submit my credit card to the card issuer once it is cancelled?

It depends on your credit card provider’s policies. Some issuers may require you to hand the card over to them. Alternatively, you can also cut your credit card diagonally and dispose of it, if your credit card issuer permits it. 

When I cancel a credit card, will my add-on card also be cancelled?

In most cases, when you cancel your credit card, all add-on cards are automatically cancelled.

How to close a credit card account permanently?

You can cancel your credit card by raising a credit card cancellation request on the card issuer website or by getting in touch with the credit card issuer’s customer service team.

Does cancelling a credit card affect your credit score?

Cancelling a credit card may or may not have an impact on your credit score. Ensure that you check your updated credit report to understand the impact.

What happens if I cancel a credit card with an outstanding balance?

It's best to clear all due when closing your credit card. But if there is an outstanding balance on your card, you will have to continue paying monthly interest on the pending amount. This will also have a detrimental effect on your credit score.

Can I cancel a pending transaction on a credit card?

Pending transactions cannot be cancelled on the credit card until the bank or the card issuing authority has finalised them. You can try reaching out to the merchant to cancel the transaction as well. If you don't recognize the transaction, you can file a complaint. The bank can then freeze your card and guide you through the next steps to cancel your card.

When Will My Credit Card Account be Considered as closed?

A written confirmation will be sent by the issuing bank that the card has been closed permanently. 

How to close a credit card without hurting your credit score?

Clear any outstanding balance on your credit card account before cancelling your credit card to avoid any being reported to credit bureaus. While it may not be possible to accurately predict the impact of credit card cancellation on your credit score, it’s best that you get in touch with your credit card provider. They should be able to help you get a clearer idea of how closing a credit card can impact your credit score. 

Is it ever a good idea to cancel a credit card?

Yes, it absolutely can be! If your credit card comes with high annual fees or

makes it difficult for you to manage your spending, then it may be time to bid goodbye to your credit card. 

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