How to Cancel a Credit Card 

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.

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.

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.

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. 

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

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.